Mad Cow Doesn’t Just Affect Beef — Consider This…
SOYBEAN COMPLEX
Overnight Trading Suspended Until 01/01/2004
Because of the initial washout Wednesday it appeared as if commercial buyers
were drawn into the fray on the long side and that confirms that the mad cow
issue is a potential positive to prices in the long run. Certainly the COT
report positioning, leaves the market vulnerable to liquidation by the spec
crowd but after the deep thrust Wednesday morning, the risk of stop loss selling
is reduced. However, a return to levels below 756 in the March contract, might
kick up some concern and shift the tide back into the bear camp.
CORN
Overnight Trading Suspended Until 01/01/2004
One can hardly argue against more weakness, as thin year end conditions come
with the market technically overbought (at least prior to the last week’s
washout). However, one should realize that the state of flux in the feed
industry could end up in a fashion that few expect. Certainly the corn market is
confronted with a potential major negative, but as time progresses we would
expect the market to regain some rationality.
WHEAT COMPLEX
Overnight Trading Suspended Until 01/01/2004
One can hardly argue against more downside, as the
wheat market seemed to be garnering selling interest off issues prior to the mad
cow debacle. In fact, unless the Chinese show up as buyers, we can hardly argue
against a continuation of the downside and a possible near term trading range of
353 to 369 basis the March contract. Even the technicals don’t seem to
discourage additional liquidation unless of course the soybean market provides
an amazing amount of spillover support! Under a full liquidation it would not be
a shock to see prices slide down to the October consolidation lows!
CATTLE
12/26/03 The CME has expanded limits to 300
points today. The market is in a position to fall further over the near-term as
the longs in the market are caught and it will take much more time for the
market to assess the impact of the mad cow case on demand and “if” there are
more new cases to be announced soon. The confirmation from testing in Britain
only adds further pressure to the market this morning.
HOGS
The market came under heavy selling pressure on
the limit-down trade in cattle and concerns that red meat demand will suffer
after the mad cow announcement. When mad cow surfaced in Europe and in Asia,
demand for pork, poultry and fish increased with the outbreak as consumers (in
the case of Japan and Canada recently) shifted demand to other meats. However,
immediate pressure from declining beef prices could pressure pork as well.
COTTON
12/26/O3 Market closed for holiday. . .
COFFEE
12/26/O3 Market closed for holiday. CSCE stocks
at the exchange were down 9,978 bags to 4.365 million with 12,442 bags pending
review. .
COCOA
12/26/03 Market closed for holiday. CSCE cocoa
warehouse stocks increased by 6,934 bags and now stand at 1.187 million bags. .
SUGAR
12/26/03 Market closed for holiday. . .