by Duane Lowry
Wednesday, January 9, 2013
SUNRISE OUTLOOK OVERVIEW:
At 6.28 am> Grain/Soy Snapshots: Corn= 1/4 higher, Wheat= 1 3/4 higher, Soybeans= 1 higher.
Day Session Expectations vs Night Session Tone:
March Corn: Support= $6.75-78, Resistance= $6.95
*? Awaiting Friday.
March Soybeans: Support= $13.70, Resistance= $13.95-99
*? Awaiting Friday.
March Wheat: Support= $7.40-45, Resistance= $7.75
*? Awaiting Friday.
Outside Market Influences:
At 6:26 am> Price Snapshots: Crude was down $0.11, Gold was down $2.70, Dow Index was up 18 and the US $ was up 22
*Crude and the Dow Index have quickly diminishing upside potential from current levels and may be poised for a very significant decline during the next 30-90 days. Any short-term strength in those two markets is likely to lack the ability to build sustainable upside follow-through.
*Friday USDA will issue monthly S&D, final 2012 production and winter wheat acreage data.
*Winter Wheat Acreage estimates:
All Winter Wheat= 42.6 mil avg, range= 41.7-44.7, 2012= 41.3
Hard Red Winter= 30.3 avg, range= 29.9-31.0, 2012= 29.9
Soft Red Winter= 8.9 avg, range= 8.2-10.0, 2012= 8.1
White Winter= 3.5 avg, range= 3.3-3.9, 2012= 3.3
*2012 Corn and Soybean Production estimates:
Corn= 10.626 bil bushels avg, range= 10.100-10.801, Last Month= 10.725, 2011= 12.358
Soybeans= 2.999 avg, range= 2.922-3.104, Last Month= 2.971, 2011= 3.094
*2012 Yield estimates:
Corn= 122.4 avg, range= 121.0-123.4, Last Month= 122.3, 2011= 147.2
Soybeans= 39.6 avg, range= 38.6-41.0, Last Month= 39.3, 2011= 41.9
*2012/13 Carryout estimates:
Corn= 667 avg, range= 489-764, Last Month= 647
Soybeans= 135 mil avg, range= 107-178, Last Month= 130
Wheat= 743 mil avg, range= 637-792, Last Month= 754
*Quarterly Stocks estimates:
Corn= 8.210 avg, range= 8.050-8.450, Year-ago= 9.647
Soybeans= 1.984 avg, range= 1.915-2.056, Year-ago= 2.370
Wheat= 1.674 avg, range= 1.553-1.721, Year-ago= 1.663
Weather offers precip for the US Plains, favoring southern and eastern areas, amid a generally warming temperature theme through the next two weeks. South America's forecasts are wetter, with improved moisture for parts of Argentina and northeastern Brazil.
Wheat has little for new news. Global buying interest is becoming more active. Fundamental conditions are very favorable for old-crop US wheat, as global pricing structures should drive business to US shores. Technical conditions suggest little ability to build downside energy below current lows and offer significant upside potential, favoring old-crop futures. We await Friday's USDA data, with the trade already discounting most plausible bearish scenarios.
Corn has little for new news. US corn prices are competitive in the global arena and buyer interest is on the rise. Traders are focused on Friday's reports, already preparing for and having discounted non-bullish scenarios. Trader sentiment is discouraged and lack confidence in bullish positioning. Technical conditions are not conducive to building downside energy below recent lows. Any jab of that level should not be embraced.
Soybeans have little for new news. South American weather spin is bearish, but largely discounted. Trader sentiment is quite bearish, fearing large South American supplies will trump any bullish slant to US supply storylines. Technical conditions are not conducive to sustaining any probe of recent lows.
In summary, traders have little confidence or conviction about Friday's USDA reports. Erratic price action is likely to continue as traders await Friday's reports and enter these reports with most traders seeking neutrality.
Barge Values: January= +61 H
CH: Support= 6.75-78, Resistance= 7.20-25
**PROFILE: March Corn> Conditions are not conducive to building downside energy below recent lows. Significant price recovery is ahead during the next 60 days.
Barge Values: January= +94 F
SH: Support= 13.65-70, Resistance= 14.15
SMH: Support= 398-400, Resistance= 430
BOH: Support= 49.50, Resistance= 52.00
**PROFILE: March Soybeans> Trader sentiment is quite bearish. IN SUMMARY, Expect sloppy trade into Friday's report. Any test/probe of recent lows will lack ability to build sustainable downside follow-through.
Barge SRW Values: January= +80 H
WH: Support= 7.35-45, Resistance= 7.75
**PROFILE: Chicago March Wheat> Trade below $7.45 offers little sustainable downside potential. Overall conditions suggest significant strength in the weeks ahead, led by old-crop.
GLOBAL HIGHLIGHTS & HEADLINES: Brazil's Conab projects record 82.68 mmt soybean production. Unemployment in the 17 countries that use the euro rose to 11.8%, the highest since the euro was founded in 1999. Germany reported industrial orders fell more than expected, as did their exports.
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.