The fundamental backdrop is a slight negative for the complex, but geopolitical risks (Iran) and recent boost in risk appetites offer support.
Interest Rates: Seems To Discount Credit Rating Downgrades
Even results from a Spanish debt auction overnight appear to have provided some fresh optimism.
Stocks: Equity Markets Sharply Higher During the Overnight Hours
However, the index has made the upside charge with severely overbought momentum indicators, and that leaves them susceptible to a downside correction.
Currencies: Good China Data Pressures Dollar
The Dollar is likely to remain under pressure thorough the rest of today’s trading and would need another risk flare-up to see any substantial recovery from current levels.
Wheat: Lower Prices May be Necessary to Attract Demand.
The technical action turned very weak with yesterday’s collapse and the build-up in open interest in the last few weeks suggest that the trade could stay volatile.
Soybeans: South American Rain in 6-10Day Key.
This rain window will be important and could mean the difference between continued weak demand for US soybeans or a jump in demand as buyers shift away from South America if production concerns pick-up.
Corn: Will Take Positive Weather to Avoid More Selling Pressure
With the large spec net long going into the report and perceptions that US producers have not sold a lot of old or new crop corn, selling pressures could resume “if” the January 21st to 26th rain event in Argentina looks fruitful.
Special Report: Corn Volatility Alert!
Wide ranges of estimates for ending stocks and production and continued weather uncertainties leaves the market in a potentially volatile setup into and beyond the Thursday, January 12th report window.
Sugar: Without Outside Help Market Looks Vulnerable
Without help from outside market forces, the sugar market looks vulnerable to a resumption of the downtrend but the buying may continue for at least the rest of the week.
Interest Rates: Due for a Pullback?
by Dave Hightower on January 21, 2012
The market’s inability to rally to new highs after the latest European debt downgrade and recent promises of more easy monetary policy from the US Fed suggests that prices are a bit rich.