Coming back from the weekend I see a higher start to the week with momentum from the Euro and crude helping more than internal sentiment. The biggest factor here is the Greek austerity vote passing. Glad to see a vote without the agreement of a rioting populace helps European outlooks. This is a joke and should be considered one but it is not so markets will likely move higher. This is sentiment more than reality.
The agricultural markets are followers to start the week lacking any news with many waiting for next week’s USDA outlook conference in Washington DC. This meeting will offer the first “official” numbers farmers can use for planting intentions and pricing models for the 12/13 crop year. Traders do get the USDA budget today which will show expected cuts across the board but this is a minor issue in the big picture. The fact is, there is little to direct the market this week so expect a choppy directionless chop with wild swings for no particular reason. This will hurt front end volatility but I stand by my statement that volatility is too cheap in May and deferred contracts. The spring is winding and when it snaps back it will be a vicious move.
Overall today will likely be a higher session lacking any real fundamental or technical reason to do so. I like the bullish side in the long run but do not feel things have a catalyst to blow it up this week. Markets may have it next week with the USDA outlook but that is still some time away.
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