CORN
It didn't take long for March '09 corn to reach its low this morning. The low was made during the first hour of trade and was $3.76 1/2. I was impressed with the first hour trade making lows and then moving higher back toward the opening price of $3.83 1/2. It ended up still being negative from a statistical perspective meaning the futures should close below $3.83 1/2, which it did.
The volume today was light, around half of what it was during some of the "liquidation" days in October. I think the March '09 corn has done enough to the downside for now. We are still holding the resistance at $3.80 (from a close perspective) in the March contract. Nothing new, the equity markets are in the toilet again today making new low's and then rallying only to sell off again. Most of the action in the equity market hinged on congress deciding whether or not they are going to bailout the auto industry. As of 1:54 p.m. CST they were not and the Dow Jones sold off.
Bottom line- I expect March '09 corn to open lower tonight and maybe make a jab at today's low of $3.76 1/2 but I think the weakness will be short lived in the overnight session. We have a gap at $3.92 in the hourly chart that we need to fill at some point and I think we may have a chance at doing it over the next few days. I expect an early low tomorrow and some short covering later in the day.
The volume today was light, around half of what it was during some of the "liquidation" days in October. I think the March '09 corn has done enough to the downside for now. We are still holding the resistance at $3.80 (from a close perspective) in the March contract. Nothing new, the equity markets are in the toilet again today making new low's and then rallying only to sell off again. Most of the action in the equity market hinged on congress deciding whether or not they are going to bailout the auto industry. As of 1:54 p.m. CST they were not and the Dow Jones sold off.
Bottom line- I expect March '09 corn to open lower tonight and maybe make a jab at today's low of $3.76 1/2 but I think the weakness will be short lived in the overnight session. We have a gap at $3.92 in the hourly chart that we need to fill at some point and I think we may have a chance at doing it over the next few days. I expect an early low tomorrow and some short covering later in the day.
MEAL
I said on Tuesday that the Dec '08 meal contract had a shot at touching $258.00 on this move before we reached good support. Our low today was $256.80 so we are now in my support area, the question is will it hold. We filled a gap on the hourly chart today that was made on October 22nd, 2008 at $256.90. We have filled the gap and also come to a place where it looks like we have done enough to the downside for a bit.
Crude oil made a new low of $48.50 today which is the lowest level since the week of May 27th, 2005! This new low and also crude trading around $3.00+ lower all day, helped keep the meal market lower. The Dow Jones didn't help matters much either but meal didn't seem to pay as much attention to the Dow as it did Crude.
Bottom line - I feel the market should open weaker tonight and maybe move lower, but then recover as the evening session goes on. I think tomorrow will have a low early in the day if not overnight and then firm as the day moves forward. If the market makes another leg lower it should see support at $251.30 and then big support at $236.90, our most recent low. $262.20 is a short-term resistance for tomorrow's trade if we trade higher like I think we could.
Crude oil made a new low of $48.50 today which is the lowest level since the week of May 27th, 2005! This new low and also crude trading around $3.00+ lower all day, helped keep the meal market lower. The Dow Jones didn't help matters much either but meal didn't seem to pay as much attention to the Dow as it did Crude.
Bottom line - I feel the market should open weaker tonight and maybe move lower, but then recover as the evening session goes on. I think tomorrow will have a low early in the day if not overnight and then firm as the day moves forward. If the market makes another leg lower it should see support at $251.30 and then big support at $236.90, our most recent low. $262.20 is a short-term resistance for tomorrow's trade if we trade higher like I think we could.
HOGS
Hey- the market moved! It is nice to see we still have activity in this market. We had a nice little rally today in the Feb and April '09 futures which brings in a some optimism for the hog market in general. I am going to start talking about the Feb '09 contract now because the Dec '08 isn't going to have as much activity any more as we close in on expiration in a few weeks. It is my understanding that the hog market saw strength today because of cash and cutout optimism for the coming weeks. I don't know how excited I want to get because the US Dollar Index is still toward its high but I have been getting warning signs (not sell signals, warning signs) of a top in the Dollar the past few weeks.
As of today's close we are trading above last week's high of $63.82 and we also traded below last week's low all in today's trade. What does that say about how quiet the market has been? We should have some resistance at $66.37 in the Feb '09 contract in the coming days and then up to $67.80. I think we could set back slightly either tonight or tomorrow and test the $63.25-$63.70 area and find support.
Bottom line - I think we had good trade action today which will allow for some follow through buying tomorrow but I think we could test some support around $63.70 first before moving higher. I expect an early low tomorrow and firming prices as the session moves forward.
As of today's close we are trading above last week's high of $63.82 and we also traded below last week's low all in today's trade. What does that say about how quiet the market has been? We should have some resistance at $66.37 in the Feb '09 contract in the coming days and then up to $67.80. I think we could set back slightly either tonight or tomorrow and test the $63.25-$63.70 area and find support.
Bottom line - I think we had good trade action today which will allow for some follow through buying tomorrow but I think we could test some support around $63.70 first before moving higher. I expect an early low tomorrow and firming prices as the session moves forward.
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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11/20 59.0 56.67 71.21 64.34 41.04 86.36 43.51 67.00
Change : 0.23 -0.99 1.23 -0.06 0.66 0.13 0.17
-----------------------------------------------------------------------National Direct Hog Price Comparison
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: 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 : .53 lwr : .21 lwr : .43 lwr : .28 lwr
Negotiated : : : :
CARCASS BASIS : 40.50-51.50 : 40.50-51.50 : 40.50-51.50 : 42.00-51.35
185 lb Base Hog : wtd avg : wtd avg : wtd avg : wtd avg
Plant Delivered : 49.45 : 50.24 : 50.27 : 48.20
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Head Count : 21,625 : 9,370 : 12,883 : 8,382
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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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