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CORN - May '09 Electronic
Open - $3.65 3/4, High - $3.70, Low - $3.64 3/4, Close - $3.65 1/2 Up $.04
Due to time constraints today my comments will be short and sweet but the balance of the week looks good for posting comments. I don't have anything to review from Friday because I didn't have any comments therefore I will start from scratch today. There has been small volume in May '09 corn over the last few sessions which leads me to believe there isn't much behind this little rally we are getting. I am not suggesting you sell everything in sight all I mean is I think we could see another correction lower prior to making new highs above $3.80 1/2.
I exited long futures last week on Wednesday I believe and I am look for a place to re-own futures against my long $3.60 April puts to turn them into calls. I am not a big fan of flat out ownership of corn at this point until I see better indications of a bottom from the chart. We are still using the downtrend line from the January high as resistance. We need to close above that level ($3.68) for a few days for me to get excited about an upside move.
Bottom line - I am looking for May '09 corn to open unchanged to lower tonight based on follow through from the close today. I see support at $3.64, $3.62 1/2 and then $3.58, I see resistance at $3.67 then $3.70. I am expecting early follow through weakness tonight and MAYBE tomorrow morning but I am looking for an early low and a late high tomorrow. We need a close above $3.68 to gain more strength for a run at the upside but for now I believe selling will surface just below today's low.
MEAL - May '09 Electronic
Open - $267.70, High - $270.50, Low - $264.80, Close - $265.00 Down $.30
May '09 meal had a relatively quiet day and closing near unchanged. Looking at the intra-day charts I feel we could see unchanged to lower tonight as the market opens. I believe we will test $264.50 and POSSIBLY $263.10 before finding support. I look for May '09 meal to have an early low and a late high during tomorrow's trade similar to corn.
Bottom line - I am looking for an early low and late high tomorrow with support at $264.50 and $263.10 and resistance to be $267.50 and $270.50. I am still in the camp of soybean meal looking for a bottom therefore I have call options in place to give us upside protection in the event of a rally. I want upside protection at these levels but I want known risk thus the use of options.
HOGS - June '09 GLOBEX
Open - $73.15, High - $74.30, Low - $72.95, Close - $73.20 Down $.525
June '09 hogs moved higher right after the open of trade today. I sold hogs on Wednesday or Thursday of last week around $73.05 for a hedge based on the way the market looks and feels at this point. I am not ruling out the fact that we can't move higher at some point but I think we need a setback first. The packer margin is awfully red so something needs to happen, either cash come down or cutout comes up. So far the cutout isn't doing its part to solve the margin problem. The assumptions I make about packer margins are based on information I have and is not from the packers themselves therefore I can't guarantee its accuracy.
I am looking for continued weakness tomorrow based on how the charts look. The last commentary I had last week said I was looking for hogs to have a downside reversal on Thursday which was on target in the morning but closed higher on the day. I am standing by my comments and continue to believe we should see a setback in the June '09 hogs before going much higher.
Bottom line - I am looking for the June '09 hogs to test $72.37 with an ultimate test of $71.90. If we close below $71.90 for a couple of days then I would expect a test of $71.30 to $69.55 area. I see June '09 trading lower tomorrow in the early stages of the day and possibly finding support later in the session however I think any rally we have tomorrow will be sold by professional traders. I don't like the market here unless we start to see big moves to the upside in the cutout numbers. Support for tomorrow is $72.37 and $71.90 where resistance is at $73.60, $73.77 and then $74.30 although I don't think it is likely we will see the topside of resistance tomorrow. Today looked pretty ugly on the charts (in my opinion).
I had to post these comments prior to the cash and cutout information release by the USDA this afternoon, my apologies. Below are the links to the USDA site to get this information.
Hurley & Associates believes positions are unique to each person’s risk bearing ability; marketing strategy; and crop conditions, therefore we give no blanket recommendations. The risk of loss in trading commodities can be substantial, therefore, carefully consider whether such trading is suitable for you in light of your financial condition. NFA Rules require us to advise you that past performance is not indicative of future results, and there is no guarantee that your trading experience will be similar to the past performance.