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CORN – Dec ‘09 Electronic
Open – $3.82, High – $3.83, Low – $3.68 1/2, Close – $3.73 Down $.10
Thoughts – Long Term (into December ‘09) – Sideways
Dec ‘09: It looks like the cycle high for corn is in play based on today's action. The old support number of $3.76 failed to hold today which makes me think we could see another test of lower prices. The market tried several times today to get back above $3.76 but failed to have an hourly close above that level. If the market opens steady to higher tonight this is a good setup for follow through selling during tomorrow's trade. A likely target area to test is $3.61 3/4 which is Monday's low, however, the cycles project lower price movement into Thanksgiving.
As I said in a recent post, we exited some of our in the money call spreads to take the equity off the table. We still have an at the money call spread in place to give us some upside protection but we are not at a level where I want to be very aggressive in owning corn. If we break back to the $3.45 area then we may look a more aggressive approach for protecting corn but not right now. I said in my last post that I was reluctantly friendly to the corn market because it closed two days over $3.76, we have now breached that support level and tomorrow should give us more insight to market direction. My gut says lower from here based on how fast we came up and we still have harvest to get through.
Bottom line: I am looking for the market to experience an early low tomorrow.
Dec ‘09 Corn – Support/Resistance for 10-16-09
(R3) Resistance 3: $4.03 3/4
(R2) Resistance 2: $3.89 1/4
(R1) Resistance 1: $3.81 1/4
Today’s close: $3.73
(S1) Support 1: $3.66 3/4
(S2) Support 2: $3.60 1/4
(S3) Support 3: $3.45 4/5
MEAL – Dec ‘09 Electronic
Open – $305.20, High – $306.50, Low – $293.00, Close – $296.20 Down $9.50
Thoughts – Long Term (into November ‘09) – Sideways/Higher
Dec ‘09 meal: Not much has changed since my last post, it looked then like the market was getting overdone to the upside and today we say the downward movement that I was expecting to come at some point. Again, I am still friendly to the meal market from a longer-term perspective but I think we needed a break in here to let everyone catch their breath. We will remain protected with a call spread until we get to a point on the chart that says we should be more aggressive. I will look to the $283.5 to $288.90 area for support and for the Dec '09 meal to take a breath at that level before deciding if it wants to move lower or march higher again.
Bottom line: I’m looking for the market to experience an early low and late high tomorrow.
Dec ‘09 Meal – Support/Resistance for 10-16-09
(R3) Resistance 3: $316.20
(R2) Resistance 2: $312.00
(R1) Resistance 1: $304.10
Today’s close: $296.20
(S1) Support 1: $290.60
(S2) Support 2: $285.00
(S3) Support 3: $276.20
HOGS – Dec ‘09 GLOBEX
Open – $54.55, High – $54.725, Low – $53.775, Close – $54.475 Up $.225
Thoughts – Long Term (into December) – Negative
Dec ‘09 hogs: Dec hogs continue to have a firm feel to them, however, the open to close ranges have gotten considerably smaller over the recent day's which suggests the market is running out of steam. Two of the last three days have give out warning signals that the market may be coming to an end and today was the second of the two days mentioned. We continue to be hedged but we have $52.00 Dec calls in place to provide upside in this market.
As I've stated for some time now, I think this is an excellent time to get some downside protection in place on hogs that need to be hedged. I would use a known risk strategy because we do have the funds involved in the market and that could push us higher from here but when the buying is done I don't know if we have enough fundamental backing to support the Dec contract at these levels.
Bottom line: I’m looking for the market to make an early high tomorrow.
Dec ‘09 Hogs – Support/Resistance for 10-16-09
(R3) Resistance 3: $56.30
(R2) Resistance 2: $55.35
(R1) Resistance 1: $55.00
Today’s close: $54.475
(S1) Support 1: $54.05
(S2) Support 2: $54.45
(S3) Support 3: $52.50
(S4) Support 4: N/A
(S5) Support 5: N/A
(S6) Support 5: N/A
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