So much for the honeymoon!
Nov 05, 2008
So much for an Obama honeymoon for the financials and commodities, the stock market was off 300 plus, oil was down $5.18. This forced selling pressure into the commodity sector from the opening bell. Soybeans closed 54 lower and corn 213/4. While not at the old lows, it is very near.
The issue now at hand is whether this simply a retest of the old lows or a resumptions of a much more bearish situation. My bias continues to be that some corn harvest pressure could still persist for another 2 weeks but much of the bean selling pressure due to harvest is done. I really want to argue that December corn below $3.90 is at value and Novembers beans below $8.75 is at value as well.
The only “if” comment I will leave you with is now that the elections are done, the media will focus more aggressively on the economy. They could potentially over blow the bearish numbers that are due to be coming out over the next few months. This could in affect cast a very bearish shadow over the corn, beans and wheat market in regard to the domestic and global demand outlook.
In summary: I have to suggest all feed buyers should be getting very aggressive with a scale down buying program. I would move back to 100% purchased position when we see a solid technical close above the long term moving averages and overhead resistance.
Bottom line: The only reason the ag commodities will make new lows is if the stocks and oil take a big break from the current levels.
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