Being powerful is like being a lady.
If you have to tell people you are, you aren't.

- Margaret Thatcher

 There is a phenomenon in grains that we have closely monitored over the last 20 years, courtesy of Bob Leegan.  If the February lows are higher than the January lows,  there is a high statistical probability that a bull market will ensue into July.  There are six trading days to go for the month of February, so we will give this the attention that it rightly deserves.

Couple this with the 23 year drought cycle which began last year that we have spoken of in previous letters, there is a chance for some real fireworks in 2012.  As Mark Twain once said, "History does not necessarily repeat itself, but it sure does rhyme".  It is not carved in stone that these things will occur, but it certainly bears watching.

 
Europe approved the Greek bailout package Monday as RJO Market Research and Trading reports, Eurozone finance ministers at their meeting on Monday approved the 130 billion euro bailout package for Greece as well as the Greek voluntary bond swap program. The euro jumped about 1 cent when Reuters first reported the deal. The question now becomes whether there are any additional conditions or measures that the Greek parliament must pass in order to meet the terms of the agreement. Eurozone finance ministers were under a huge amount of pressure to get a deal done Monday and there may be some loose ends that still need to be addressed. There is also the question about the extent of bond holder participation in the voluntary Greek bond swap. If participation is not high enough, then Greece will not be able to meet the latest debt target of 121% of GDP by 2020. There is also the issue of whether the new government that is elected in April will stick with the promised austerity measures. Despite all the potential sticking points, Monday's bailout approval was nevertheless another big step towards containing the European debt crisis.
 

Although the US Dollar was lower today, it didn't put in all that bad of a performance, considering all the "great" news out of Greece.  Spain, Portugal, and other countries are no doubt licking their chops, as they will expect the same kind of deal.  The European markets told us today that they aren't really buying the great news, as it is obvious  that this crisis is far from over.

US Dollar Daily Chart    

Beneficial rains in South America over the weekend led to some fund liquidation today.  Corn continues to stay in a chart pattern called "a flat bottomed descending triangle", which is normally considered price negative.  Keep your eye on the US$....if it gets above 80.00, then corn will likely be testing the 6.00-6.10 area in the near future.

  May Corn Daily Chart

Beans are in a tug of war, with good Chinese demand on one end of the rope, and beneficial rains in South American on the other end.  Spreading (buying beans / selling corn and wheat) continues to be the main theme.  The 1290 - 1300 area is still in play.  Watch for a hedge alert if it appears beans are getting close to that objective.

 

May Bean Daily Chart

Wheat

 July KC Wheat Daily Chart

  April Live Cattle Daily Chart

August Feeder Cattle Daily Chart

The 1715 area that we referenced continues to hold for gold, and that in addition to Iranian tensions, helped to perpetuate today's advance.  If we can stay above it on a weekly closing basis, the next objective will be the mid-1800 area.

Gold Daily Chart

 

Crude oil will no doubt see some volatile price swings this week, on news that Iran has halted oil shipments to the UK and France.  The UK gets only 1% of their oil from Iran, and France gets 3%, so this isn't likely to turn into much of a supply problem.  The real worry down the road will be supply cuts to Greece, Spain, and Italy who all get about 1/3 of their total oil from Iran.  All that aside, crude oil has technically broken out, and the longer we stay above 103.50, the greater the likelihood we will see 114 as our next target objective.  Exports remain good for unleaded gasoline, so it should come as no surprise that it made life of contract highs today. 

    April Crude Oil Daily Chart

01-30-12

» Hedge Recommendations

Corn: 2011 production 1-24-12 Sold 20% @ 634 March. 1-11-12 sold 20 % at 653 March. 8-24-11 sold 20% at 7.42 December.  3-30-11 sold 20% at 608 March 1012  ---------------------------------------------------------------------------------------------   Soybeans: 2011 production 1-24-12  Sold 20% @ 1225 March. 1-11-12 Sold 20% at 1207 March. 3-19-11 Sold 20% of 2011 beans at 1350 on the November 2011 contract. 10-14-11 Sold 20% of 2011 production at 1281 on the Jan. 2012 contract.   ------------------------------------------------------------------------------------------------      HRS Wheat:   2011 production 2- 1-12 Sold 20% of 2011 crop on the May contract at 828 1-11-12 Sold 20% on the board at 816 March with basis not locked. 8-24-11 sold 20% at 931 December. 3-29-11 Sold 20% at 910 on the Dec 2011 HRS contract.  For winter wheat producers sold the Sept KC wheat at 883. ------------------------------------------------------------------------------   Cattle      For January, March, April, and May Feeder Cattle...Covered 100% of production buying puts and selling calls. Covered the calls in the December break near $1.00 for most.   NOTE: With the exception of livestock, all trades will be entered in the electronic markets unless otherwise noted. Hedge recommendations and Trade recommendations are totally separate, and may sometimes conflict with one another. It is strongly suggested that Spec trades and Hedge trades be done in separate accounts.   Heartland Advantage Ask about our State-of-the-art order entry software with LIVE quotes and charts! Free to all active clients of Heartland Investor Capital Management, Inc. A word to the Wise                             Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable to Heartland Investor Capital Management , Inc. but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK of LOSS involved in trading futures and / or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL . NO LIABILITY  on the part of the author exists for any trading loss you may incur in the use of this information. The information contained in this newsletter is privileged, confidential and protected from disclosure. Any further disclosure or use, distribution, dissemination or copying of this message or any attachment is strictly prohibited. Newsletter provided by Heartland Investor Capital Management, Inc. a registered CTA with the NFA, of which Eugene Graner is principal. This entity is a separate legal entity from the Introducing Broker Heartland Investor Services.

www.heartlandinvest.com |

Copyright © 2012 Heartland Investor Capital Management All rights reserved