by Duane Lowry
Monday, October 29, 2012
SUNRISE OUTLOOK OVERVIEW:
*At 6:52 am> Grain/Soy Snapshots: Corn= 5 3/4 higher, Wheat= 6 higher, Soybeans= 13 1/4 lower.
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 as the week unfolds.
Jan Soybeans: Support= $15.35, Resistance= $15.55-58
*No trust in recent gains. Short-term recovery of overnight losses is likely to be limited.
Dec Wheat: Support= $8.50, Resistance= $8.70-75
*Early morning dime rally from the overnight low seems suspect. Here too, no trust in the sustainability of recent strength. Expect price weakness to evolve as the week unfolds.
Outside Market Influences:
At 6:51 am> Price Snapshots: Crude was down $0.67, Gold was down $1.80, Dow Index was down 84 and the US $ was up 14.
*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 beneficial drying conditions developing during the next several days in Argentina and southern Brazil, with improved moisture patterns developing for northern Brazil. Two moisture systems during the next 10 days for Western Australia will improve/stabilize conditions there. US Plains hrw wheat moisture will be less than desired, with 6-10 day moisture opportunities favoring the southeastern region.
Wheat has limited new news. Friday's settlement was the lowest of the past 7 trading sessions. Technical conditions warn of downside vulnerability. Trader sentiment is very bullish wheat and they have build notable long positions during the past several days. 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. Overnight trade matched the lowest values seen this month, but recovered 13 cents by sunrise. Trader sentiment is bullish and many longs have been established during the past three weeks. Yet, price action has been underperforming expectations. Technical selling interest should limit short-term strength potential above $7.50. Overall conditions warn of liquidation pressures and a full test and possible probe of the September lows during the next few weeks.
Soybeans traded 20 lower at one point overnight. Beneficial moisture patterns appear ready to develop for northern Brazil. Technical conditions are not conducive to trusting recent gains. Overall conditions warn of liquidation pressures and price erosion during the next few weeks.
In summary, we have little for news. Trader sentiment is very bullish wheat and corn, but price action has been underperforming expectations and we are on the verge of long liquidation pressures. Overall conditions in all these markets warn of price erosion during the next few weeks, possibly testing/violating recent lows.
Barge Values: October= +65 Z
CZ: Support= 7.20-25, Resistance= 7.45-50
**PROFILE: Dec Corn> Overnight weakness matched the lowest trade of the month. Expect resistance around $7.50 to limit short-term corrective strength potential. Overall conditions warn of price erosion during the next few weeks.
Barge Values: October= +76 X
SF: Support= 15.15, Resistance= 15.50-60
SMZ: Support= 455, Resistance= 480-85
BOZ: Support= 49.50, Resistance= 51.30
**PROFILE: Jan Soybeans> Short-term conditions are not conducive to a new trending higher pattern unfolding. Short-term resistance will build in front of Friday's settlement. Longer-term support will build below the October lows. IN SUMMARY, I fully anticipate another test/probe of the October lows.
Barge SRW Values: October= +60 Z
WZ: Support= 8.50, Resistance= 8.75
**PROFILE: Chicago December Wheat> Friday was the lowest settlement of the past 7 trading sessions. Short-term recovery potential above $8.75 is likely to be limited. Overall conditions warn of price erosion during the next few weeks. New-crop futures offer reasonable and warranted producer hedging opportunities at current levels.
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.