November Soybeans & December Corn Daily Numbers & Trade Ideas for 10/31/11
Nov 01, 2011
This report was sent to subscribers on 10/28/11 9:30 p.m. Chicago time to be used for trading on 10/31/11.
After the close recap on 10/31/11: My pivot acted as resistance and was 12.18, .00 3/4 from the actual high, and my support was 11.92, .01 1/2 from the actual low.
After the close recap on 10/31/11: My pivot acted as resistance and was 6.53 1/2, .02 1/2 from the actual high, and my support was 6.37 1/4 FG, .00 3/4 from the actual low.
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All charts and numbers for 11/1/11 have already been sent to subscribers at 4:40 pm.
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--------------12.18 ¼ Pivot
5 day chart... Up from last week same day
Daily chart .... Down
Weekly chart ... Sideways
Monthly chart Up $13.37 is the 200 DMA
ATR 29 Oversold 26%
For 10/31/11: I continue to say "Downtrend line is resistance, daily numbers support". Notice how it was resistance the last 6 days.
In my daily soybean numbers on Friday; my resistance was .04 (pivot was .01 ¼ in open outcry) from the actual high; my support was .04 ¾ from the actual low.
-----------6.53 ½ Pivot & 200 day moving average
6.37 ¼ FG
5 day chart.... Up from last week same day
Daily chart ...... Down
Weekly chart .......Sideways
Monthly chart .... Sideways 6.51 ½ is the 200 DMA
ATR 18 Balanced 70%
Downtrend line is resistance, and the uptrend line near $6.30 is support and then $6.22.
In my daily corn numbers on Friday; my resistance was .04 ¾ from the actual high; my pivot acted as support and was .04 ¼ (.03 ½ in open outcry) from the actual low.
Grains: Spot on grain numbers. Corn posted its highest close in over a month which is friendly, and now is in position to retest the $6.66 ¼ resistance. The downtrend line just above there at $6.76 will also be strong resistance for the bulls to overcome. I want to take the sell signals there for a longer term trade idea, and would have a buy stop above the gap at $6.85 ¾ to protect the idea. The uptrend line at $6.30 has been strong support the last 2 weeks.
Funds have been buying corn adding 29,200 contracts in the week ending 10/25. Maybe they will hold on into the November production report on the 9th, but I do think they will be exiting the December contract in the second half of the month to avoid delivery, and that will weigh on prices. The two downside risks to corn is higher production numbers on the November report, and if soybean prices collapse taking corn with it.
Funds bought 7,000 contracts of corn and sold 7,000 soybean contracts on Friday, and was reflected by the way they closed. I still think we are range bound with the parameters I have outlined, but if soybeans close below $12.10, the door is open to retest the low of October at $11.52. There is a gap below there on the weekly continuation chart at $11.35, but if that goes there is not much support until $10. Soybeans cash basis does not enjoy the basis that corn has right now, and soybean exports really are dismal. Funds did liquidate 7,400 contracts in the week that ended 10/25, and the most bearish scenario I want you and especially producers to know is, if production numbers come in unchanged, and SA gets a good start to their soybean crop and has good weather forecasts, soybeans could go to $10, and that would certainly have an impact on corn too. Consider this, the funds could abandon the rest of their long position and actually "go short". I do not know what will occur, but I said what could occur, and that allows me to have the "unimaginable" baked into the strike prices I choose. I would expect it will hold $11.35 until more is known. No matter speculator or producer, I never want you to "think" your way into a loss that is beyond reason. Stay ahead of your protection and remember markets can and will do anything, so try and position yourself to take advantage of any rally the market can realize. Yes, I am bearish soybeans, and that does not bode well for corn either.
Today will be first notice day in November soybeans, end of the month book squaring, and my producers cannot be "tricked" from what is "said" out there anymore, and will be "treated" if the market can rally for any reason. I want to continue to trade the numbers today without bias and risk $.06 in corn and $.07 in soybeans using a stop to protect any idea.
Grains: Spot on grain numbers! Does it matter to you why the market moved today if you had a profitable trade idea? I have no idea if soybeans will go up $.30 and test the high end of the trading range I have outlined, or go down $.30 and retest the solid support this week at $12.10 (tested 3 of 4 days this week). It really does not matter if soybeans can rally for whatever the reason; all my producers will make money no matter how bullish or bearish they are. This is the beauty of having a strategy that protects you for a known cost if the market goes down, yet allows you to make money if the market can go up. Even if you are a speculator, you can use this strategy except instead of actually owning the grain you produce, you would be long a futures contract.
Nothing has changed my outlook on the trading range for corn and soybeans, but the feature on Thursday was the EU decision and the confidence came back into all markets with renewed vigor. The dollar plunged which is also a key longer term in pricing commodities. So take advantage of price levels when at extremes especially if you have a fundamental opinion, and use a stop to protect the idea.
There has been a lot on buying in the December corn $7 calls which could precede the futures going there, but fundamentally and technically there is no need to do so. The pendulum would really need to swing to the extreme to do so. I am advising all my producers who are...Subscribe Now! ... would lock in more profits. My approach is based upon common sense and logic, and wants to be comfortable with what I do and in positions that can risk little and reward nicely when the number or chart formation holds.
How much can soybeans and corn rally with dismal exports, and soybeans have SA to compete with, carryout should be more than expected because the USDA looks like is overestimating exports. Production estimates in the November report will give further clues to this year's production (yield and harvested acres).
I want to continue to trade the numbers today without bias and risk $.06 in corn and $.07 in soybeans using a stop to protect any idea.
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