CORN - May '09 Electronic
Open - $3.87 3/4, High - $3.89 1/2, Low - $3.76 3/4, Close - $3.86 1/4 Down $.00 3/4.
Open - $3.87 3/4, High - $3.89 1/2, Low - $3.76 3/4, Close - $3.86 1/4 Down $.00 3/4.
Thoughts - Long Term (6 months) - Bullish/Higher
Today was interesting considering we have the USDA March planting intentions report due out tomorrow morning. May '09 corn was down $.05 in the overnight session then opened the day session made an early low and closed near its high for the day session. I was surprised to see the corn market as strong as it was with crude oil being down over $4.00/barrel today.
I made a comment on how weak the U.S. Dollar Index has been after the Government said they were going to buy toxic assets from the banks. Since my comments the dollar has risen and made near a 50% retracement of its most recent decline which is normal. I am still of the opinion the dollar is heading south which is obviously good for the commodities markets. I want to keep a bullish structure to any positions I have on for feed. As of right now I'm long futures with a $3.80-$3.60 put spread in place on the May '09 contract. The put strategy allows us to be long the market without getting clobbered if we are wrong.
Bottom line - USDA report out tomorrow so that will trump any direction I have if there is a surprise. The trade is looking for corn acres to be around 86 million so anything less (85 or less in my opinion) will be positive to corn prices and I look for trade to give us an early low and a late high. Support in May '09 corn tomorrow should be $3.82, $3.81 and $3.76 3/4 while resistance should be $3.87 1/4, $3.89 1/2 then $3.92. I had a buy signal at $3.85 today with a risk management sell stop at $3.75 1/2. Market action today suggests a probable reversal to the upside tomorrow with buy stops above today's high's of $3.89 1/2.
MEAL - May '09 Electronic
Open - $284.30, High - $285.50, Low - $277.70, Close - $281.50 Down $2.30
Open - $284.30, High - $285.50, Low - $277.70, Close - $281.50 Down $2.30
Thoughts - Long Term (6 months) - Bullish/Higher
As you may have noticed I have added a my long term thoughts in black and white just below the market close on each commodity I talk about. I try to give a longer-term directional feel to the market but I may forget it sometimes and if you follow along with my comments my short-term commentary can easily be contrary to my long term feel. I am trying to make my thoughts more clear to you so please let me know if you have suggestions and thanks to those who have.
Today's low of $277.70 was within $.10 of the 62% retracement of the recent move higher. The May '09 contract needs to get back above $283.60 for a couple of days before we look to make another run toward $308.90. I have the same thoughts on meal as I do on corn, I think we will see an early low and a late high tomorrow but remember any surprises in from the USDA and all bets are off.
Bottom line - I am looking for an early low and late high with support at $277.60 and $275.10 and resistance at $282.20 and $285.00. Looking for the USDA report to give us direction tomorrow but I believe we will see positive trade based on the USDA numbers. This thought is solely based on the way the SHORT TERM charts look to me as well as the expected weakness in the U.S. Dollar Index. The dollar thing is a big deal guys.
HOGS - June '09 GLOBEX
Open - $70.60, High - $71.20, Low - $70.525, Close - $70.975 Down $.425
Open - $70.60, High - $71.20, Low - $70.525, Close - $70.975 Down $.425
Thoughts - Long Term (6 months) - Friendly
The market was trading the Quarterly Hog & Pig report from Friday which was evidently mildly bearish according to today's trade. I am looking for a place to lighten my short position this week if the charts suggest we do so. I have been saying for awhile in my comments that I have a cycle low near the end of March which I still do. I will be looking for signs and signals that suggest a bottom and look to re-structure my short positions when I see these signs. Today is the first one; we opened the market below Friday's low and rallied off of the open. The day and potential signal started out okay but failed to close above the crucial Friday low so I will keep looking.
In doing my research it tells me that June futures move lower from the close of April 1st to the close of April 15th 44.5% of the time by an average of $2.86/cwt and up 55.5% of the time by an average of $3.23/cwt. I talk about June because I am no longer using April '09 as a hedge vehicle which makes sense as the June has dropped near $3.00/cwt more than April since the week of March 16th (from high to low of the spread).
Bottom line - as I mentioned above I will continue to look for signs in the market to make me look at adjusting my short positions in the market place. In an effort to find a patter for the next couple of weeks based on the market tendencies since the year 2000; it seems as if the risk is more to the upside than to the downside. I am looking for an early low and a late high tomorrow; cutout was a non-event today as it was up $.14. I look for support at $70.52 and $69.52 and resistance should be around $71.35, $71.575 and then $72.20.
NW_LS500
Des Moines, IA Mon, Mar 30, 2009 USDA Market News
USDA NATIONAL CARLOT PORK REPORT as of: 3:00 P.M.
Purchases equated to FOB Omaha Basis.
Compared to Friday's Close: Fresh 1/4" trim loins not reported;
boston butts 2.00 higher in a light test; sknd hams 17-20 lbs 1.00 lower, 23-27 lbs
3.00 lower, 23-27 lbs 1.00 lower; sdls bellies 14-16 lbs 2.00 lower; lean trim steady to
1.00 lower. Trading slow, with light demand and mostly moderate offerings.
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Loads PORK CUTS : 33.75
Loads TRIM/PROCESS PORK : 10.0
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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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03/30 43.8 57.68 69.33 61.70 40.54 96.19 43.37 76.41
Change : 0.14 0.92 0.62 -0.03 -0.81 0.19 -1.00
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NW_LS831
Des Moines, IA Mon, Mar 30, 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 : .08 hgr : .04 lwr : .15 hgr : .44 hgr
Negotiated : : : :
CARCASS BASIS : 45.50-59.80 : 46.00-59.80 : 46.00-59.80 : 45.50-59.50
185 lb Base Hog : wtd avg : wtd avg : wtd avg : wtd avg
Plant Delivered : 56.28 : 57.00 : 57.37 : 54.85
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Head Count : 23,625 : 8,339 : 13,266 : 10,269
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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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