by Duane Lowry
Wednesday, October 31, 2012
SUNRISE OUTLOOK OVERVIEW:
*At 5:21 am> Grain/Soy Snapshots: Corn= 5 3/4 higher, Wheat= 10 3/4 higher, Soybeans= 11 1/4 higher.
*Where are we for the MONTH? Dec Wheat= down 45 3/4 cents; Dec Corn= down 14 1/2 cents; Jan Soybeans= down 66 1/4 cents; Dec Soymeal= down $10.90; Dec Soyoil= down 257 points; Crude Oil= down $6.88; US $ Index= down 3; Gold= down $61.80; Dow Index= down 301.
Day Session Expectations vs Night Session Tone:
Dec Corn: Support= $7.25, Resistance= $7.50-53
*Overnight gains likely to be maintained, but still corrective in nature.
Jan Soybeans: Support= $15.05, Resistance= $15.52-57
*Further upside probing possible above yesterday's highs, but this is not the beginning of a new uptrend.
Dec Wheat: Support= $8.40, Resistance= $8.70-75
*Overnight strength to be sustained today, but overall theme of questionable sustainability to remain.
Outside Market Influences:
At 5:15 am> Price Snapshots: Crude was up $0.69, Gold was up $6.80, Dow Index was up 50 and the US $ was down 18.
*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. Today's stock market enthusiasm with the opening of the Wall Street does seem vulnerable to disappointment by the closing bell.
Weather is similar to yesterday, offering beneficial drying conditions for Argentina and improved moisture patterns for northern Brazil.
Wheat has limited new news. After four consecutive lower closes, today's gains will likely be maintained into the closing bell. However, layers of technical resistance exist and we are not likely looking at multiday price strength here. Overall conditions warn of price erosion below the October lows 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. Layers of resistance will build around $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 are in the process of testing resistance that exists just above yesterday's highs. News is limited. South American weather is improving. Overall conditions warn of more vulnerability and probably a push below the October lows.
In summary, we have little for news. Technical conditions are not conducive to transforming short-term corrective bounces into new trending higher patterns. Attitudes were very bullish at the end of last month. A look at "Where we are for the month" above shows how the market has underperformed expectations and that even with strength today we remain in a position that is likely to trigger selling interest above the market and make it difficult/unlikely to transition into a new uptrend at this time. Overall conditions remain ripe for a price flushing period ahead.
Barge Values: October= +65 Z
CZ: Support= 7.20-25, Resistance= 7.45-50
**PROFILE: Dec Corn> 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= 15.05, Resistance= 15.55
SMZ: Support= 455, Resistance= 480-85
BOZ: Support= 49.50, Resistance= 51.30
**PROFILE: Jan Soybeans> Strength today is a selling opportunity. 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> Four consecutive lower closes. 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.