by Duane Lowry
Thursday, May 24, 2012
SUNRISE OUTLOOK OVERVIEW:
*At 5:49 am> Grain/Soy Snapshots: Corn= 5 1/4 higher July, 1 3/4 higher Dec, Wheat= 7 3/4 higher, Soybeans= 12 higher Nov.
Day Session Expectations vs Night Session Tone:
Dec Corn: Support= $5.17-22, Resistance= $5.35
*Expect buying interest to develop on any probes into negative territory and limit any further downside potential at this time.
Nov Soybeans: Support= $12.57-62, Resistance= $12.85
*Good support will evolve around/just below yesterday's settlement price.
July Wheat: Support= $6.65, Resistance= $6.85
*Expect consolidation activity that respects yesterday's levels as cheap enough for now.
Outside Market Influences:
At 5:48 am> Price Snapshots: Crude was up $0.94, Gold was up $17.20, Dow Index was up 43 and the US $ was down 2.
*Expect stabilization in crude today, with recovery unfolding during the next several days.
*Export Sales data will be released at 7:30 this morning. Here are the trade estimates: Wheat= 400-800 tmt, Corn= 900-2000 tmt, Soybeans= 700-1100 tmt, Soymeal= 75-200 tmt, Soyoil= 10-30 tmt.
Weather still offers mixed themes, but it seems to me that we are likely to leave to many acres with limited precip if the current two-week outlook verifies.
Wheat will be well supported on tech-related buying interest that will build near/above yesterday's lows. News is limited. Maybe today produces consolidation action?
Corn will be well supported above yesterday's lows. News is limited. Weather forecasts aren't likely to have a bearish influence on market sentiment at current values from those who want to label weather as bearish. Current prices are cheap enough while we have legitimate weather anxiety. Consolidation activity seems like a worse-case scenario for today. If the bearish weather spin of the past two days proves to be a mistake and perceptions of improved moisture potential proves to be a disappointment in the coming days, it remains possible that corn's upside price reaction from current levels could be quite abrupt and dramatic. Such a scenario could create a push towards the $5.70-90 zone. This would be high enough to chase most existing shorts out of the market. However, the overall longer-term fundamental conditions argue against sustaining such a price move and producers need to view such an event as an extremely warranted pricing opportunity.
Soybeans performed well overnight as expected, finding support from the technical sectors and ideas the outside market weight may soon ease. Weather spins are mixed. Expect technical buying interest to surface on any test/probes of yesterday's close, limiting any ability to build downside momentum. While I believe we are poised for a very impressive rally unfolding from the area of yesterday's values, it wouldn't surprise me to see today's early buyers disappointed by the close.
In summary, weather spin will remain mixed but I see good potential that bearish expectations will be disappointed as moisture events pass. Technical conditions will encourage buying interest to build at yesterday's levels, limiting any ability to develop downside momentum. While the longer-term outlook warns of potential for significantly lower prices, we may still have a notable rally phase that develops first.
Barge Values: May= +83 N
CN: Support= 6.00-05, 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= 49.00, Resistance= 53.00
**PROFILE: July Soybeans>. Nov Soybeans> Short-term conditions are not conducive to warranting an embrace of this probe to new lows of this down move. Yesterday's closing values should be viewed as buying opportunities. IN SUMMARY, long-term support exists around/above yesterday's finish. A significant rally phase is likely to evolve from current levels.
Barge SRW Values: May= +50 N
WN: Support= 6.70, Resistance= 7.10-30
**PROFILE: Chicago July Wheat> Yesterday's lows should represent 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.
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