Hog & Corn Comments - 03-03-09 - Hogs find support and rebound.
Mar 03, 2009
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CORN - May '09 Electronic
Open - $3.49, High - $3.54 1/4, Low - $3.47 1/4 Close - $3.50 1/2 Up $.00 1/4
As a review of yesterday is said "I think it is safe to say we should see a test of today's low of $3.44 1/2 and then attempt to rally toward $3.50 3/4. Support for tomorrow in the May '09 contract is $3.44 1/2 then small support at $3.37 1/2 and resistance should be $3.50 3/4 then $3.52 1/4. I am looking for some turn around Tuesday action tomorrow."
The May '09 contract made it through the $3.52 1/4 upside resistance level I had penciled in for today and it was .02 3/4 above my support level of $3.44 1/2. I wish I had some magical news or chart formations to talk about today but I really don't. Today was pretty boring when it comes to the market, the Feds have been speaking in Washington D.C. all day and that has the Dow Jones both up and down depending on the comments that are being made. We did have an inside day today meaning today's low and high were both within yesterday's trade range.
Bottom line - I feel like we should continue to try and move higher tomorrow as we got very little of that accomplished today. I see today's high of $3.54 1/4 as a target area for tomorrow and then $3.58 in the May '09 contract. Overall I think we could be mixed tomorrow with the upside resistance areas being targets. Tomorrow's support is $3.48 1/4, $3.47 1/4 then $3.44 1/2. Tomorrow's resistance is $3.54 1/4 and then $3.57 1/4. I look for mixed to better trade tomorrow.
MEAL - May '09 Electronic
Open - $260.50, High - $265.70, Low - $259.90, Close - $264.70 Up $3.90
Yesterday I said "I see tomorrow having an early low and a late high looking for a turnaround Tuesday type action. Support is $259.50 then $255.30 and resistance is $263.90 then $265.20. I am looking for an early low and late high tomorrow but it all depends on how the Dow Jones reacts tomorrow."
My support and resistance points for today were relatively close to the mark, we were within $.40 on support and $.50 on the resistance side. The May '09 meal contract is still below the $265.20 level that would provide a test toward $270.90 if we managed to close above this level for a couple days. .
Bottom line - The market looks like we should have follow through to the upside tomorrow based on the way we traded today. I see support at $262.90, $262.20 and then $260.00 if we get moving to the downside. Resistance should be around $263.90 and then $265.70. One note to point out is if the May contract moves above $265.70 and then comes back down through it will trigger a sell signal at $265.20 on a stop. If the sold at $265.20 then a risk management buy stop order should be placed $1.00 above the most recent high. This is an observation not a recommendation
HOGS - April '09 GLOBEX
Open - $60.00, High - $61.325, Low - $60.00, Close - $60.85 Down $.575Reviewing yesterday's comments I said "I expect some recovery for the hog sector tomorrow along with the grains with projections of early lows and late highs. April '09 support for tomorrow is $59.825 then $59.55 and if we get bearish then $58.60, resistance is at $60.45 then $61.075-$61.275. June '09 support is $71.175 then $70.825 while resistance should be $71.925-$72.125 then $72.75. I don't think the high end of my resistance levels for either April '09 or June '09 is attainable tomorrow unless we get major rallies in other markets."
We got within $.20 of my first support level in April '09 and $.05 above my resistance level. In June '09 we got within $.175 of my first support level and within $.30 of my last resistance level. There was very little in the way of news today from a fundamental perspective. The market traded technically today as illustrated by my support and resistance points from yesterday.
Bottom line - We got a market close back above the $60.45 level which will open the door to a longer-term target of $64.00 provided the April '09 contract continues to close above $60.45. I am looking for mixed markets tomorrow but with a friendly feel, I can see both directions tomorrow. April '09 support is $60.65, 60.32 and resistance is 60.975, $61.32 then up to $64.00 (outside of limit range but is the next resistance level). June '09 support is $71.35, $71.125 and resistance is $72.12, $72.45 then $72.75.
I have an appointment this afternoon therefore I will not have any USDA information today.
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