Waiting for Thursday’s GDP

Some bullish news in stocks today, some bearish.. On the bullish side, IBM decided to buy back its shares at 2 times the rate it had planned..Seems they think the market is on sale here… On a bearish note, consumer confidence, measured by a private firm, fell to 47.7 down from and expected 53.1 percent, showing that the US consumer isn’t too enamored with what the future may hold currently.

Also bearish was US steel’s third quarter of losses reported today… Its stock fell a quick 6 percent on that news…Its comforting to know that McDonald’s is doing well selling burgers to the world, but something substantial like steel, Well…. not so much….

Thursday’s GDP had best hit the predicted mark at 3.2 percent, or there could be some more weeping and gnashing of teeth as we head into the “holiday season”…US Retailers had best get ready to discount more products in an ever steepening race to the bottom of pricing margins, which have already been cut razor thin…

As far as the grain trade goes, we are seeing some consolidation after yesterday’s fund puke fest, which saw a lot of long liquidation in the Corn and Wheat and Beans..

They seem to have discounted the fundamentals in the market, where we have harvest at 20 percent vs 58 percent last year at this time, and 44 percent in the beans vs. 80 percent at this time last year… It remains to be seen how all this cold damp weather will affect yields or moisture content and quality of the crop coming in…

If we get any hiccups at all, or if there are any issues with South America’s growing season, it seems that fundamentally, at some point we will have to break away from the link to the crude and the dollar and just start trading on fundamentals of supply and demand.

For now, however, grain traders keep your eyes glued to the crude and the dollar…In effect, you are trading crude and currency via the surrogate of the grain market… Pull up side by side charts and you will see the correlation…

Technically we have support here in Nov Beans around 984, and resistance way up at Sunday night’s high at 1019… There is no reason not to expect that we could explore this 30 to 40 cent trading range some more, as things shake out in the dollar, as well as the continued harvest…

Good Trading

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