by Duane Lowry
Friday, August 17, 2012
SUNRISE OUTLOOK OVERVIEW:
*At 6:29 am> Grain/Soy Snapshots: Corn= 1 3/4 lower, Wheat= 8 higher, Soybeans= 7 1/4 higher.
*Where are we for the WEEK? Sep Wheat= down 23 1/2 cents; Dec Corn= down 1 3/4 cents; Nov Soybeans= down 18 1/2 cents; Dec Soymeal= down $5.30; Dec Soyoil= down 75 points; Crude Oil= up $2.73; US $ Index= up 27; Gold= down $3.60; Dow Index= up 53.
Day Session Expectations vs Night Session Tone:
Dec Corn: Support= $7.80-85, Resistance= $8.15-20
*Limited ability to build sustainable upward momentum.
Nov Soybeans: Support= $16.00, Resistance= $16.35
*Vulnerable to expanding selling interest.
Sep Wheat: Support= $8.40, Resistance= $8.70-80
*Corrective rally nearing major resistance.
Outside Market Influences:
At 6:28 am> Price Snapshots: Crude was down $0.55, Gold was down $4.40, Dow Index was down 7 and the US $ was up 9.
*The Dow seems vulnerable to a very precipitous decline at any moment that evolves into a multi-month decline. Don't embrace this upside probe.
Weather maintains a cool theme and is similar to yesterday. The trade isn't taking any price action cues from weather at this time.
Wheat continued its corrective theme overnight is nearing key resistance levels. Further price strength should prove to be very limited. News is limited. Technical selling will build on probes above $8.75, basis Sep. We are poised to unfold price weakness below this week's lows during the next few/several weeks.
Corn didn't manage to trade into positive territory overnight, despite wheat firmness and soybean upside probes. New news is limited. Weather isn't a focus. Trader rhetoric is completely and universally bullish. Price action is weak and charts threaten to roll over, which could quickly trigger expanding liquidation pressures. We remain very vulnerable to a pre-harvest liquidation phase.
Soybeans traded on both sides overnight after yesterday's reversal-down action. New news is limited. Short-term technical conditions suggest selling interest will build above the market, but in front of yesterday's highs, limiting ability to build upon the overnight gains. Many areas have benefitted from recent moisture events and cooling temperature themes. There can be debate about production potential, but whatever potential still exists, it would appear that we are getting weather that will maximize that potential. Overall conditions warn of vulnerability to a very significant pre-harvest liquidation event.
In summary, there is nothing new for news and we are not responding to or focusing on daily weather changes. Charts are vulnerable to increased technical selling pressures amid rolling over themes. The spec community is saturated with length and the fundamental crowd is completely one-sided in its thinking. The ingredients remain the same and we are vulnerable to expanding liquidation pressures in a pre-harvest price decline.
Barge Values: August= +19 U
CZ: Support= 7.45-55, Resistance= 8.15-20
**PROFILE: Dec Corn> Poised for a liquidation flushing phase.
Barge Values: August= +105 X
SX: Support= 14.90-15.10, Resistance= 16.35
SMZ: Support= 440, Resistance= 492-95
BOZ: Support= 51.50, Resistance= 54.25
**PROFILE: Nov Soybeans> Vulnerable to a downside acceleration. IN SUMMARY, the threat of liquidation pressures unfolding remains. Short-term strength should be searched for selling opportunities.
Barge SRW Values: August= +30 U
WU: Support= 8.35-40, Resistance= 8.65-80
**PROFILE: Chicago September Wheat> Corrective activity nearing major resistance. More downside potential exists below this week's lows.
GLOBAL HIGHLIGHTS & HEADLINES: The Wall Street Journal published an article quoting Fed hawks and their views that further Fed stimulus may provide little benefit. They also suggest Congress has the potential and obligation to do more to impact the US jobless rate, but remains in political gridlock that negatively impacts US economic growth because of the uncertainty the current Congress creates for US businesses, as well as consumers. China sold 400 tmt soybeans from state reserves in an auction and plan to continue sales every two weeks to increase supplies and lower prices. Today's values were lower than the last auction.
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.