by Duane Lowry
Wednesday, May 23, 2012
SUNRISE OUTLOOK OVERVIEW:
*At 5:13 am> Grain/Soy Snapshots: Corn= 1 1/4 higher July, 1 1/4 lower Dec, Wheat= 14 3/4 lower, Soybeans= 18 1/4 lower Nov.
Day Session Expectations vs Night Session Tone:
Dec Corn: Support= $5.17-22, Resistance= $5.35
*Expect buying interest to develop at current levels and limited additional downside energy.
Nov Soybeans: Support= $12.60-65, Resistance= $13.10
*I don't expect any material expansion of the overnight weakness to develop today and it wouldn't surprise me to see us eclipse the overnight losses before the end of the week.
July Wheat: Support= $6.65-75, Resistance= $7.10-20
*Expect stabilization to develop today.
Outside Market Influences:
At 5:12 am> Price Snapshots: Crude was down $0.86, Gold was down $20.90, Dow Index was down 78 and the US $ was up 28.
*The new upside probe in the US Dollar Index should not be embraced at this time.
Weather offers mixed themes, depending upon which model you embrace and how many national acres you find acceptable to have limited precip opportunities. The wettest models this morning are not as wet as they appeared yesterday.
Wheat is lower on less concerning global weather themes. Short-term technical conditions seem to suggest potential for some sort of trading range to unfold up here, rather than an abrupt rejection of the recent rally. Longer-term fundamental foundations haven't been materially altered and an eventual return to recent lows or lower remains very possible. Thus searching for longer-term selling opportunities should be the focus on price recovery attempts towards this week's highs. Expect choppy trade during the next couple of weeks.
Corn experienced a rather stagnant overnight trade after yesterday's sharp losses. Technical conditions are poised to encourage buying interest at current levels from multiple sectors of the trade. Bearish weather spin could be rather short-lived. Here too, there remains no change in the longer-term downside price risk, but that statement could still be true even if the market added 50 cents of weather premium during the next two weeks. Current levels offer reasonable buying opportunities. Short-term upside potential exists above this week's highs.
Soybeans continue to perform very badly. Yet, short-term technical conditions warn not to embrace this weakness and not to believe it is a sign of more trending lower patterns ahead. The overall set-up of this recent extension of the decline that began near the first of the month warns of a very aggressive upside retracement of the now $1.35 decline since early May. I don't want to be bearish here.
In summary, weather spin will be mixed and confidence in any forecast will be wary. Short-term technical conditions warn against embracing the overnight weakness. I don't believe this week's highs have been our summer highs, with the possible exception of wheat. Current levels offer reasonable buying opportunities for those seeking to prepare for more summer upside possibilities.
Barge Values: May= +83 N
CN: Support= 5.95-6.00, Resistance= 6.50
CZ: Support= 5.18-23, Resistance= 5.50-60
**PROFILE: July Corn>. Dec Corn> Expect support to develop at current levels. While this week's high was a key resistance level, I don't believe we have yet experienced our summer high.
Barge Values: May= +63 N
SN: Support= 13.60, Resistance= 14.50
SX: Support= 12.60, Resistance= 13.10
SMN: Support= 400-05, Resistance= 430
BON: Support= 49.50, Resistance= 53.00
**PROFILE: July Soybeans>. Nov Soybeans> New lows for the move. Short-term conditions are not conducive to warranting an embrace of this probe to new lows of this down move. Current levels should b viewed as buying opportunities. IN SUMMARY, long-term support exists at current levels and short-term indicators warn not to embrace weakness. A significant rally phase is likely to evolve, possibly rather quickly, to levels above this week's highs.
Barge SRW Values: May= +50 N
WN: Support= 6.70, Resistance= 7.10-30
**PROFILE: Chicago July Wheat> Overnight levels could be a good level for the bottom zone of a developing trading range environment during the next couple of weeks. Limited upside potential exists above this week's highs, but we could spend some time creating a topping pattern. Search strength efforts during the next couple of weeks for longer-term selling opportunities.
GLOBAL HIGHLIGHTS & HEADLINES: Iran has agreed to more comprehensive UN inspections of its nuclear sites.
This newsletter is prepared from information believed to be reliable. Early Market News, Inc. does not guarantee that such information is accurate or complete and it should not be relied upon as such. Opinions expressed are subject to change without notice.