Hog & Corn Comments 04/23/09 - Cutout gains ground and what is corn afraid of?

Published on: 17:30PM Apr 23, 2009

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CORN - May ‘09 Electronic
Open - $3.73 1/2, High - $3.81 3/4, Low - $3.69 1/2, Close - $3.81 Up $.07 1/2.

Thoughts - Long Term (6 months) - Bullish/Higher
Yesterday I said: $3.76 seems to be the golden number that May ‘09 corn can’t seem to get through and close above.  May is range bound between the 50% and 62% retracement level back to the early March ‘09 low.  As I have said in some of my more recent posts I have a cycle low due near the 29th of April and I will hold a skeptical attitude toward corn until then and review then.  I am still looking to buy corn at $3.67 1/2 if I can.

May ‘09 corn: We managed to get our close above $3.76 today but I don't think there is much left in the tank for corn to keep rallying.  I need to see tomorrow close above $3.76 as well to make sure today wasn't a fluke which I believe it was.  There wasn't much volume today; if this bounce is based on planting fears then I believe you sell into this rally.  I am still friendly longer-term but I believe we should make another run at $3.65-$3.67 before we move higher.  I think a good day trade would have been selling the close today or anything above $3.82 tonight and have a buy stop at $3.88; this thought is an observation only, not a recommendation. 

Bottom line: I am looking for the market to experience an early high and a late low tomorrow.  As I said I will continue to try and buy May ‘09 corn around $3.67 1/2.

May ‘09 Corn - Support/Resistance for 04-24-09
(R3) Resistance 3: $3.91 3/4
(R2) Resistance 2: $3.87
(R1) Resistance 1: $3.83 1/4
Today’s close: $3.81
(S1) Support 1: $3.78 3/4
(S2) Support 2: $3.75 1/2
(S3) Support 3: $3.74

MEAL - May ‘09 Electronic
Open - $328.80, High - $340.00, Low - $324.40, Close - $324.90 Down $4.90
Thoughts - Long Term (6 months) - Bullish/Higher
I said: I am surprised May ‘09 meal did what it did today; we sold off as the day was progressing but it came back strong into the close.  The overnight market set off an INTRA-DAY sell signal on the hourly chart (very short-term) at $328.20 with a protective buy stop at $330.50.  The important number to keep in mind right now is $326.00 as the market settled above it today and if it does again tomorrow then I would say a test of the most recent high of $333.90 is likely.

May ‘09 meal: I see the high on May '09 meal show's $340.00 but I didn't see it touch there during the day and if I look at a one minute chart it says it did it in the first minute of trade.  The R3 number from yesterday was $341.00 so it is possible $340.00 was our high today, I just didn't see it.  If $340.00 was our high and not a bad tick ($340 is the high on CME.com) then I am not friendly soybean meal at all.  This would have been an awful close for the day.  I expect selling on stop orders below today's low of $324.40.

Bottom line: I’m looking for the market to experience an early high tonight and a late low tomorrow.

May ‘09 Meal - Support/Resistance for 04-24-09
(R3) Resistance 3: $334.60

(R2) Resistance 2: $329.10

(R1) Resistance 1: $326.50

Today’s close: $324.90
(S1) Support 1: $324.10

(S2) Support 2: $321.50

(S3) Support 3: $318.10


HOGS - June ‘09 GLOBEX
Open - $71.75, High - $72.15, Low - $71.25, Close - $71.875 Down $.50
Thoughts - Long Term
(6 months) - Friendly
Yesterday I said: I am still looking for that close below $72.175 which looks like it should come tomorrow and then I would be looking for a test of $70.525.  My short-term target on June ‘09 hogs is $70.525 on gut feel but technically we need a couple of closes below $72.175.  I still have my cycle indicator saying we should stay weak into May 4th so I will remain hedged for now with my upside open until $80.00 if we should get that high.  Once we get closer to May 4th or reach some downside objectives ($69.525 in June ‘09) I may adjust my positions to become more of a bullish position meaning open the upside completely."

June ‘09 hogs: June '09 futures found support at my S2 number from yesterday of $71.35 but just couldn't muster enough momentum to reach my targeted area of $70.525.  I still believe we will test $70.525 at some point in the next week or so and if we do I will be looking to adjust my position to allow for more upside potential if the market decides to move higher.  For now I will remain hedged but the market is seeing buyers come into the market on these breaks.  We need to get back above $72.175 tomorrow if we want to try and rule out a test of $70.525.

Bottom line: I’m looking for the market to be higher tonight/tomorrow and experience an early low and a late high but I’m staying hedged for now. There could be some buy stops around $72.15 for tomorrow's trade session.

June ‘09 Hogs - Support/Resistance for 04-24-09
(R3) Resistance 3: $73.20
(R2) Resistance 2: $72.90
(R1) Resistance 1: $72.175
Today’s close: $71.875
(S1) Support 1: $71.70
(S2) Support 2: $71.25
(S3) Support 3: $70.525

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