Thursday, June 28, 2012
SUNRISE OUTLOOK OVERVIEW:
*At 6:32 am> Grain/Soy Snapshots: Corn= 10 1/4 higher, Wheat= 1 1/4 lower, Soybeans= 1 lower.
Day Session Expectations vs Night Session Tone:
Dec Corn: Support= $5.80-85, Resistance= $6.30-50
*We seem vulnerable to long liquidation pressures today.
Nov Soybeans: Support= $13.70 area, Resistance= $14.45
*Short-term technical conditions warn of downside vulnerability. Longer-term upside potential remains.
Sep Wheat: Support= $7.00, Resistance= $7.55-65
*Upside price targets have been achieved. Further strength will create longer-term selling opportunities.
Outside Market Influences:
At 6:30 am> Price Snapshots: Crude was up $0.20, Gold was down $6.70, Dow Index was down 45 and the US $ was down 7.
Weather provides much-above temperatures in virtually all regions during the next ten days. The 11-15 day period temps were cooler than yesterday's outlook. Precip has a wetter slant than yesterday in all sections of the two-week outlook, but precip totals are still seen as questionable. It seems to me that the midday maps will be at risk of showing more precip. Overall conditions still warn of stressful crop conditions for many acres during the next two weeks.
Wheat has accomplished its short-cleansing missions. Upside price targets have been achieved. Further "me too" price strength is possible, but it is time to be searching for longer-term selling opportunities. We are into an area that can carve out price action that implies we are already at price levels capable of being the upper parameters for the next several months. View any strength as worthy of a search for longer-term selling opportunities.
Corn managed to recover part yesterday's retreat from the highs, but overall performance still seems to be poor in relationship to the weather/crop fundamentals. Many emotional buyers from yesterday were trapped with losing positions and this could lead to liquidation pressures today out of respect for tomorrow's USDA reports. Also, while still very troublesome for crops, today's forecast appears to have a risk of future reports becoming slightly wetter, including today's midday outlook. Upside price objectives have been met. Short-term technical conditions warn of waning upside momentum/sustainability of further strength attempts. I know the weather is scary and makes a compelling bullish argument, but too many things don't feel right here. Bulls should consider taking profits and enjoying the relaxation of the sidelines.
Soybeans failed to hold early strength efforts and seem to be adding credibility to yesterday's retreat, despite brutal weather conditions. Tomorrow's acreage report could certainly offer notable risk for either bulls or bears. Technical conditions seem capable of building buying enthusiasm under the market. Fundamental factors should also be encouraging buyers to build positions on weakness. Longer-term confident/comfortable support is probably 40 cents below yesterday's close. A post-report spike down seem plausible to me, as revenue shifts were strongly encouraging producers to plant more soybeans very late in the decision process, but weather and overall fundamental support should still limit sustainability of downside probes and still offers greater upside potential.
In summary, price action should be making bulls nervous/frustrated. Weather is still very troubling for crops, but in the perverse world of futures trading, the forecasts offer some slants that will also make bulls a bit nervous. There will be some rains developing in the northern areas tomorrow. Once the rain begins to show on the radar there will be increased fears that it could prove to be better than expected, especially when the bar of expectations has already been set so low. The Supreme Court decision on the Affordable Care Act could also add to potential for market volatility. Lots of risk here for both bulls and bears.
Barge Values: June= +69 N
CZ: Support= 5.80-85, Resistance= 6.60
**PROFILE: Dec Corn> Upside price targets have been reached. Short-chasing has been thorough. Yesterday's emotional and late arriving bulls went home with losing positions. My thoughts are that bulls should be taking profits and moving to the sidelines. We may spend time up here and even probe above yesterday's highs, but from here forward we will most likely disappoint trader expectations.
Barge Values: June= +65 N
SX: Support= 13.50-75, Resistance= 14.70-85
SMN: Support= 415-20, Resistance= 465
BON: Support= 50.00, Resistance= 53.00
**PROFILE: Nov Soybeans> Mixed short-term signals. More longer-term upside potential exists, possibly a lot more. Support and buying interest will build around yesterday's lows, limiting ability to develop meaningful weakness. IN SUMMARY, more upside potential exists, but I wouldn't rule out choppy trade that tests/probes yesterday's low first.
Barge SRW Values: June= +28 N
WU: Support= 7.00, Resistance= 7.50-70
**PROFILE: Chicago September Wheat> Chart/tech short-covering triggering activity would seem to have accomplished its goals. Selling interest may begin building on tests of yesterday's highs. Longer-term selling opportunities should develop during the next several days.
GLOBAL HIGHLIGHTS & HEADLINES:.
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