by Duane Lowry
Friday, October 26, 2012
SUNRISE OUTLOOK OVERVIEW:
*At 7:11 am> Grain/Soy Snapshots: Corn= 1 1/2 higher, Wheat= 4 1/4 higher, Soybeans= 5 3/4 lower.
*Where are we for the WEEK? Dec Wheat= up 1/4 cent; Dec Corn= down 19 1/2 cents; Jan Soybeans= up 29 1/2 cents; Dec Soymeal= up $17.60; Dec Soyoil= down 13 points; Crude Oil= down $4.39; US $ Index= up 43; Gold= down $11.00; Dow Index= down 196.
Day Session Expectations vs Night Session Tone:
Dec Corn: Support= $7.25-30, Resistance= $7.45-50
*Selling interest should limit short-term bounce efforts. We appear vulnerable to expanding liquidation pressures.
Jan Soybeans: Support= $15.35, Resistance= $15.65-70
*No trust in recent gains. We are poised for a significant decline from current levels during the next few weeks. We seem capable of weakening as the day unfolds.
Dec Wheat: Support= $8.50, Resistance= $8.75-80
*Here too, no trust in the sustainability of recent strength.
Outside Market Influences:
At 7:10 am> Price Snapshots: Crude was down $0.21, Gold was down $8.30, Dow Index was down 70 and the US $ was up 16.
*New downtrends have developed. Short-term corrective bounce efforts will find selling interest building above the market in crude, gold and stocks. Overall conditions warn of these markets trending lower in the weeks to come.
Weather offers improved moisture patterns beginning in about a week for northern Brazil.
Wheat has limited new news. Technical conditions warn of downside vulnerability. There is a very real risk that we experience a notable price flushing during the next few weeks. Producers have good new-crop pricing opportunities and it is not difficult to build a case that warrants taking a protective stance.
Corn has little for new news. Charts are faltering and threaten to unleash liquidation pressures. Downside risk may extend below the September lows. Expect technical selling interest to build on minor intraday rally attempts.
Soybeans were weak overnight, probably assisted lower by weak outside market forces. News is limited. Dryness concerns in northern Brazil appear likely to be eliminated with a wetter pattern beginning late next week. Technical selling interest will build above the market and limit short-term recovery attempts. Overall conditions warn of expanding selling energy during the next few weeks and likely violations of recent lows.
In summary, short-term upside follow-through to recent strength is likely to be very limited. Downside vulnerability in all these markets is a test/probe of recent lows, which is not at all expected by popular trader sentiment.
Barge Values: October= +65 Z
CZ: Support= 7.20-25, Resistance= 7.45-50
**PROFILE: Dec Corn> Charts damage continues to unravel. Liquidation pressures can continue. The risk of a test or probe below the September lows need to be respected.
Barge Values: October= +73 X
SF: Support= 15.15, Resistance= 15.65-70
SMZ: Support= 455, Resistance= 480-85
BOZ: Support= 50.50, Resistance= 52.00
**PROFILE: Jan Soybeans> Short-term conditions are not conducive to a new trending higher pattern unfolding. Longer-term support will build below the October lows. IN SUMMARY, I fully anticipate another test/probe of recent lows.
Barge SRW Values: October= +58 Z
WZ: Support= 8.50, Resistance= 8.80-85
**PROFILE: Chicago December Wheat> Short-term rally potential should be limited. Still prone to another downswing below last week's lows. My concern here is that we are poised for a significant new downswing, suggesting downside risk of 75 cents from current levels. New-crop futures offer reasonable and warranted producer hedging opportunities at current levels.
GLOBAL HIGHLIGHTS & HEADLINES:.
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