by Duane Lowry
Thursday, October 18, 2012
SUNRISE OUTLOOK OVERVIEW:
*At 6:03 am> Grain/Soy Snapshots: Corn= 6 1/2 higher, Wheat= 6 1/2 higher, Soybeans= 18 higher.
*Export Sales data will be released at 7:30. Here are the trade estimates: Wheat= 250-400 tmt, Corn= 200-300 tmt, Soybeans= 650-850 tmt, Soymeal= 180-240 tmt, Soyoil= 10-35 tmt.
Day Session Expectations vs Night Session Tone:
Dec Corn: Support= $7.20-30, Resistance= $7.53-56
*No trust in overnight strength. This market is still vulnerable to pushing below this week's lows during the next several days.
Nov Soybeans: Support= $14.70-80, Resistance= $15.35
*No trust in overnight strength.
Dec Wheat: Support= $8.30-35, Resistance= $8.65-70
*Vulnerable to further short-term weakness below recent lows.
Outside Market Influences:
At 6:02 am> Price Snapshots: Crude was down $0.14, Gold was down $7.80, Dow Index was up 1 and the US $ was up 7.
*Crude and stocks remain vulnerable to expanding selling pressures and aggressive trending lower action during the next several weeks. A major rally for the US Dollar is likely during the next few months.
Weather is similar to yesterday. Brazil's forecast is generally favorable. The US Plains hrw wheat region forecasts lack desired moisture improvement. Areas of the US Midwest will receive improving soil moisture conditions during the next two weeks.
Wheat has little for new news. Overnight corrective strength is impressive and will be anxiously seen as a hopeful sign that the quest for a seasonal low has ended. Short-term technical conditions are not conducive to embracing the overnight strength and warn that we may still have more time to spend finalizing a major bottom. Be respectful of the potential for recent lows to be violated again during the next several days.
Corn pushed higher in follow-through to yesterday's late strength. New news is limited. Short-term technical conditions warn of potential for another push below this week's lows. Overall conditions suggest focusing on viewing short-term probing below recent lows as longer-term ownership opportunities. I don't trust the overnight strength.
Soybeans were sharply higher overnight, but I struggle to offer you a legitimate storyline for this strength. Maybe it is as simple as being a reaction to yesterday's late strength and traders' hopeful anticipation of a major seasonal bottom creating buying activity. New news is limited. Most any bullish storyline you can use today was used throughout the $3 break from the peak. Brazil's weather forecasts are generally favorable. Overall technical conditions tell us to expect a major bottom in the current time/price zone. Short-term technical conditions warn of vulnerability to additional time being spent down here, which can and likely does will include a probe below this week's lows. Significant upside potential exists during the next few months, but I don't think the longer-term trader should be embracing the overnight strength. Seek to buy the next probe below recent lows.
In summary, traders will be excited about the overnight gains and anxious to believe we have started the next rally phase from the seasonal lows. I sense we should view the overnight strength as confirmation that we are in fact in the right time/price zone for a major seasonal bottom, but the process of defining this major low can still include further testing/probing of this week's lows before this process is complete.
Barge Values: October= +63 Z
CZ: Support= 7.15-25, Resistance= 7.53-58
**PROFILE: Dec Corn> Seasonal lows have likely already been established. Overnight strength has not removed vulnerability to short-term weakness that violates this week's lows and opens a door to a further test of the late September low. Overall conditions suggest searching further weakness probes for longer-term ownership opportunities.
Barge Values: October= +74 X
SX: Support= 14.70-85, Resistance= 15.30
SMZ: Support= 440-50, Resistance= 465
BOZ: Support= 49.00-50, Resistance= 52.00
**PROFILE: Nov Soybeans> Downside price targets have been achieved. Longer-term support should build around this week's lows. Any further downside probes should be limited and lack sustainability. IN SUMMARY, we are in the right time and price zone to establish a major longer-term bottom. Does the overnight strength confirm that we are done defining the seasonal lows, or could we still have a process that leads to more testing/probing of this week's lows? Search for longer-term ownership opportunities to position for the South American growing season, with a bias that we have not yet established the low tick.
Barge SRW Values: October= +57 Z
WZ: Support= 8.20-30, Resistance= 8.65
**PROFILE: Chicago December Wheat> Short-term resistance to build near the overnight highs. Further short-term chart erosion is possible during the next several days.
GLOBAL HIGHLIGHTS & HEADLINES:.
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