Headlines:
- South America corn surge drives Monsanto back into profit
Monsanto enhanced the prospects for its swansong as an independent company, nudging higher its forecast for full-year earnings, after a boost from soaring South American demand for its corn seed. The seeds giant, which has agreed a $66bn takeover by German chemicals conglomerate Bayer, raised to $3.97-4.45 per share, from $3.83-4.35 per share, its forecast for earnings for the year to August.
Summary:
Both Corn and Wheat are trading at levels last seen in the middle of last month. For some credit is being attributed to fund rebalancing and fund short covering for the new trading year. Anticipated continued strength in the US Dollar has also sparked some inflation fears which has in turn lead to some commodity buying as an inflation hedge. In our newsletter mid-December we discussed the prospect of potential strength Wheat because of fund rebalancing and it looks like speculators are make a play to load up ahead of fund buying.
Additionally, concern over winterkill continues to make round which in turn has led to support of Wheat futures prices. March Wheat gained another 6.50 cents on the day finishing near the top end of the trading range. Soybean futures posted a major advance yesterday after news of flooding in Argentina. Now that the markets have had a day to digest the news and evaluation just how much damage is probable the strength of the advance has subsided. Beans were down 7.75 cents intraday but finished the with just a 3 cent loss when the dust settled. There is still rain in the forecast for Argentina for the next few days but drier weather is in the forecast for the latter part of next week. We could very well be in for some volatile back and forth movement in Beans. It does bare noting that the USDA report is schedule for next week on the 12th. Corn is testing the December 13 highs and has been on strong trajectory up after being in an oversold position in late December. It is making its way up to being overbought on the daily charts but it is not quite there yet. If its momentum is able to persist look for it to potentially rise going into the early or middle part of next week. March Corn rose 1.50 cents today.
