Johnston Pro Farmer Senior Markets Editor
as of 7:00 a.m. CT
Watching wheat market
technicals... Technically, wheat futures are at a very important juncture
following Tuesday's violation of support levels. Yesterday, December Chicago wheat
returned back above the May low, but left the previous day's gap open. Support
lies at this week's low of $7.57, with resistance at the top of the gap at $7.98.
New-crop charts look similar. July Chicago wheat must avoid the January 11 gap
area at $7.98 to avoid the risk of hitting a round of sell stops.
On the monthly chart, key support levels are: May 2008 low of $7.31 and April
1996 high of $7.17. Violation of these support levels would reopen significant
Keep 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.
calls. These calls originate more than three hours before the open
-- use caution, things change::
Corn: 1 to 3 cents lower.
Futures were slightly lower overnight on a lack of fresh buying interest.
Futures came off lows into yesterday's close, finishing around 7 cents lower.
December corn futures hit sell stops on the drop through Tuesday's low, but stopped
1/4 cent shy of the psychological $5.50 mark. Wednesday's low at $5.50 1/4 is
initial support, with stronger support at the August low of $5.05. To the upside,
initial resistance is Tuesday's gap from $5.71 to $5.82. Strong resistance is
at the August high of $6.25.
Soybeans: Mixed, mostly weaker. Futures
were mixed overnight, although only the November contract was firmer -- trading
around 2 cents higher. Front-month September was 11 cents lower, but the rest
of the pit was mostly 1 to 4 cents lower. Futures closed mostly around 47 cents
lower yesterday, pressured by outside markets and hopes for rains in the eastern
Corn Belt. November beans spent the day pivoting around the $12.50 level to post
a slight downside day of trade on the charts. Key support lies at the August low
Wheat: 6 to 9 cents higher. Futures were
mostly around 9 cents higher overnight on spillover from yesterday's gains. After
a weaker start, futures closed firmer amid short-covering and fresh demand news.
News Egypt purchased 120,000 MT of U.S. SRW wheat resulted in some short-covering
support. Early pressure came on spillover from the previous day's sharp losses
and outside markets, as the dollar was stronger again yesterday. But as corn and
soybean futures extended early losses this morning, wheat began to find short-covering
support to avoid doing any more technical chart damage.
Cash cattle expectations: Watching
beef trade. Cash cattle markets remained inactive late Wednesday afternoon
and cash sources aren't expecting active trade until Friday. Most cash sources
feel prices will be steady to possibly firmer compared to last week's mostly $99
trade in the Plains. Post- holiday beef demand has been strong as packers moved
412 loads Wednesday.
Futures call: Weaker. Futures are
called lower based on expectations for spillover pressure. Losses intensified
on fund selling late yesterday. As futures dropped, sell stops were triggered
and the market slumped to a low-range close. That opens the door to potential
followthrough selling pressure this morning. A choppy tone could develop, however,
as traders wait on cash trade to develop.
hog expectations: Mixed. The pork cutout value was down another 74
cents Wednesday and has plunged more than $12 over the last week and nearly $16
the past two weeks. The sharp drop in pork values continues to cause concerns
with export demand, which has been a key price driver in the hog market. The cash
hog market is called mixed today, as some western Corn Belt plants are in need
Futures call: Weaker. Futures are called
to open lower based on spillover pressure from yesterday's losses. Pressure continues
to come from export concerns. There was no new export news developments yesterday,
but traders remain concern about export prospects declining. Nearbys saw the brunt
of the pressure. Possible firmness in the cash hog market today could result in