by Duane Lowry
Thursday, September 27, 2012
SUNRISE OUTLOOK OVERVIEW:
*At 5:45 am> Grain/Soy Snapshots: Corn= 3 3/4 lower, Wheat= 3 lower, Soybeans= 4 lower.
*Export Sales data will be released at 7:30. Here are the trade estimates: Wheat= 300-600 tmt, Corn= 125-300 tmt, Soybeans= 600-800 tmt, Soymeal= 175-300 tmt, Soyoil= 10-50 tmt.
*Tomorrow USDA will release its Quarterly Grain Stocks report, as of September 1st.
Here are the trade estimates:
Wheat= 2.281 bil avg, range= 2.159-2.533, Last Year= 2.147 bil.
Corn= 1.126 bil avg, range= 887 mil-1.261 bil, Last Year= 1.128.
Soybeans= 132 mil avg, range= 115-152, Last Year= 215 bil.
Day Session Expectations vs Night Session Tone:
Dec Corn: Support= $7.17-22, Resistance= $7.30-35
*Stabilize, maybe reverse the early morning weakness.
Nov Soybeans: Support= $15.65-70, Resistance= $15.80-85
*Stabilize, maybe recover.
Dec Wheat: Support= $8.60-65, Resistance= $8.80
Outside Market Influences:
At 5:44 am> Price Snapshots: Crude was up $0.48, Gold was up $4.90, Dow Index was up 65 and the US $ was down 8.
*Short-term recovery in crude that maybe lasts a few days.
Weather is similar to yesterday, offering little market influence.
Wheat traded both sides overnight. News is limited. Price action is weak and charts warn of more trending lower activity. Short-term indicators offer some potential for stabilization and recovery efforts today, possibly rejecting the early morning weakness as the day evolves. Any strength today isn't likely to generate follow-through tomorrow.
Corn continues to suffer from liquidation pressures. Short-term indicators offer some hope for reversal-up action today. Interesting to see confirmation of the largest-ever deal to import corn into the US. Overnight values are the lowest seen since early July. Producers are now fearful the market will take too long to recover from this price slide, impacting their crop insurance payouts. Major support will develop in the $6.75-7.15 zone. That defines downside risk and that area will likely produce a major bottom and buying opportunities to position for some sort of winter/spring rally phase. How far we probe into that area and how long we churn down here remains to be seen. It appears that we will spend more time bottoming than most desire.
Soybeans are attempting to stabilize after yesterday's downside rout. News is limited. Trader yield ideas have ratcheted higher. Short-term technical conditions offer some hope of stabilization/recovery today. Overall conditions warn that 1-3 day recovery efforts will falter and further trending lower action remains very possible.
In summary, we have little for news. Trader sentiment is very demoralized. Short-term technical conditions suggest some potential to reverse early morning weakness as the day evolves. Pre-report positioning may tilt in favor of short-covering. Overall conditions warn that more time and price erosion may be necessary before seasonal bottoms can be scored.
Barge Values: September= +65 Z
CZ: Support= 7.10-20, Resistance= 7.35-40
**PROFILE: Dec Corn> Liquidation process is advancing and maturing. Long-term support layers will develop on probes below $7.20. Further weakness will need to be searched for longer-term ownership opportunities. A major bottom will evolve from the $6.75-7.20 zone during the next few/several weeks. How far we can probe this zone and how long we spend here remains to be seen. The answer to the "time" aspect of this will be very important, especially for all the US farmers' insurance proceeds that will be at the mercy of the market's timing. All market moves have winners and losers, does the previous sentence bring to mind any possible "winners" from the recent price slide?
Barge Values: September= +77 X
SX: Support= 15.50-70, Resistance= 16.10-20
SMZ: Support= 465-70, Resistance= 495
BOZ: Support= 52.00, Resistance= 55.00
**PROFILE: Nov Soybeans> Charts continue to unravel. IN SUMMARY, we are into an area that may cause some stabilization and minor recovery, but overall conditions warn that more downside potential exists during the next few weeks. Long-term major support will be found in the $14.50-15.00 and needs to be respected as a potential price zone for a seasonal bottom.
Barge SRW Values: September= +50 Z
WZ: Support= 8.50, Resistance= 8.80-85
**PROFILE: Chicago December Wheat> We may be poised for a notable downside push during the next several weeks. 1-3 day correction attempts will lack vigor.
GLOBAL HIGHLIGHTS & HEADLINES: Three North Carolina livestock companies confirm that they have signed deals to import 750 tmt Brazilian corn into the US. Senior Vice President of Prestage Farms, Inc., John Prestage told Reuters News that Bunge and ADM and possibly others were involved in what is believed to be the largest deal ever to import corn into the US. The imports are scheduled to arrive in 15 cargoes over the next 6 months, with the first to arrive next week. Other livestock companies are said to be involved at different stages of other import deals. A new Israeli foreign ministry report says that sanctions are having a devastating impact on Iran, citing Iran's oil exports have declined 50% in the past year, while food and electricity prices have skyrocketed. The NFL reached an agreement with the refs and the regular refs will officiate tonight's game.
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.