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Author: DCWD40 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 7  
Subject: Interest building... Date: 5/31/2007 10:47 AM
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...but not on this board. LOL

Yesterday's big move in beans, wheat and corn shows just how fast these markets can move.

Look at wheat:

The threat to production in Ukraine, a major exporter from the Black Sea region, comes as global stocks are already tight, an analyst noted. The International Grains Council last week said world wheat ending stock projections for 2007-08 are the lowest since 1981.

There are also continued worries about wetness in the U.S. Plains, the
analyst said. The precipitation is delaying harvest in some areas, including southern Oklahoma, he adds.


http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=latestnews&pv_noticia=i4771666583943577664

We are looking at 26 year lows. Any bad weather (and there will be some) is going to continue the slide in inventories. And, don't forget the Russians are holding back:

Due to an ongoing drought, Ukraine's government said Wednesday it planned to suspend new-crop grain exports until state reserves were formed.

Corn looked like it was in trouble (and not headed above $4 like I and most others expected):

...volatility which saw corn futures drop below their 20-day moving average on Tuesday, only to rise above their 50-day moving average on Wednesday.

I would bet that most investor have no idea that corn prices move that much with two trading days. I would bet that a very low percentage know that corn was $12 over 30 years ago.

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=latestnews&pv_noticia=i4771668035644096576

The bean market is tight and importing countries are changing how they do business:

In other news, India has retained the base import prices of palm oils and crude soyoil unchanged at existing levels, a government statement said Thursday. In India, import duties on palm oils and crude soyoils are calculated at a fixed price regardless of the price at which they are imported. Until August last year, these prices were changed every two weeks in line with international prices but the practice was stopped to keep a check on local prices.

Near-term weather conditions for Midwest crops are favorable, but with speculative traders heavily long, bullish longer range outlooks are trumping current conditions amid outlooks for a long term draw down of soybean stocks, a CBOT floor analyst said.


Sugar is the only weak part of this ETF. The positive is:

Mexico produced 5.058 million tons of semi-refined sugar through May 26, down 1.9% on the year, from the harvest ending in July

Still, Brazil is the key and prices are soft for now:

Meanwhile, crystal sugar at Sao Paulo state mill gates was quoted at
26.63 reals per 50-kilogram bag Tuesday versus 27.27 reals a week earlier. Brazil's northeast cane harvest starts in September.


http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=latestnews&pv_noticia=i4771423969899053120

Still, ethanol is the reason sugar prices are firm and that news continues to support sugar at current or higher prices:

As Brazil's center-south cane harvest accelerates, officials will consider raising ethanol's mix in gasoline to 25% soon from 23%, an agriculture official said.

This ETF has a powerful combination of future contracts.

W.D.
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