France votes out Sarkozy and votes in socialist Francois Holland as President.
Greek voters elected the anti-bailout, anti-austerity parties.
Very concerning was that in Germany, Merkel’s ruling coalition had a setback in state elections- in the N. state of Schleswig-Holstein her coalition party had lost the majority vote in preliminary results.
S&P futures plunged 20 lower before recovering to only 7.50 lower, the Euro fell 131 points before coming back to 51 lower, crude fell $3.13 before coming back this morning to down .70.
All dairy products feel hard last week. Volume and open interest surged on down days and on the week. The commitment of traders report further strengthened the signs of a mounting short position in dairy products as a whole. A bounce back is certainly a possibilities but the technical and fundamentals are both pointing lower at the moment, thus we’d sell any big bounces upward rather than getting our rally monkey’s out and excited.
Powder appears headed to test a buck, butter looks to challenge a $1.30 and we think it will see $1.25 before not too long. With all the strong milk production domestic and globally why would we not see cheese at $1.25-$1.35 this or next month? will not NFDM make its way into cheese vats? We suspect it would take a serious heat wave to give this bear some horns earlier than late this year or early next year.
Old crop corn lost a few cents last week but held mostly steady on looming concerns over China purchases, while it is down slightly this morning we don’t see lot of weakness coming into old crop corn soon.
New crop corn on the other hand fell just over 14 cents last week in Dec and is down another 7 here this morning; the Dec chart has broken some key support levels and looks to soften further – end users of corn should be buying calls on the way down so later weather concerns don’t come to bite them.
We look for all dairy products to open soft and for grains to open lower on outside market pressures as the USD reigns King for a day and risk comes out of the markets temporarily.