by Duane Lowry
Friday, May 25, 2012
Corn spent much of the day in a relative narrow range near where prices were at sunrise. An attempt to weaken values during the noon hour failed and prices recovered to finish near the upper part of today's range, with Dec up 6 1/2 cents. July futures were unchanged as spread liquidation continued. Dec will be well supported around last week's lows, limiting short-term downside momentum at this time. If weather concerns escalate, $5.70-90 will be the major upside price targets.
Soybeans experienced a mostly firm session, with pre-noon hour weakness rejected with new session highs near today's finish, settling up 13 cents. Technical buying interest will build around/just above last week's lows, limiting any ability to build new downside momentum at this time. If weather fears escalate next week, which would need a change in the current "all/most will be well" forecast interpretations, prices could quickly push higher. Weather fears could lead to a test of the highs made early in the month.
Wheat finished well into positive territory, up 15 1/2 cents, but eight cents off the day's high. News is limited. Global weather fears are easing. If US row crop weather fears grow, inter-market spreaders will likely be selling wheat against long row-crop activity. News is limited. This week's highs likely represent values that offer little longer-term upside potential. .
In summary, weather is the key for the next direction. Traders have been trading weather news all week, but most seem it is a bit premature and this can be seen in price action. However, traders will quickly become significantly more inflammatory with rhetoric if forecasts next week back away from moisture expectations found in the past few days' forecasts. Overall conditions warn of very significant downside risk, but short-term technical conditions seem to argue for an upward push first. At the time of the grain close: Crude= up $0.27, Gold= up $14.80, Dow Index= down 103 and the US Dollar= up 3.
WEATHER: Midday forecasts were similar to this morning's discussions, with precip most short-changed in the eastern/southeastern US Midwest.
NEWS: *New trading hours have begun, 5:00 pm to 2:00 pm!
REPORT WATCH: *Grain trading will resume Monday evening at 5:00.
Monday night's grain trade outlook: Weather will be the key focus. Traders leave for the weekend today anticipating weather forecasts will have moisture and prices will be down early next week. Technical conditions will encourage buying activity to build near this week's lows, limiting any short-term downside potential. Any disappointment in precip expectations by Monday's forecast won't be handled gracefully, as many in the trade believe recent weather concerns have been premature and crops are off to a great start, so the element of surprise here rests with the bulls.
Humor/Quote of the Day:
What is defeat? Nothing but education; nothing but the first step to something better.
A reformer is one who sets forth cheerfully toward sure defeat.
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.