Analysts Warn Of Possible Money Flow Into Commodities

There is no sign of it yet, but some market analysts continue to warn that funds coming out of equities could migrate into cheaper commodities.  If it does, sharp rallies could ensue as the money flow gives futures markets lives of their own.\r\n   Such warnings have been heard since the stock market began to retreat last month, and warnings from the likes of Dennis Gartman on CNBC’s Fast Money that the stock market is in for “an ugly correction” reignite talk that money could swing into commodities.\r\n   Gartman said the stock market is not in a bear market yet since it hasn’t broken long-term trend lines.  But disappointing U.S. economic data and unrest in emerging market currencies along with Europe’s sluggish economy give him pause.  He recommended staying on the sidelines.\r\n   Meanwhile, UBS’ Art Cashin told CNBC on Friday that the stock market may be nearing the end of the current bull market.  \r\n   “Bull markets tend to have a maximum life of five years. We\’re getting awfully close to that,\” Cashin said.\r\n   But until investors swirl into grain, soybean and livestock markets, trading in Chicago may be dominated by the latest weather reports for the Plains and Midwest.  A major winter storm has begun and is aimed at a swath from Colorado and Oklahoma clear into Maine.\r\n   Heavy snow and arctic temperatures are associated with the storm, which threatens to snarl traffic and grain movement again, although the snow will help protect the Hard Red Winter wheat crop.  Ethanol and crush facilities could run low on corn and soybeans, and export markets could boost basis levels to gain supplies.\r\n   This link to the National Weather Service’s county-by-county forecast map shows the predicted path of the storm.\r\n   The Plains and Midwest are squarely in the line of fire for snow and frigid temperatures.  Forecasters call for another chance of snow this weekend, but by then the major issue will be the cold, which is expected to reach zero or below.\r\n   A late-month warming trend is expected, but for now, the nation’s breadbasket is hunkering down.\r\n   South American weather remains ideal for harvesting in eastern Brazil, although the continued dryness is stressing late-planted crops.  New-crop soybeans already are leaving the ports, and many traders expect the world to migrate to Brazil and then Argentina for soybeans soon.\r\n   No appreciable cash cattle trading was reported in the Plains Monday as beef values slide precipitously.  The USDA reported its choice beef cutout value Monday at $220.09 per cwt, down $3.40, while the select cutout fell $5.43 to $219.42.\r\n   The choice/select spread narrowed Monday to $0.67, and there were only 93 loads of fabricated product sold into the spot market.\r\n   The USDA’s live-basis 5-area weighted steer price last week was $145.80, down $2.45 from the previous week, although it still was $20.84 higher than a year earlier.\r\n   “(Cattle) futures traders are looking at comparisons of cash to futures and historical tendencies,” said Allendale’s Paul Georgy in his Morning Wake Up Call. “Normally at this time of year the April futures are $5.00 premium to cash, currently the futures are $5.00 under cash.  This allows room for further cash adjustments while futures could find support.”\r\n   The CME Feeder Cattle Index for the seven days ended Friday was $171.04, down $0.08, while March futures settled Monday at $168.00 per cwt, down $1.42.\r\n