Johnston Pro Farmer Senior Markets Editor
as of 7:00 a.m. CT
CCI violates support...
Yesterday, the Continuous Commodity Index (CCI) posted its first close
below the 450.00-point level since November 2007 and violated uptrending support
drawn off 2005 and 2007 reaction lows. This is not a positive sign, as it signals
the potential for more commodity selling.
were largely behind Thursday's losses. The dollar was sharply higher -- moving
above the September high -- while crude oil and gold were sharply lower. This,
as well as economic uncertainty, resulted in a bearish environment in the grain
and livestock markets and spurred widespread commodity liquidation
your comments coming. Always good to have conversation with you and input
on what you'd like to talk about. E-mail
your comments/question to me by clicking here. Please include your location.
Opening calls. These calls originate
more than three hours before the open -- use caution, things change::
Corn: 1 to 3 cents higher. Futures saw light short-covering overnight.
Futures closed 27 1/2 cents lower to their 30-cent limit lower on sharp pressure
from widespread commodity liquidation. Daily trading limits are expanded to 45
cents today. March corn futures gapped lower on the open and closed limit lower
to violate support and post a fresh yearly low. Next support lies at the November
2007 high of $4.41 1/2. To the upside, resistance lies within today's gap area
between $4.97 and $5.02 1/2.
Soybeans: 3 to 5 cents lower. Futures
were weaker overnight despite light gains in the crude oil market. Futures gapped
lower on yesterday's open and sharply extended losses to finish 49 to 51 1/4 cents
lower. Futures were pressured by outside markets. January soybeans gapped to a
fresh weekly low and extended losses. Next support lies at the December low of
Wheat: Mixed. Futures were 2 cents lower to
2 cents higher overnight. Chicago wheat closed 31 1/2 to 35 1/2 cents lower yesterday
on sharp spillover from outside markets. Traders are growing increasingly concerned
about the rising dollar, which means increased competition for our share of exports.
December Chicago wheat gapped lower on the open and sharply extended losses to
penetrate support at September 4, 2007, high of $6.40.
cattle expectations: $2 to $3 lower. Cash cattle trade turned active
at $96 to $97 prices Thursday -- $2 to $3 lower than the bulk of last week's trade.
Feedlots moved cattle at lower prices after cattle futures dropped sharply Thursday
morning. Cash sources say there are some light cleanup sales left today, although
those supplies could be carried into next week.
call: Weaker. I'm more inclined to call cattle weaker based on spillover pressure.
But October futures moved to a discount to cash trade yesterday. December live
cattle gapped lower on yesterday's open and violated support at the November 2007
low of $97.55, but closed above that support. Contract-low support lies at $96.90.
If traders view this week's losses as overdone, some short-covering support may
surface to finish the week.
hog expectations: Steady to weaker. Pork cutting margins turned negative
Thursday, but thanks to lower cash hog bids and a modest 29 cent rise in pork
cutout value yesterday, are back just above breakeven. While packers are estimated
to be making a little money on each hog killed, there's no incentive to increase
cash hog bids are market-ready supplies are hefty.
call: Mixed. Heck, I don't know if we should be calling lean hog futures
higher on short-covering or weaker on spillover pressure. But their ability to
move off session lows yesterday signals the potential for short-covering this
morning. But it's not arguable the attitude is bearish in the hog market.