by Duane Lowry
Friday, May 11, 2012
Corn= lower, Wheat= lower/stabilizing/maybe recovery, Soybeans= lower.
*At 6:54 am> Night session results: Corn= 3 1/4 lower, Wheat= 3 lower, Soybeans= 16 lower.
*Where are we for the WEEK? July Wheat= down 8 1/4 cents; July Corn= down 32 3/4 cents; Dec Corn= down 17 cents; July Soybeans= down 23 cents; Nov Soybeans= down 7 3/4 cents; July Soymeal= down $8.00; July Soyoil= down 15 points; Crude Oil= down $1.41; US $ Index= up 67; Gold= down $49.70; Dow Index= down 123.
Weather offers mostly warm temperature themes during the next two weeks, creating optimum emergence/early growth conditions in nearly all areas.
Wheat will lean easier on overnight weakness. New news is limited. Inter-market spread unwinding/shifting could limit ability to build short-term downside momentum. This may set the stage for some short-covering activity? Overall conditions warn of still lower values in the weeks ahead, but it would not be difficult to imagine or out of character for this market to create some visible pre-harvest peak from which to decline into harvest. Short-term bears may be a bit vulnerable?
Corn will start lower on overnight weakness. July futures are trading at the lowest values since March 2011, with Dec not having seen current values since February 2011. Trader sentiment is beginning to expand acceptance of the changing fundamental foundation, suggesting selling interest will build on small recovery bounce attempts. We appear poised to see selling interest build from multiple sectors of the trade. If we don't experience a notable weather threat between now and the middle of June, prices could erode quite significantly.
Soybeans will start lower on notable overnight declines. Technical conditions are poised to build selling interest on minor recovery attempts. Liquidation pressures could limit those minor recovery attempts. Most traders concede yesterday's bullish carryout figure from USDA will be the lowest of the season, unless we develop a weather problem. Downside risk is very significant in the coming weeks.
In summary, trader sentiment is quickly abandoning previous bullish-only sentiment and bulls are seeking the sidelines. Expect this to evolve into new traders willing to sell rallies. Most are ready to concede that prices will work lower until/unless a US weather problem develops. At 6:53 this morning: Crude was down $0.86, Gold was down $12.00, Dow Index was down 63 and the US $ was up 12.
Barge Values: May= +82 N
CN: Support= 5.65-70, Resistance= 6.00-10
CZ: Support= 4.75, Resistance= 5.10-15, 30
**PROFILE: July Corn> Lowest values since March 2011. Liquidation pressures can expand. Dec Corn> Resistance in a price ceiling format will likely exist around $5.30. Increased selling interest will build in the $5.10-15 zone. We remain poised for trending lower values in the weeks ahead.
Barge Values: May= +52 N
SN: Support= 13.50, Resistance= 14.50-60
SX: Support= 13.00, Resistance= 13.50-60
SMN: Support= 400, Resistance= 425
BON: Support= 52.00, Resistance= 55.00
**PROFILE: July Soybeans> Selling energy will build above $14.50. We are poised for liquidation pressures to unfold. Nov Soybeans> Downside risk is very significant during the next several weeks. IN SUMMARY, search short-term rally attempts for selling opportunities.
Barge SRW Values: May= +53 N
WN: Support= 5.75, Resistance= 6.20-30
**PROFILE: Chicago July Wheat> Short-term recovery potential above $6.25 will be limited, but wheat could experience some short-covering energy. Overall conditions warn of declining price trends in the weeks ahead.
GLOBAL HIGHLIGHTS & HEADLINES: .
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