Headlines:
- Weekly export sales will be released tomorrow morning pre-market open
- Initial jobless claims will be released tomorrow morning pre-market open
- June Crude Oil futures volume will roll to the July contract at the end of this week
- Grain trader Andersons rebuffs hostile $1bn bid
US-based agribusiness the Andersons rebuffed a $1bn takeover bid from investment vehicle HC2 Holdings, saying the approach was “not credible” and “significantly” undervalued the group. HC2 was established by New York financier Philip Falcone, who shot to prominence by founding US hedge fund Harbinger Capital in 2001. The takeover bid valued the Andersons at the equivalent of $37 per share, representing a 43% premium to the share price as it closed on Tuesday afternoon. The Andersons is an Ohio-based independent agribusiness company that focuses on the trading of grains, oilseeds and the production of ethanol. The Andersons Chairman Mike Anderson said on Wednesday that the proposed takeover price “ignores our value and prospects as a standalone entity and represent an opportunistic attempt to acquire the company at a low point in the cycle”.
Summary:
The Federal Library and Information Network (FEDLINK) released the April FOMC meeting minutes today and economists are mulling over the possibility of a Fed funds rate increase in the range of 0.25% to 0.5% as was mentioned in the April meeting of occurring no earlier than the June meeting. The minutes reiterated that previous sentiment was both appropriate and “consistent with setting policy in a data-dependent manner and as leaving open the possibility of an increase in the federal funds rate at the June FOMC meeting”. The equity markets have been sideways to down the past two weeks and did not react much to the release minutes today. The US Dollar stronger since consensus is starting to mount that an increase could occur in June or July. The US Dollar is now back up to levels last seen in March of this year. Crude Oil fell today in conjunction with the greenback strength.
Beans closed lower 5 of the last six trading days. The July contract dropped 6.50 cents and the November contract shaved off 11.50 cents. After the big limit up move Tuesday of last week Beans has yet to regain the momentum that helped it surge after the USDA report. Clearly the catalyst continues to be fund managers driving prices and today the name of the game appears to have been profit taking.
Corn futures were flat today. July Corn rose ¾ of a cent and December Corn rose ¼ of a cent. Given recent supply shortages in South America and even in the Black Sea region, France is on tap to send out it largest export shipment in 16 years. Futures prices did not respond to the news but near the 400 to 420 levels we anticipate some key resistance for Corn futures.
July futures made a high of 484.50 today which was right inside of our 482 to 487 resistance area. It dropped 3.25 cents on reasonable volume. The overhead price level of 490 has been significant resistance for Wheat and it will be how price reacts to this level that can yield some great insight as to where follow through may occur near-term.
