[R]12:30PM NY – Market averages turn negative at mid-day trading.[/R]

Market averages fell by mid-day trading after rising as much as 0.5% in the morning trading. Tech, financials and energy stocks reversed the earlier course and traded in the negative territory.

U.S. construction spending rose in February 0.3% followed by a drop of 0.5% in January according to Commerce Department. Private construction was up 0.2%, residential construction was down 1% and non-residential construction was up 2.3% from January.

The U.S. dollar came under pressure as the Commerce Department decided to levy additional duties on Chinese made goods to ‘compensate for Chinese subsidies.’ The dollar fell 0.5% against yen to 117.30 and 0.3% against euro to 1.33.

The Commerce Department decided to add the additional duty on the preliminary determination which they allege that Chinese producers and exporters of coated free sheet paper received countervailable subsidies ranging from 10.90 to 20.35 percent. The press release from the department added that “from 2005 to 2006, imports of coated free sheet paper products from China increased approximately by 177 percent in volume, and were valued at an estimated at $224 million in 2006.”


[R]11:00 NY – The U.S. government report forecasts record corn crop planting since World War II.[/R]

Across the U.S. farmers are planting corn in record numbers, according to Prospective Planting report released by the Department of Agriculture. The report forecasts that 90.5 million acres will be planted in the current year, up from 78.3 million in 2006. The last record corn season was in the year 1944 when 95.5 million acres were planted. The report also stated that soybean crops are expected to fall 11% to 67.14 million acres.

Corn prices in the year 2006 jumped 74% and are expected to remain at elevated level. Ahead of the release of the report the corn prices were trading higher in Chicago trading. Soybean prices jumped.

The Prospective Planting report is based on survey of 86,000 farmers conducted during the first two weeks of March. Farmers in the U.S. harvested 10.535 billion bushel of corn last year, third largest crop ever and soybean production rose 4.1% to 3.2 billion bushels. If farmers do plant the estimated acres and normal weather pattern remains for the year than crop is likely to exceed 12.3 billion bushel, up 4.8% from a year ago according the report. About 20% of the corn production is likely to be used for ethanol production.

Ethanol has been a mixed blessing for farmers. While demand from ethanol acts as a big boosts for the corn demand but it also raises prices of land and production costs for farmers. Approximately 5 billion gallons of ethanol is expected to be produced by 120 plants in the U.S. generating 3% of gasoline demand in the country. Crude oil consumption is likely to rise 1.8% in the U.S. despite record oil prices.

[R]10:15AM NY – After 30 minutes of trading New York maintains a positive bias. Oil climbs above $66 per barrel and USDA report showed that farmers plan to plant largest amount of corn production since the second World War.[/R]

Market averages made a steady climb in the first thirty minutes of trading in New York. Personal spending and income report for the month of February showed a rise of 0.6% in both but savings rate declined at 1.2% in the month.

Volatile oil price in the first hour of trading rose 55 cents to $66.57 per barrel as tensions between Iran and Britain continued in the Middle East. British government said that it will escalate the issue if sailors are not released and Iran wants a guarantee that Britain will not cross its borders again.

In trading tech stocks traded higher, slightly. Apple, Microsoft, IBM, Cisco and EMC had less than 0.4% gains. Dell dropped 2% on the news that the company has discovered evidence of accounting misconduct and errors and will delay annual report and 10K report filing. Red Hat said that it expects to earn between 67 cents and 72 cents in the current fiscal year, stock fell 1% after advancing at the opening.

Oil complex stocks rallied in the wake of higher price of oil. Valero, Exxon and Tesoro advanced better than 1%. Conoco Phillips and Marathon Oil declined a fraction.

Brokerage companies Goldman Sachs, Morgan Stanley, Merrill Lynch and Lehman Bros gained close to 1% after thirty minutes of trading.

Nymex (NMX: chart) rose 79 cents to $136.46 on an upgrade from UBS on increased volatility in the oil trading.

[R]9:45AM NY – Personal spending and income rose in February, market averages struggle at the opening.[/R]

The Commerce Department reported that personal spending in February rose 0.6% and so did personal income in the month. Economists were looking for a rise of less than 0.4%. After adjusting for price inflation in gasoline and other food products the personal spending rose only 0.2% in February after gaining 0.3% in January. In January, personal income rose at 1% and personal spending rose at 0.5%.