Investment firm recommendation cited in commodity sell off

Market Line April 13, 2011 There were big losses in wheat futures Tuesday. Japan’s nuclear plant situation was called a factor but so was a Goldman Sachs recommendation to take profits in commodities, particularly oil. Dustin Johnson of Ehedger at the CME says this may not be over yet.

Johnson: “Certainly could see this weakness continue. The funds are still very loaded up on the longs in the grains. What does that mean? It means there could be a lot of air under the market. So as we see some of these bigger traders exit their positions you could see corn, soybeans and wheat take more setbacks than they already have.”

At mid-day Tuesday nearby corn futures actually topped nearby wheat at Chicago, the first time since 1996.

On Tuesday Chicago May wheat down 38 ¾ cents at 7-59 ½. July new crop down 39 ½ at 7-92 ¼. May corn down 23 ½ cents at 7-52 ½. Portland soft white wheat down 20 cents at mostly 7-95. Club wheat premium at Portland mostly 25 cents. New crop August white wheat steady to a dime lower at 7-90 to $8.00. Hard red winter 11.5 percent protein down 25 cents at 9-28. DNS 14% protein lower by 19 to 24 cents at mostly 11-86.

Cattle futures were down hard too in the general sell off. Even sharply lower corn did not help feeders. June live cattle down 130 at 115-60. May feeders down 262 at 132-25. May Class III milk down 16 cents at 17-09.

I’m Bob Hoff and that’s Market Line on Northwest Aginfo Net.

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