by Duane Lowry
Friday, September 28, 2012
SUNRISE OUTLOOK OVERVIEW:
*At 8:05 am> Grain/Soy Snapshots: Corn= 21 1/2 higher, Wheat= 19 1/2 higher, Soybeans= 2 higher.
*Where are we for the WEEK? Dec Wheat= down 41 3/4 cents; Dec Corn= down 32 cents; Nov Soybeans= down 51 cents; Dec Soymeal= down $12.10; Dec Soyoil= down 225 points; Crude Oil= down $1.04; US $ Index= up 19; Gold= up $2.50; Dow Index= down 86.
*At 7:30, USDA released the following Quarterly Grain Stocks data, as of September 1st.
Wheat= 2.104 bil, vs 2.281 bil avg, range= 2.159-2.533, Last Year= 2.147 bil.
Corn= 988 mil, vs 1.126 bil avg, range= 887 mil-1.261 bil, Last Year= 1.128.
Soybeans= 169 mil, vs 132 mil avg, range= 115-152, Last Year= 215 bil.
Day Session Expectations vs Night Session Tone:
Dec Corn: Support= $7.17-22, Resistance= $7.35-45
*Stalling/faltering upside momentum.
Nov Soybeans: Support= $15.40, Resistance= $15.80-85
*Selling interest surfacing on probes into positive territory.
Dec Wheat: Support= $8.40, Resistance= $8.80
*Limited ability to stage a multi-day rally event.
Outside Market Influences:
At 7:59 am> Price Snapshots: Crude was unchanged, Gold was down $1.30, Dow Index was down 62 and the US $ was unchanged.
*Short-term recovery in crude that maybe lasts a few days.
Weather is similar to yesterday, offering little market influence.
Wheat is higher on smaller than expected quarterly stocks. While this figure looks significant, I don't believe this will be a talking point for very long. US and global supplies are still very plentiful. Technical conditions are such that recovery rallies such as this morning's knee-jerk upshot should be seen as selling opportunities. This market doesn't have a foundational bullish storyline.
Corn is higher on lower than expected quarterly stocks and especially since they were below the psychological 1 bil mark. However, considering the fact that the trade sold off hard into this report on liquidation, are we to be impressed with corn 20 higher this morning, when it is still 12 cents lower than it was last Friday? We have entered a long-term support zone and achieved downside targets. So, it is true that we should be expecting a major seasonal bottom to form, but that doesn't necessarily mean we immediately shift to a new uptrend. It remains possible that this market spends a few weeks slopping around in a process that defines the seasonal bottom. Such a process could ultimately include a jab of today's lows.
Soybeans received bearish information from USDA, but traded on both sides due to the excitement and influence of corn. Traders are also bracing for higher USDA production estimates. Technical conditions suggest short-term bounce efforts will falter. We remain vulnerable to evolving lower values during the next few weeks.
In summary, today's USDA data is worthy of knee-jerk reactions, but I don't think they offer any new themes traders haven't known for a long time. We are in the process of searching for seasonal lows. This process can be messy and we likely will take a few more weeks for this to all run its course. Thus, don't assume today's data will suddenly create a new uptrend that builds expanding upside momentum.
Barge Values: September= +65 Z
CZ: Support= 6.90-7.05, Resistance= 7.35-40
**PROFILE: Dec Corn> A major bottom will evolve from the area $6.75-today's low during the next few/several weeks. How far we can probe this zone and how long we spend here remains to be seen.
Barge Values: September= +77 X
SX: Support= 15.35, Resistance= 15.80-95
SMZ: Support= 440, Resistance= 485
BOZ: Support= 52.00, Resistance= 55.00
**PROFILE: Nov Soybeans> 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= 8.25, Resistance= 8.80-85
**PROFILE: Chicago December Wheat> We are vulnerable to more trending lower action. 1-3 day correction attempts will lack vigor.
GLOBAL HIGHLIGHTS & HEADLINES:.
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.