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USD’s strength causes problems in commodities – May 16, 2012 - INTL FCStone Blog
International Assets Holding Corporation > INTL FCStone Blog > Posts > USD’s strength causes problems in commodities – May 16, 2012
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USD’s strength causes problems in commodities – May 16, 20125/16/2012 8:20 AM

SOYBEANS: LOWER
The USD’s strength is causing problems in commodities. Crude is diving down, headed for $90? The USD index is above 81. December 2011 is the only spot higher in almost the last two years and that was only 0.300 ticks higher than where we have been today. More panic or prudent movement from the Euro to the USD can easily get us there. Greece is on the cusp of leaving and/or defaulting. Brazilian prices continue to encourage sales there and additional bean acreage next year. Spreads are attempting to make it to a carry market in early new crop spots. Old crop is taking a little off the top on the inverse, but with lower prices and additional Chinese business, that is likely an anomaly. Basis should continue to firm with exports and likely increases in hog and chicken production. Finally, we have returned to our daily dose of Chinese business, only it is corn this time. Beans may get a sympathetic rally from corn. OI: B/+4,602; M/+3,189; O/+6,346. OC: B/-10 to -13; M/-3.5 to -4.0; O/-0.75 to -0.90.

Overnight trade settled 16 lower in SN12.

Kyle Smith, Mike O'Dea, Ben Parks, Collin Hulse, Ingrid Gronlund