Market Matters Blog

Tuesday was a day of news at all levels of the marketplace: the Dow Jones closed at a new record high; Cargill, CHS and ConAgra foods announced they're combining their flour milling business into a new company; and CME Group announced their revised grain trading hours.

While the Dow Jones Industrial Average's new all-time high close is impressive, DTN Senior Analyst Darin Newsom said he's more interested in seeing where the stock market goes from here, how it closes the week and whether it can maintain its strength. The attitude on Wall Street seemed to be more ho-hum than when the Dow last hit a record in 2007 -- and there seemed to be more questions surrounding this high than others. There's a lot of uncertainty in the general economy (sequester cuts, Europe concerns) and after years of easy monetary policy, there's a lot of liquidity buoying the stock market today.

But if this stock market rally holds on, it could eventually start to draw noncommercial interest away from commodity markets, Newsom said. But that too, depends on the comparative returns of stocks and commodities, he said. An analysis from WSJ, explaining how Dow highs typically spur more buying, can be found here: http://online.wsj.com/…

It's the biggest merger in the flour milling industry in years. The combination of Cargill, CHS and ConAgra Foods will be named Ardent Mills and it's expected to become the industry's biggest player, according to Dow Jones Newswires. The new company will have 44 four mills, three bakery mix facilities and a specialty bakery with combined sales of more than $4 billion.

ConAgra owns mills in seven states where Cargill lacks a presence and the group touts CHS and Cargill's origination and supply chain efficiencies. I'll spare you copious quotes from the press release, and will just share the quote from Mark Palmquist, CHS's executive vice president and chief operating officer or Ag Business. "As part of Ardent Mills, CHS farmer-owners will have more opportunity to further connect the wheat they produce to the consumer marketplace."

It will be interesting to see how this news eventually plays out in the marketplace, especially now that ADM Milling's top competitors joined forces.

If you'd like to read the whole press release, here it is. http://chsinc.mediaroom.com/…

And CME finally announced its revised grain trading schedule, expected to take effect on April 8. New trading hours on the Globex electronic trading platform will be Sunday to Friday, 7 p.m. to 7:45 a.m., and Monday to Friday 8:30 a.m. to 1:15 p.m.

That shorts the overnight trading hours and adds a 45 minute break in the morning. What do you think about the new hours?