FIRST LOOK, by Duane Lowry
Tuesday, February 7, 2012

OPENING CALL:
Corn= lower, Wheat= lower, Soybeans= lower.

*At 7:01 am> Night session results: Corn= 4 lower, Wheat= 10 1/2 lower, Soybeans= 3 1/2 lower.

Weather offers favorable/acceptable conditions for Brazil and Argentina.

Wheat will start lower on overnight weakness. News is limited. Overall conditions warn that recent levels are at the upper end of short-term price possibilities and possibly vulnerable to a multi-month price decline that violates the shelf of support established during the Nov-Jan window. Producers need to consider downside price protection.

Corn will start lower on overnight weakness. Charts are losing momentum and poised to roll over. Traders seem to expect bullish corn data from USDA Thursday, but there may be a broader stance that is focusing on large acreage and expanding new-crop carryout levels that has traders anxious for a bullish post-report reaction so that they can attack it as a selling opportunity. There is reasonable risk that a downturn in prices now could develop momentum and sustaining trending action into the early 2012 US growing season with a favorable spring planting season, which seems like a reasonable possibility. Downside risk here very definitely warrants price protection considerations for producers.

Soybeans will start lower on overnight weakness. News is limited. South American weather spin is bearish. Outside market influences are bearish. Technical conditions warn of downside vulnerability. Overall conditions warn of significant downside risk during the next several weeks. Any short-term strength here will lack real sustainability. Downside risk during the next few months is very significant and warrants more serious producer attention.

In summary, we are poised to start lower but we remain in pre-report mode and may see choppy trade into tomorrow's finish. Overall conditions warn that recent price levels/ranges will prove to be the upper end of parameters for the next few months. Downside risk is much greater than popular rhetoric is willing to consider. Producers need to do some serious thinking/planning/acting. At 7:00 this morning: Crude was down $0.84, Gold was down $9.20, Dow Index was down 24 and the US $ was up 14.

CORN:
Barge Values: Feb= +70 H
CH: Support= 6.10, Resistance= 6.45-48

**PROFILE: March Corn> The finishing touches on the defining of this top are taking shape. Current levels need to be searched for selling opportunities. Overall conditions warn of notable downside risk during the next month, possibly a multi-month price weakening.

SOYBEANS:
Barge Values: Feb= +72 H
SH: Support= 11.65, Resistance= 12.40
SMH: Support= 305, Resistance= 330
BOH: Support= 49.00, Resistance= 52.00< br>
**PROFILE: March Soybeans> Short-term upside probes are unsustainable and need to be searched for selling opportunities. IN SUMMARY, downside risk could be very significant during the next few months.

WHEAT:
Barge SRW Values: Feb= +70 H
WH: Support= 6.25-30, Resistance= 6.70-80

**PROFILE: Chicago March Wheat> Recent price peaks likely represent the upper parameters of price strength potential during the next few months. Downside risk from here could $1 by late spring.

GLOBAL HIGHLIGHTS & HEADLINES: The US unveiled new and even tougher banking penalties targeted at Iranian assets and transactions. Iran's parliament has summoned President Ahmadinejad for questioning over a long list of accusations, including allegations that he mismanaged the nation's economy. This is the first such action since 1979. Ukraine says it will have 6.3 mmt wheat available for export during 12/13 marketing season, vs 7-8 mmt for 11/12.


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.
© 2012 Duane Lowry. All Rights Reserved.