Fed, Bernanke Lead Equities Higher, Commodities Mixed

Equities were waiting on the Fed’s announcement. Commodities were waiting for the USDA monthly reports. When each was received, the markets reacted sharply. The Dow rallied to multi-year highs to settle at 13,539.86 Thursday. A sharply weaker dollar index, Middle East political turmoil, and the Dow’s rally have pushed oil higher by $0.91 a barrel to finish trade at $99.07. Gold benefited greatly from the Fed’s new monetary policies, gaining $27.80 an ounce to settle at $1,767.70. The commodities are mixed this week after the monthly USDA reports.

Corn has fallen below a couple of support levels this week losing 24 cents to finish trade today at $7.74. The USDA lowered its yield forecast by 0.6 bushels per acre, which was a much smaller revision lower than most analysts were expecting. To go along with the yield revision, the USDA left harvested acres unchanged and actually increased ending stocks for both ‘11/’12 and ‘12/’13. The result was a selloff after the reports were released. Ethanol production remains on target to meet expectations, while export sales continue to be rather slow. Export sales were reported as 214,800 MT for ‘12/’13 delivery.

Soybeans benefited from the USDA reports and the results of the Fed’s monthly meeting. The oilseed is up 14 ½ cents on the week after rallying about 45 cents Wednesday. The November contract closed at $17.47 ½ today. The yield forecast was revised lower than anticipated, but left harvested acreage unchanged. Little demand rationing is evident with export sales strong again this week at 628,200 MT. Again, soybeans will be a focus of traders tomorrow as the monthly National Oilseed Processors Association crush report will be released.

Wheat is down just 3 cents this week to finish Thursday at $9.02 ¼ on the December CBOT contract. U.S. produced wheat continues to be overprice on the world market as we have lost several Egyptian tenders to the Ukraine, Russia, and France. Recently, Australian and European private analysts have reduced their expected crop sizes so the trend of overpriced American wheat may be reversed later in the marketing year. A weakening dollar index will be beneficial too. Export sales were reported as 381,800 MT this week.

A heavily anticipated Fed announcement was made this week in conjunction with a very important USDA update. After the dust settled, equities were left near multi-year highs, while the agricultural commodities were mixed. Yield results are coming in from a record harvest pace and should keep the market guessing on the final yield results for the next couple of months. As we finish our crop season, South American planting and weather will become of greater importance

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