by Duane Lowry
Tuesday, October 16, 2012
SUNRISE OUTLOOK OVERVIEW:
*At 6:48 am> Grain/Soy Snapshots: Corn= 7 3/4 higher, Wheat= 8 1/2 higher, Soybeans= 13 1/4 higher.
Day Session Expectations vs Night Session Tone:
Dec Corn: Support= $7.30-35, Resistance= $7.45-50
*Questioning ability to build upon or sustain the overnight strength.
Nov Soybeans: Support= $14.80-95, Resistance= $15.05-10
*We are in the final stages of defining a major bottom. Short-term conditions suggest a few days of sloppy trade, which questions short-term ability to sustain overnight gains.
Dec Wheat: Support= $8.30-35, Resistance= $8.60
*Expect a few days of sloppy trade, which can lead to tests/probes of yesterday's lows.
Outside Market Influences:
At 6:44 am> Price Snapshots: Crude was up $0.45, Gold was up $7.10, Dow Index was up 64 and the US $ was down 38.
*Short-term recovery efforts in gold and stocks.
Weather disruptions to US harvest to be minimal. US Plains will receive limited moisture during the next 10 days. Beneficial moisture will move across Brazil during the next several days. Dryness concerns will continue for Western Australia, but some moisture opportunities exist there early next week.
Wheat has little for new news. Yesterday's push to new lows has few wanting to embrace this weakness. Short-term technical conditions will have resistance building near/just above the overnight highs, questioning potential to build upon the overnight strength and warning that it may falter as the day evolves. Overall conditions should evolve a major bottom during the next several days, but this process could include a test/probe of yesterday's lows. We are in the process of defining a major bottom, but I am not sure the low tick has yet been established.
Corn was firm overnight, but here too may find limited ability to build upon these gains during the day session. New news is limited. The market is still burdened with longs established last week. The seasonal bottom has already been established, but further probing in search of support below yesterday's lows is certainly possible. Overall conditions suggest searching short-term weakness for longer-term buying opportunities.
Soybeans were impressively higher overnight in follow-through to yesterday's late recovery and amid hopes this market's downside washout has climaxed. Downside price objectives have been met. Liquidation has been thorough and seems likely to be mature. That said, we can spend more time churning down here finalizing a major bottom. Expect a few days of sloppy trade. Good upside potential exists from current price levels. Focus on longer-term ownership opportunities, preparing for the South American growing season.
In summary, we are in the final stages of establishing major seasonal bottoms. This process can spend some time churning down here, which can lead to some minor probes of yesterday's lows. We have little for new fundamental storylines and price action that has not been connected to any particular fundamental storyline and has disappointed most that attempted to make such a tie. It is time to be searching for longer-term ownership opportunities.
Barge Values: October= +63 Z
CZ: Support= 7.15-25, Resistance= 7.60
**PROFILE: Dec Corn> Seasonal lows have likely already been established. Short-term weakness should be evaluated from that perspective. We can spend more time churning down here, which could even lead to a test of support around $7.20. Overall conditions suggest searching further weakness probes for longer-term ownership opportunities.
Barge Values: October= +74 X
SX: Support= 14.80-95, Resistance= 15.60-70
SMZ: Support= 450-55, Resistance= 485
BOZ: Support= 49.50, Resistance= 52.00
**PROFILE: Nov Soybeans> Downside price targets have been achieved. Longer-term support should build around yesterday's lows. IN SUMMARY, we are in the right time and price zone to establish a major longer-term bottom. Search for longer-term ownership opportunities to position for the South American growing season.
Barge SRW Values: October= +57 Z
WZ: Support= 8.35-40, Resistance= 8.90
**PROFILE: Chicago December Wheat> Chart erosion. We could spend a bit more time churning down here and possibly probing yesterday's lows. Do not expect meaningful downside momentum or sustainability to develop. Good upside potential will evolve from the bottom that we will finishing defining during the next few/several days.
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.