Effingham Equity
FIRST LOOK, by Duane Lowry
Friday, September 3, 2010
OPENING CALL:
Corn= steady-better, Wheat= higher, Soybeans= higher.
*At 6:14 am> Night session results: Corn= 1/4 higher, Wheat= 8 3/4 higher, Soybeans= 7 1/2 higher.
*Informa will release their production estimates at 10:30 this morning.
*Where are we for the WEEK? Dec Wheat= up 18 3/4 cents; July Wheat= up 10 cents; Dec Corn= up 11 1/2 cents; Nov Soybeans= down 17 cents; Dec Soymeal= down $3.40; Dec Soyoil= down 60 points; Crude Oil= down $0.17; US $ Index= down 54 points; Gold= up $15.10; Dow Index= up 174 points.
*Markets are closed Sunday night and Monday, opening as usual Monday night.
Weather offers a mostly dry theme for the US Midwest and Delta during the next week.
Wheat will start higher on overnight gains. New news is limited. Chart appearance is encouraging buyers today, as they hope for an upside breakout of the past few weeks of consolidation. Technical conditions warn any upside probe could lack the ability to build sustainable upside energy. Overall conditions warn of further price erosion during the next several weeks.
Corn will lean better on default trader sentiment, awaiting Informa's latest production estimates at 10:30 this morning. Chatter about yield disappointment and embrace of such is building. Trader sentiment remains universally bullish. Traders see little downside risk and believe a rationing event needs to unfold, as well as an acreage battle storyline. Technical conditions warn of downside vulnerability, but the trade is not concerned. Producer selling interest does not exist.
Soybeans will start higher on difficult to explain overnight gains. Yield ideas here seem to be on the rise, but we haven't seen enough harvest data to know. Technical conditions should encourage selling interest on strength, but trader bullishness towards corn has so far been enough to consistently keep sellers away from the soybean market as well. Technical pressures to increase sales activity will escalate if/when this week's lows are violated. Selling in the soy-complex would also increase notably IF the corn market was to falter, but nobody is expecting that. Informa seemed to have the most pessimistic yield expectations last month for soybeans and traders are anxious to see their update this morning.
In summary, sharp overnight gains in the soy-complex is difficult to explain, but will be embraced by the trade this morning. Trader sentiment towards corn remains very bullish and embrace of low yield chatter is building. Informa's soybean production estimate will be watched closely, but it is difficult to imagine any corn estimate that changes traders' bullish enthusiasm or alters their views that corn yields will remain disappointing as harvest advances. There is a lot of focus in the outside markets on this morning's monthly employment situation report. At 6:12 this morning: Crude was down $0.48, Gold was up $1.00, Dow Index was down 2 and the US $ was down 7.
CORN:
Barge Values: September= +30 Z
CZ: Support= 4.05, Resistance= 4.47-50
**PROFILE: Dec Corn> Warnings of downside vulnerability exist. Trader sentiment remains universally bullish, with near complete disregard for downside risk.
SOYBEANS:
Barge Values: September= +62 X
SX: Support= 9.75, Resistance< /b>= 10.17-22
SMZ: Support= 280, Resistance= 297-99
BOZ: Support= 38.50, Resistance= 40.50-70
**PROFILE: November Soybeans> Overnight strength returns values to longer-term resistance levels. Trade below this week's lows will begin to accelerate selling energy. Significant downside potential exists during the next few months. IN SUMMARY, small intra-day recovery attempts should be searched for selling opportunities.
WHEAT:
Barge SRW Values: September= +40 Z
WZ: Support= 6.50, Resistance= 7.30-35
WN: Support= 6.50, Resistance= 7.30-35
**PROFILE: Chicago July Wheat> Charts attempting to position for an upside breakout. Overall conditions warn such a probe will lack sustainability.
GLOBAL HIGHLIGHTS & HEADLINES: The White House says no second stimulus package is being discussed. .
Other Cash Values:
Toledo: Corn= -40 Z, Soybeans= -17 X
Cedar Rapids, IA: Corn= -30 U, Soybeans= +25 X.
The risk of loss in trading futures and/or options is substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account.
This newsletter is prepared from information believed to be reliable. Early Market News, Inc. does not guarantee that such information is accurate or complete and it should not be relied upon as such. Opinions expressed are subject to change without notice.
© 2010 Duane Lowry. All Rights Reserved.
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