Please note that my comments will be limited next week as I will be in meetings.
CORN - March '09 Electronic
Open - $3.66 1/2, High - $3.69 1/4, Low - $3.59 3/4, Close - $3.65 1/4 Down $.01 1/4
March '09 corn didn't have much in the way of fireworks today to stay at pace with the soybean market. Fundamentally the market received negative news with at best a dismal export report. The market touched the resistance level of $3.69 ($3.69 1/4 actually) that I spoke of yesterday and couldn't break through.
As I write this the corn market is $.07 higher and I have been selling it tonight to reduce some long futures position I put on yesterday. I am keeping my $3.60 March '09 call options in place for now as I rolled them down from $4.00 with the profits from the short $4.10 March call and long $4.40 call position I put on Friday prior to the report. I exited the short $4.10 March call yesterday because it served its purpose and the position picked up around $.18. I am taking profit on my long futures to stand aside and not have a definite directional position on right now.
Bottom line - I have a potential sell signal at $3.68 3/4 on a sell stop tonight/tomorrow. I would put that order in right now as a sell stop and if it fills I would place a risk managing buy stop to exit the position $.01 above the current high. If the market continues its trek higher tonight and into tomorrow we may see a test of the $3.79 1/2 area that I talked about yesterday. I would definitely sell against that level for now and wait for more direction from the charts. Please do what is right for you, as always these are my opinions and I have the luxury of changing my mind prior to my next blog entry. As always follow your plan!
MEAL - March '09 Electronic
Open - $296.90, High - $316.60, Low - $292.50, Close - $305.00 UP $8.00
March '09 meal took its lead from soybeans today that had a tremendous export number this morning. I am honestly confused by meal at this point and if you will notice the last sentence I wrote in my meal comments yesterday I said "I will continue to keep my calls in place for coverage because what I think and what the market does are two different things. It is very important to know and understand that difference."
My point was proven today, I said I thought if the market got going to the upside $308.00 would provide and hold resistance. The March contract BLEW right through $308.00 today but did settle at $305.00 which is obviously under the aforementioned resistance level. We filled at gap left at $313.20 from Monday and then backed off from there. Based on the way the intra-day charts look, it seems like we could make another run at today's high of $316.60.
Bottom line - If we continue to trade above $304.60 tonight and tomorrow then I think we could make a run at the high of $316.60 but if we fail to stay above $304.50 then we could test $300.00 and ultimately $292.50. The short-term charts suggest tomorrow being a better day tomorrow but be careful if we begin to trade below $304.50 for a period of time!
HOGS - April '09 GLOBEX
Open - $66.30, High - $66.30, Low - $65.30, Close - $65.85 DOWN $.85
I said yesterday I thought we would trade the lower cutout number early and possibly test $65.65 which happened as $65.30 was the low for the day. April '09 hogs failed to mount much of a rally though which was surprising to me from a technical perspective. I guess it is kind of hard to do when packer margin is in the red.
The cutout today was marginally higher, up $.05 and cash was both sides of unchanged. The overnight markets are higher as I write this but nothing major, up $.42. I am expecting a mixed day tomorrow as the market should be finding a low by next week if it hasn't already; I say this as a result of some short-term cycle projections I look at.
Bottom line - The market should remain firm tonight and maybe even early tomorrow as the US Dollar index is weaker tonight and the Dow Jones is trading higher. The Dow Jones looks like it may have put in a short-term bottom here today but tomorrow will be the teller of that story. I look for a test of $66.55 either tonight or tomorrow.
NW_LS500
Des Moines, IA Thu, Jan 15, 2009 USDA Market News
USDA NATIONAL CARLOT PORK REPORT as of: 3:00 P.M.
Purchases equated to FOB Omaha Basis.
Compared to Wednesday's Close: Fresh loins steady to 1.00
higher; butts firm; sknd hams mostly 2.00 lower; sdls bellies unevenly steady;
lean trimmings generally steady. Trading slow, with light to moderate demand
and offerings.
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Loads PORK CUTS : 67.75
Loads TRIM/PROCESS PORK : 5.0
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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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01/15 72.8 56.26 76.48 60.54 38.20 94.86 40.11 64.76
Change : 0.05 0.17 2.03 0.03 0.28 0.04 -1.41
-----------------------------------------------------------------------NW_LS831
Des Moines, IA Thu, Jan 15, 2009 USDA-IA Dept of Ag Market News
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 : .61 lwr : .08 hgr : .02 lwr : .21 lwr
Negotiated : : : :
CARCASS BASIS : 43.50-63.85 : 44.00-63.85 : 44.00-63.85 : 43.50-59.46
185 lb Base Hog : wtd avg : wtd avg : wtd avg : wtd avg
Plant Delivered : 57.34 : 59.03 : 59.31 : 54.58
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Head Count : 24,432 : 10,086 : 14,304 : 9,198
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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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