Dec '08 Corn Daily Chart
CORN
Well, it looks like we decided to retest the low we made on Tuesday of $5.31. USDA is releasing its monthly crop production report tomorrow at 7:30 AM Central standard Time. The way the charts look, it feels as if the market could open lower and then turn around and trade higher for the day. The trade has been using a 156.5 yield since last Friday when Informa give its estimate for corn production. In my opinion, the USDA would have to release a number of 157 or better for the market to be extremely bearish from these levels. I believe the overnight trade tonight will be rather quiet leading up to tomorrow's report. The market opened at $5.32 1/2 and was trading at $5.35 1/2 at 10:30 AM this morning. Trading above the opening price at 10:30 suggested that the market would close above the opening price. However, we closed slightly below that opening price.
The Dec '08 corn seemed to be following crude oil this morning before we rallied into the 10:30 AM time-frame. Again, like I've been saying for the last week or so, the corn market feels like it's trying to find bottom in this area. If the USDA comes out with a bearish report tomorrow morning and we open lower trade higher there would be a buy signal at $5.31 1/2, this order would be in the form of a buy stop. The corn market has definitely been pressured by the US Dollar Index making its tremendous trek higher as well as crude oil moving down towards $100 a barrel. Crude oil reached a low of $100.10 this morning but has yet to breach the $100 per barrel mark.
Although I have no technical backing to support this statement, I feel like the market could trade below $5.31 then make a run higher. We have a potential reversal if we can close above $5.38 3/4. Technically speaking, there is no reason for corn to rally or change directions until we close above a prior day high. Bottom line for tomorrow - all bets are off when dealing with the USDA report. I feel as if we could have a negative report tomorrow and still trade better than what we did in August.
Dec '08 Meal Daily Chart
MEAL
December soybean meal had the best trade of all agriculture commodities today. Soybean meal opened at $325.50 per ton this morning and was trading at $327.50 at 10:30 AM. With the market trading higher than the open at 10:30 AM, this suggested that the market could trade higher for the balance of the day and close above the opening price. The market did just that settling $4.40 higher at $330.20. It is interesting to note the support we seem to have found at $326.80 a ton. December meal contract has traded below $327 every day this week but has failed to stay below that level for more than one day. If December soybean meal can have a good day tomorrow and trade higher, the weekly chart looks pretty good. If we do trade higher and close higher for the week, there is a good possibility we could see buying above this week's highs next week.
I am still maintaining my long positions at $350 a ton because I believe it will be a good hedge. Qualifications on my 60 minute chart and daily chart suggest that prices could hold at these levels. Again, like corn, all bets are off with the USDA report coming out tomorrow. I do however, have a feeling of support for the soybean meal market. I will look for higher markets tomorrow with the possibility of a higher close. If we can get meal to trade higher tomorrow, my target would be $347.40 per ton for the December contract.
Dec '08 Hogs Daily Chart
HOGS
December lean hogs made a rally attempt today, closing $.80 higher.The December chart is actually showing a nice sign of potential reversal after today's action. If there is a short-term bottom in this market, there should be good buying above today's highs of $67.10. If it is a good bottom, the potential resistance points will be, $68.15, $69.73, and ultimately $71.15. I currently own call options in the October contract, and will be using those for protection to the upside. All of my short futures. are still in the December contract. I will keep them there for now.
Assuming the market continues to strengthen tomorrow, and we have a good close for the week, the weekly chart would suggest sideways trade between $65.17 and $70.72. The afternoon cutout was $.08 lower today, while the national cash price was $1.09 higher this afternoon. The weighted average for hogs was $69.34, which is still slightly above the October futures. As I mentioned before, I do not plan on removing any of my lean hog hedges because of potentially large fourth-quarter hog numbers. I will need good confirmation that the market is reversing if I decide to do anything with my hedges to preserve equity. My expectation for the markets tomorrow is follow-through strength and short covering going into the weekend.
I apologize if my sentences seem choppy, I am using new software that converts my speech to text for writing this blog. If you have ever tried doing this, it is harder than it seems. After I master its use, it will allow me to provide more information in the same amount of time. Please bear with me as I make this change, and as always, thanks for reading.
CORNWell, it looks like we decided to retest the low we made on Tuesday of $5.31. USDA is releasing its monthly crop production report tomorrow at 7:30 AM Central standard Time. The way the charts look, it feels as if the market could open lower and then turn around and trade higher for the day. The trade has been using a 156.5 yield since last Friday when Informa give its estimate for corn production. In my opinion, the USDA would have to release a number of 157 or better for the market to be extremely bearish from these levels. I believe the overnight trade tonight will be rather quiet leading up to tomorrow's report. The market opened at $5.32 1/2 and was trading at $5.35 1/2 at 10:30 AM this morning. Trading above the opening price at 10:30 suggested that the market would close above the opening price. However, we closed slightly below that opening price.
The Dec '08 corn seemed to be following crude oil this morning before we rallied into the 10:30 AM time-frame. Again, like I've been saying for the last week or so, the corn market feels like it's trying to find bottom in this area. If the USDA comes out with a bearish report tomorrow morning and we open lower trade higher there would be a buy signal at $5.31 1/2, this order would be in the form of a buy stop. The corn market has definitely been pressured by the US Dollar Index making its tremendous trek higher as well as crude oil moving down towards $100 a barrel. Crude oil reached a low of $100.10 this morning but has yet to breach the $100 per barrel mark.
Although I have no technical backing to support this statement, I feel like the market could trade below $5.31 then make a run higher. We have a potential reversal if we can close above $5.38 3/4. Technically speaking, there is no reason for corn to rally or change directions until we close above a prior day high. Bottom line for tomorrow - all bets are off when dealing with the USDA report. I feel as if we could have a negative report tomorrow and still trade better than what we did in August.
Dec '08 Meal Daily Chart
MEAL December soybean meal had the best trade of all agriculture commodities today. Soybean meal opened at $325.50 per ton this morning and was trading at $327.50 at 10:30 AM. With the market trading higher than the open at 10:30 AM, this suggested that the market could trade higher for the balance of the day and close above the opening price. The market did just that settling $4.40 higher at $330.20. It is interesting to note the support we seem to have found at $326.80 a ton. December meal contract has traded below $327 every day this week but has failed to stay below that level for more than one day. If December soybean meal can have a good day tomorrow and trade higher, the weekly chart looks pretty good. If we do trade higher and close higher for the week, there is a good possibility we could see buying above this week's highs next week.
I am still maintaining my long positions at $350 a ton because I believe it will be a good hedge. Qualifications on my 60 minute chart and daily chart suggest that prices could hold at these levels. Again, like corn, all bets are off with the USDA report coming out tomorrow. I do however, have a feeling of support for the soybean meal market. I will look for higher markets tomorrow with the possibility of a higher close. If we can get meal to trade higher tomorrow, my target would be $347.40 per ton for the December contract.
Dec '08 Hogs Daily Chart
HOGS December lean hogs made a rally attempt today, closing $.80 higher.The December chart is actually showing a nice sign of potential reversal after today's action. If there is a short-term bottom in this market, there should be good buying above today's highs of $67.10. If it is a good bottom, the potential resistance points will be, $68.15, $69.73, and ultimately $71.15. I currently own call options in the October contract, and will be using those for protection to the upside. All of my short futures. are still in the December contract. I will keep them there for now.
Assuming the market continues to strengthen tomorrow, and we have a good close for the week, the weekly chart would suggest sideways trade between $65.17 and $70.72. The afternoon cutout was $.08 lower today, while the national cash price was $1.09 higher this afternoon. The weighted average for hogs was $69.34, which is still slightly above the October futures. As I mentioned before, I do not plan on removing any of my lean hog hedges because of potentially large fourth-quarter hog numbers. I will need good confirmation that the market is reversing if I decide to do anything with my hedges to preserve equity. My expectation for the markets tomorrow is follow-through strength and short covering going into the weekend.
I apologize if my sentences seem choppy, I am using new software that converts my speech to text for writing this blog. If you have ever tried doing this, it is harder than it seems. After I master its use, it will allow me to provide more information in the same amount of time. Please bear with me as I make this change, and as always, thanks for reading.
USDA ESTIMATED PORK CARCASS CUTOUT
Based on FOB Omaha carlot pork prices and industry yields.
Calculations for a 200 lb Pork Carcass
53-54% lean, 0.65"-0.80" backfat at last rib
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Total Today's Primal Cutout Values
Date Loads Carcass Loin Butt Pic Rib Ham Belly
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09/11 92.0 75.06 93.64 79.78 61.99 87.86 70.32 75.59
Change : -0.08 -3.26 -0.23 -0.16 0.31 2.45 0.97
-----------------------------------------------------------------------National Direct Hog Price Comparison
--------------------------------------------------------------------------
: National : Iowa : Western : Eastern
: : Minnesota : Cornbelt : Cornbelt
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Base Price is the price from which no discounts are subtracted and
no premiums are added.
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BARROWS & GILTS : 1.09 hgr : 2.55 hgr : 1.93 hgr : .64 lwr
Negotiated : : : :
CARCASS BASIS : 62.00-72.20 : 62.00-72.20 : 62.00-72.20 : 63.25-69.59
185 lb Base Hog : wtd avg : wtd avg : wtd avg : wtd avg
Plant Delivered : 69.34 : 70.59 : 70.39 : 67.27
--------------------------------------------------------------------------
Head Count : 23,574 : 10,994 : 15,639 : 7,935
==========================================================================
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.
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