by Duane Lowry
Tuesday, August 14, 2012
SUNRISE OUTLOOK OVERVIEW:
*At 7:06 am> Grain/Soy Snapshots: Corn= 6 1/4 higher, Wheat= 7 1/4 higher, Soybeans= 8 higher.
Day Session Expectations vs Night Session Tone:
Dec Corn: Support= $7.80-85, Resistance= $8.00-10
*Selling interest will build not far above the overnight highs.
Nov Soybeans: Support= $15.75, Resistance= $16.15-25
*Rally energy should be limited.
Sep Wheat: Support= $8.55, Resistance= $8.75-80
Outside Market Influences:
At 7:05 am> Price Snapshots: Crude was up $0.47, Gold was up $2.40, Dow Index was up 33 and the US $ was down 7.
*The Dow seems vulnerable to a very precipitous decline at any moment that evolves into a multi-month decline.
Weather is similar to yesterday, with a cool temperature theme and moisture opportunities during the next two weeks.
Wheat has little for news and very quickly has retreated to post the lowest settlement price in the past month. New news is limited. Short-term technical conditions has resistance building above the market, with selling interest likely to cap any recovery effort 15-20 cents above yesterday's close. We appear vulnerable to further price unraveling during the next several weeks.
Corn has attempted some recovery during the night session, but all things considered, the attempt seems rather feeble. Recent buyers have been trapped with yesterday's settlement the lowest of the past twelve. Short-term technical conditions will build selling interest not too far above the overnight highs. Overall conditions continue to warn of a significant liquidation phase ahead. The trade is saturated with speculative length and clearly has a bullish-only mentality. The storylines are completely bullish, but price action has underperformed expectations and charts are threatening to accelerate liquidation pressures.
Soybeans experienced recovery attempts overnight. New news is limited. Short-term technical conditions have selling interest building above the market, limiting the scope of upside potential above the overnight highs. Fundamental attitudes are near universally bullish from an overall perspective, but there are fundamental-based traders who do recognize the possibility that yields could be better than recent pessimism has projected. They also recognize the potential for South America to aggressively increase production. With price action in a sideways/topping/distribution pattern for a month and short-term price action seeming tired and burdened with too many longs, there is growing respect/fear that downside risk concerns may have merit. Expect short-term recovery attempts to be met with selling interest and have limited ability to develop any multiday price strength energy.
In summary, price action is underperforming expectations and upside probe attempts seem to have lost all sponsorship energy. Overall conditions warn that liquidation pressures can build during the next few/several weeks.
Barge Values: August= +37 U
CZ: Support= 7.30-60, Resistance= 8.00-10
**PROFILE: Dec Corn> Reversal-down action and firm follow-through. Yesterday was the lowest settlement price of the past 12 trading sessions. Short-term resistance builds in the $8.00-05 zone. It appears as if the liquidation process has capacity to build downside energy.
Barge Values: August= +95 X
SX: Support= 14.90-15.10, Resistance= 16.20-35
SMZ: Support= 440, Resistance= 488-90
BOZ: Support= 51.50, Resistance= 54.25
**PROFILE: Nov Soybeans> Topping action for nearly a month. Overall conditions still warn of a major liquidation phase ahead. Short-term technical conditions offer mixed signals for today. Selling interest will build in the $16.20-35 zone. Downside risk is at least to the $14.50-15.10 range during the next several weeks. IN SUMMARY, the threat of liquidation pressures unfolding remains. Short-term strength should be searched for selling opportunities.
Barge SRW Values: August= +14 U
WU: Support= 8.50, Resistance= 8.90-9.05
**PROFILE: Chicago September Wheat> Yesterday was the lowest settlement price since July 13. Expect selling interest to build above the market around the $9.00, basis Sep. We are poised for more price unraveling in the weeks ahead.
GLOBAL HIGHLIGHTS & HEADLINES:
*Crop Rating Data released yesterday afternoon:
Corn= 23% Good & Excellent, unch from last week, vs 60% last year.
Poor & Very Poor= 51%, vs 50% last week, vs 15% last year.
Corn State Highlights:
Iowa= 16% G&E, unch from last week; 51% P&VP, vs 49% last week.
Illinois= 5% G&E, up from 4% last week; 75% P&VP, vs 74% last week.
Indiana= 9% G&E, up from 7% last week; 71% P&VP, vs 73% last week.
Ohio= 14% G&E, unch from last week; 53% P&VP, vs 52% last week.
Minnesota= 53% G&E, up from 52% last week, 15% P&VP, vs 16% last week.
Nebraska= 31% G&E, down from 35% last week, 41% P&VP, vs 37% last week.
Soybeans= 30% Good & Excellent, up from 29% last week, vs 61% last year.
Poor & Very Poor= 38%, vs 39% last week, vs 13% last year.
Soybean State Highlights:
Illinois= 12% G&E, up from 10% last week; 55% P&VP, vs 57% last week.
Indiana= 16% G&E, up from 15% last week; 50% P&VP, vs 53% last week.
Iowa= 25% G&E, up from 24% last week; 37% P&VP, unch from last week.
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.