***NOTICE - there will not be comments tomorrow through Thursday as I will be traveling and in meetings. If you have a specific question email me.***
CORN - July ‘09 Electronic
Open - $4.20, High - $4.25, Low - $4.13, Close - $4.21 1/4 Up $.00 1/4.
Thoughts - Long Term (Into September ‘09) - Bullish/Higher
Thursday I said: “As the market made new highs today I was stopped out of some short futures protecting equity in my long June ‘09 $3.80 call options. If the market manages to close above $4.17 1/2 tomorrow then it could open the gates to search out the old $4.49 high we had in December 2008. If we don’t manage to close above $4.17 1/2 in the next couple days then we should make a retracement back toward the $3.95 to $3.89 area. We had good volume days during the markets up swing last week but have had lower volume during this week’s trade when the market was chopping around. I believe the corn market is near a crucial area of a possible breakout to the upside but we need to close above $4.17 1/2 first before I am comfortable saying it. The marketplace is still talking about wet weather but I don’t see that being an issue at the moment, I think money is just coming back in the market holding this market up.”
July ‘09 corn: I said last week if we close the July '09 futures above $4.17 1/2 that we would have a shot at testing the $4.49 high that we made in December 2008; I am still on track with that thought. The market had early strength considering that the overnight was as low as it was and I think the strength that we gained during today's day session will follow through to tomorrow's trade. We do have a monthly USDA crop production report out tomorrow morning which should provide some direction but I don't feel as if it is going to have much influence on the market. Weather remains to be an issue and as each day passes the likely-hood of a bumper crop go with it as far as the trade is concerned. One thing I have learned over the years is never count a crop out until harvest is complete! I am looking for an early low tomorrow and then follow through higher as the day progresses and holding $4.17 1/2 as support.
The daily chart did show a sign of warning if you are long, it IS NOT a sell signal it is just a warning to be cautious and look for signs but I think it will be a false warning in my opinion.
Bottom line: I am looking for the market to experience an early low and a late high tomorrow but if there are any major surprises in the monthly USDA crop production report we could move in the direction of the surprise.
July ‘09 Corn - Support/Resistance for 05-12-09
(R3) Resistance 3: $4.38
(R2) Resistance 2: $4.31 1/4
(R1) Resistance 1: $4.25
Today’s close: $4.21 1/4
(S1) Support 1: $4.18 1/4
(S2) Support 2: $4.17 1/4
(S3) Support 3: $4.16 1/4
MEAL - July ‘09 Electronic
Open - $341.50, High - $345.00, Low - $335.10, Close - $344.40 Up $2.90
Thoughts - Long Term (Into September ‘09) - Bullish/Higher
Thursday I said: “I look at the daily chart and the first thing I see right now is a small double top in the July ‘09 contract. I still have $330.00 June ‘09 put options in place to buy futures against if the market gets low enough but it hasn’t gotten to a point where I am extremely comfortable buying just yet. I am not an immediate bull up at these levels especially now with this little double top going on. I am looking for continued weakness tomorrow as we follow through from today’s mid/late session sell off. There is a good chance we could test $332.40 at some point in the near future.”
July ‘09 meal: As I look at the July '09 meal chart it almost looks like the market is waiting for some news to take off again. Last week's action was un-impressive at best from a bullish perspective closing $.40 below where it opened on the week; this type of action warrants selling below last week's low of $337.50 which we have already breached. Even though the $337.50 has been breached it did come in the overnight session where volume isn't great as it is during the day session. It looks to me like tomorrow is going to be more of the same sideways to higher with an early low and a late high. We have the USDA monthly crop production report out in the morning and the trade has been leaning toward more soybean acres being planted due to wet weather for corn plantings which would be negative to the soybean complex and its prices.
Bottom line: I’m looking for the market to experience an early low tomorrow and a late high. 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 05-12-09
(R3) Resistance 3: $350.90
(R2) Resistance 2: $346.60
(R1) Resistance 1: $344.90
Today’s close: $344.40
(S1) Support 1: $343.00
(S2) Support 2: $339.10
(S3) Support 3: $335.10
HOGS - June ‘09 GLOBEX
Open - $68.30, High - $68.55, Low - $67.60, Close - $67.775 Down $.425
Thoughts - Long Term (Into August) - Friendly
Thursday I said: “I continue to believe there will be strength in this June ‘09 contract as the market/industry recovers from the H1N1 flu stories that have plagued the news headlines and caused panic across the globe. As I have said I have a cycle indicator that bottomed out at the end of last week thus far it has been right as we see the market continuing its climb higher with the exception of the break we took today. Cash was much higher this afternoon compared to what the noon report showed and cutout was up $1.64 so we are seeing renewed demand for hogs and product. I fully expect hogs to keep trying to move higher tomorrow with positive cash and cutout information released this afternoon.
I do have to mention that there is a possible sell signal IF and only IF the June ‘09 contract makes new highs above $67.35 and then drops back below it tomorrow. The signal would be to sell June ‘09 hogs at $67.10 on a sell STOP and if the stop is filled then a risk management stop would be placed $.25 above the most recent high at the time of the fill. I don’t believe I will execute on this trade if it does materialize but I MAY change my mind and wanted you to be aware of what to expect if the market meets this criteria tomorrow.”
June ‘09 hogs: I mentioned a sell signal at $67.35 on a stop in my last posting but the market never made it to that level therefore the signal was false and even if the order was placed it wouldn't have been filled anyway. The cutout number took rest today as it was down $.32 for the day after a nice run higher last week. The intra-day charts show the June '09 contract trading lower early tomorrow and then catching some support probably around the $67.42 to $67.15 area. I still have a cycle high projection around May 22nd and with the positive weekly close we had on the charts Friday I don't want to press the market lower at this point. We are still recovering from the H1N1 garbage that sank the market two weeks ago and we are still due for some recovery in my book.
I will continue to look for a move back toward $71.50 to fill the gap we left prior to the H1N1 flu media blitz before I get too crazy about the idea of selling futures. I have $68.00 and $69.00 call options in place to sell against in the event the market looks sick and decides to turn but for now I will refrain and look for a better opportunity to hedge.
Bottom line: I’m looking for the market to make an early high tomorrow and then make a late low.
June ‘09 Hogs - Support/Resistance for 05-12-09
(R3) Resistance 3: $68.95
(R2) Resistance 2: $68.65
(R1) Resistance 1: $68.05
Today’s close: $67.775
(S1) Support 1: $67.425
(S2) Support 2: $67.15
(S3) Support 3: $66.20
Click here to view cash and cutout reports
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.