CORN - July ‘09 Electronic
Open - $4.05 3/4, High - $4.09 3/4, Low - $3.96 1/2, Close - $4.05 1/4 Down $.00 1/4.
Thoughts - Long Term (Into September ‘09) - Bullish/Higher
Yesterday I said: “I haven’t posted comments for a few days but as you can see by what I said Wednesday (above) that we are still in the line with those thoughts. We tried to test $4.17 1/2 today but failed to get there as we only made it to $4.13 3/4 and $4.15 3/4 on Friday. The July ‘09 contract struggled today came off of its low price as the market was closing but still not enough to make me think we will get upside momentum going for tomorrow. It is my opinion that we will see the market open slightly higher tonight and then find some early resistance and weaken into tomorrow’s day session. I am expecting the market to have an early high and a late low tomorrow.”
July ‘09 corn: I said yesterday we would have a possible test of $3.96 1/2, which was our low for the day, but I expected it later in the session but instead it happened very early in the day. Some of the projected rainfall that the Midwest is supposed to get is moving south out of the key area planting areas which should allow for further planting progress to be made. It is so hard to trade the bullish side of a "not getting planted" story anymore because of the technology we have to get the crop in as well as the genetics of the crops themselves to grow in almost any condition. I really don't care much about it at all other than to sell when there is good premium in the market based off of this "scare".
I am looking for corn to have a tad bit more downside tonight and early tomorrow but then should be it in the VERY SHORT-TERM (Wednesday/Thursday). I think we still have downside potential into the middle of May and then we start to trade sideways until we get our next big "scare" of weather. I believe the market is toppy at these levels and I wouldn't want to chase it here, if you NEED upside protection do it in the form of a known risk option strategy, I wouldn't flat out own futures at this level without downside protection.
Bottom line: I am looking for the market to experience an early low and a late high tomorrow.
July ‘09 Corn - Support/Resistance for 05-06-09
(R3) Resistance 3: $4.13 3/4
(R2) Resistance 2: $4.09 3/4
(R1) Resistance 1: $4.07 1/4
Today’s close: $4.05 1/4
(S1) Support 1: $4.03 1/4
(S2) Support 2: $4.01 1/2
(S3) Support 3: $3.96 1/2
MEAL - July ‘09 Electronic
Open - $344.40, High - $348.4.30, Low - $340.50, Close - $345.00 Up $.20
Thoughts - Long Term (Into September ‘09) - Bullish/Higher
Yesterday I said: “I have been out of meal since last Thursday’s open around $323.10 but like I said I didn’t want to press ownership at these levels. The close today was nothing to write home about as we had a nice range and but actually managed to close in the top half of the range. I am still not a big fan of owning meal at these levels and I will wait for a pull back in the market if I can before re-establishing aggressive ownership. I have $330.00 June ‘09 puts in place as of today to buy against in the event the market dips to near these levels in the July ‘09. I spoke of $337.20 as resistance last week and now it becomes support, the market needs to hold this level if it wants to keep moving higher.”
July ‘09 meal: First I would like to apologize for not updating the Open, High, Low and Close yesterday for meal, the prices that were entered were from last Wednesday. Similar to corn I believe in the very short-term we will experience some more minor downside pressure yet this evening and early tomorrow but from there we can see a pop in the market. The July '09 contract had an inside day today which typically means we should move in the direction of a break out tomorrow. The break out should either take out today's high or low and the market should look to move in that direction. I still don't want to chase this market and be aggressively long up here via straight long futures but I do want to have some coverage in place via a known risk strategy. I currently have $330.00 June '09 put options in place to buy against if we get a downward movement in the market. We have yet to get anything significant to the downside for me to buy futures to complete my strategy. I will be looking for opportunities as we move forward and will be paying close attention early tomorrow morning.
Bottom line: I’m looking for the market to experience an early low tomorrow and a late high tomorrow. I am still skeptical of the market at these levels but it's stubborn as prices stay inflated for now.
May ‘09 Meal - Support/Resistance for 05-06-09
(R3) Resistance 3: $350.70
(R2) Resistance 2: $347.80
(R1) Resistance 1: $345.70
Today’s close: $345.00
(S1) Support 1: $340.90
(S2) Support 2: $337.60
(S3) Support 3: $332.30
HOGS - June ‘09 GLOBEX
Open - $63.50, High - $65.075, Low - $63.40, Close - $64.80 Up $1.025
Thoughts - Long Term (Into August) - Friendly
Yesterday I said: “I spoke with my local meat packer yesterday as I BOUGHT PORK for a cook out and I asked him if he has seen a setback in pork sales ever since the H1N1 flu story broke and he shook his head and said not at all. They actually featured some pork products last week and resulted in what he labeled as a success. This made me think as I got into the office this morning so I pulled all of the loads that the USDA reports on the cutout report and made a weekly tally for each week going back to January 1st 2008.
As you can tell by the chart we haven’t experienced a major drop off in the loads of product that the USDA reports on a daily basis. So what does all of this mean you ask? I don’t know but it makes me question the severity of the ACTUAL situation not the propaganda version that we read and hear about. I think this is a nice vehicle for packers to use in driving down the cost of hogs and it has been working quite nicely thus far. We closed just below our contract low of $63.80 and if we don’t get back above this level tomorrow for a close then it would suggest another leg lower from here.”
June ‘09 hogs: As stated yesterday we did have an early low today, coming in the first hour of trade and the high was near midsession although I thought we would make a high late in the session today. The June '09 contract found good support today even though we did make a new contract low by .075 today and the cutout was down over $1.00 last night. Again if you refer to my chart above it makes you wonder about the longevity of this flu story and how long those that want to suppress the market can actually keep it suppressed. As I review the hourly chart today to give some direction for tomorrow, it seems we should have continued upside in the June '09 contract.
The June '09 contract came close to having a bullish reversal day today but failed to close above yesterday's high of $65.075. I had my cycle low last Friday in the June '09 contract and now it shows a sideways to higher movement into the middle of May 2009. Okay, the cutout report just came out and confirms (to me anyway) my thought of bogus fears in the hog product. The cutout was up $1.34 on 238 loads and the most loads we have had on any given day since January 1st 2008 is 183 so now you tell me who is not eating pork and where did all the demand go because of the H1N1 outbreak. The extended hour's trade is currently up $1.82 which is .80 higher than where we closed the pit today. Cash was still lower today but this gives packers good margins again and if hogs don't come to town they will have profits to go bidding but as well all know sometimes logic doesn't prevail.
Bottom line: I’m looking for the market to make an early low tomorrow and then make a late high. The cutout number was probably factored in to some degree today but it is still a friendly development as far as I am concerned.
June ‘09 Hogs - Support/Resistance for 05-06-09
(R3) Resistance 3: $66.82
(R2) Resistance 2: $66.47
(R1) Resistance 1: $65.75
Today’s close: $64.80
(S1) Support 1: $64.50
(S2) Support 2: $63.40
(S3) Support 3: N/A
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