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CORN – Mar ‘10 Electronic
Open – $4.15 1/4, High – $4.21 1/4, Low – $4.12, Close – $4.14 1/2 Down $.03
Thoughts – Long Term (into February) – Sideways

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Mar ‘10: The corn market gave back most of its gains from yesterday with the funds selling around 6,000 contracts today.  It is confusing to say the least because the Dow Jones was 100+ higher for most of the session; the dollar was a lot lower and crude was up as well.  All of the outside factors suggested corn should have been higher on the day but the end result was a sell off going into the close.

As I mentioned yesterday we still have a double top at the $4.25 level which suggests we should hold out on taking an aggressive approach to owning corn.  Today we did buy a Mar ’10 $4.20 call, sold a $4.80 call and sold a $3.60 put for $.10 to give us some upside in the event the market does take off through the $4.25 area.  The Dubai issues have all but gone away and with the dollar moving lower again today I wanted to have some protection in place if we get a violent move higher.  If the market tanks from here we will be long Mar ’10 corn at $3.70.

We can look for the markets to become more and more volatile between now and the first of the year as we have to move through the holidays.  Nothing has really changed in my opinion, the funds will decide where this market goes and closing lower today was a surprise considering the outside markets would promote higher prices.

Bottom line: I am looking for the market to experience an early low tomorrow.

Mar ‘10 Corn – Support/Resistance for 12-02-09
(R3) Resistance 3: $4.25
(R2) Resistance 2: $4.19 3/4
(R1) Resistance 1: $4.16
Today’s close: $4.14 1/2
(S1) Support 1: $4.10 1/2
(S2) Support 2: $4.06 3/4
(S3) Support 3: $3.97 1/2
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MEAL – Jan ’10 Electronic
Open – $315.00, High – $319.80, Low – $312.50, Close – $313.40 Down $1.80
Thoughts – Long Term (into February ’10) – Sideways

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Jan ‘10 meal: Meal traded above the $316.70 level of resistance again today but failed to close above it for the second day in a row.  The last two trading days have left me feeling like the Jan ’10 meal contract wants to find a top in this area.  We could expect sell stops to be triggered below $312.50 in the Jan ’10 contract if we trade there tomorrow.

We are still on the sideline in meal and will continue to be for now as we begin to move through the holiday season.  As always if there is profit in a group of hogs with corn and meal prices at current levels just lock it in!

Bottom line: I’m looking for the market to experience an early low tomorrow.

Jan ‘10 Meal – Support/Resistance for 12-02-09
(R3) Resistance 3: $322.50
(R2) Resistance 2: $317.90
(R1) Resistance 1: $315.20
Today’s close: $313.40
(S1) Support 1: $310.60
(S2) Support 2: $307.90
(S3) Support 3: $300.60

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HOGS – Feb ‘10 GLOBEX
Open – $66.975, High – $67.575, Low – $66.65, Close – $66.95 Up $.075
Thoughts – Long Term (into February) – Neutral

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Hog margins are starting to show some good profit for the coming year.  If you would like to run a profitability crush for your operation, email us at leanhog@hurleyandassociates.com.

Feb ‘10 hogs: The Feb ’10 contract didn’t change much from yesterday as we had a mostly quiet day of trade.  The range from low to high was only $.925 which isn’t very wide these days.  As mentioned yesterday, the market looks like it is at a point where it could take a breather and retrace back toward the $64.525 area based on the indicators I follow.  I have no clear cut sell signal but my indicators say we are way overbought and are due to correct.

The fund money is still the key in price direction which is tied to the dollar; it was lower today and helped support the hog futures as the cash market looked sick.  The noon cutout report showed some optimism for this afternoon’s cutout number but a lot can change between the noon and final report.

$66.55 is an area of support for the Feb contract and if we close above this price on Friday we should target $70.675 in the near future.  There is a POTENTIAL sell signal on the weekly chart at $65.00, if Feb ’10 closes below $65.00 this Friday that would trigger the sell signal.  If the market does NOT settle below $65.00 by this Friday the signal is null and void.  This signal is only good if the market gets as low as $65.00, it is not good at current levels.

Bottom line: I’m looking for an early low tomorrow.

Feb ‘10 Hogs – Support/Resistance for 12-02-09
(R3) Resistance 3: $68.90
(R2) Resistance 2: $67.975
(R1) Resistance 1: $67.45
Today’s close: $66.95
(S1) Support 1: $66.55
(S2) Support 2: $66.15
(S3) Support 3: $65.20
(S4) Support 4: N/A
(S5) Support 5: N/A
(S6) Support 5: N/A

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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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CORN – Dec ‘09 Electronic
Open – $3.88 1/4, High – $3.98 3/4, Low – $3.75 1/4, Close – $3.84 Down $.06
Thoughts – Long Term (into December ‘09) – Sideway/Lower

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Dec ‘09: Enthusiasm was once again on the prowl prior to the market open but follow through to the upside didn’t last for very long as the market topped within the first five minutes of trade posting a high of $3.98 3/4.  As mentioned yesterday it is hard to get a good grasp on what the market is going to do because of the irrational (as it pertains to fundamentals, weather and some technicals) buying that has come into the market place via the funds.

Today the steam ran out of the locomotive early, not to say that it won’t be back but for today it faltered.  We exited our long corn futures that we own against our long $3.70 puts at $3.90 1/2 and will look to buy the market at a lower level.  This could change tomorrow but for now we are on the sidelines until we see good reason to jump back in.

If you have no coverage I would suggest you talk with your broker and buy some out of the money calls for catastrophic protection if this thing really gets moving.  If $4.13 1/2 is breached and we close above it for two consecutive days the markets next target is the summer high of $4.73 1/2.

Bottom line: I am looking for the market to experience an early high tomorrow.

Dec ‘09 Corn – Support/Resistance for 11-05-09
(R3) Resistance 3: $4.04
(R2) Resistance 2: $3.94
(R1) Resistance 1: $3.88 1/2
Today’s close: $3.84
(S1) Support 1: $3.78 1/2
(S2) Support 2: $3.72 3/4
(S3) Support 3: $3.57
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MEAL – Dec ‘09 Electronic
Open – $306.50, High – $311.00, Low – $300.00, Close – $301.60 Down $4.80
Thoughts – Long Term (into November ‘09) – Sideways/Lower

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Dec ‘09 meal: Meal was weaker than the corn market today as it followed soybeans lower before corn broke as much as it did on the end of the day.  I said I was looking for the meal market to experience an early low but that wasn’t the case as the low came near the end of the day.  We are still long our meal contracts around $297.00 and will continue with this position for now but will monitor it closely.

The meal market tested the old high of $311.40 and failed to close above it.  This type of behavior suggests that we should see a slight pullback in the market and then take another run at it.  I believe we will need the help of funds in order to do this but they didn’t show up today like they have the past couple of days.  Again as mentioned before it is basically up to the funds if they want to keep this market at this level, if their appetite for meal has expired then I would look for the market to back off but they are ultimately in control right now.

Bottom line: I’m looking for the market to experience an early low tomorrow.

Dec ‘09 Meal – Support/Resistance for 11-05-09
(R3) Resistance 3: $315.20
(R2) Resistance 2: $308.40
(R1) Resistance 1: $304.20
Today’s close: $301.60
(S1) Support 1: $297.40
(S2) Support 2: $293.20
(S3) Support 3: $282.20

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HOGS – Dec ‘09 GLOBEX
Open – $57.70, High – $58.15, Low – $57.175, Close – $57.80 Up $.25
Thoughts – Long Term (into December) – Neutral

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Dec ‘09 hogs: The Dec ’09 hogs looked tired again today as we had a $1.00 trade range which is relatively narrow for this market.  The cash prices at noon were much higher and actually came in near the same high levels this afternoon.  The market is once again giving signs of being top heavy at these levels but there really isn’t much resistance between current levels and $59.225 so that remains an upside target.  We are starting to see the same type of action we had in the middle of October, it seemed like every day was a warning sign but the market didn’t break.

I am holding off on saying we are topping because of the way the market acted in October but the way we’ve traded the last two days is making me wonder.  The market has shrugged off the H1N1 in the hogs on an Indiana farm which is good; let’s hope China and Russia see it the same way.  The U.S. Dollar Index broke hard today but is still above my line in the sand of 74.94, we are trading at 75.70 as I write this article.

The intra-day charts are suggesting an early low for tomorrow and then it shows the market providing strength for the balance of the day.  This is quite possible as cash was up today and cutout was up slightly but not enough to keep pace with the big jump we had in cash.  We remain in our synthetic put positions for now so we have downside risk protected in the market and the upside opportunity is completely open.

Bottom line: I’m looking for an early low tomorrow.

Dec ‘09 Hogs – Support/Resistance for 11-05-09
(R3) Resistance 3: $59.70
(R2) Resistance 2: $58.70
(R1) Resistance 1: $58.30
Today’s close: $57.80
(S1) Support 1: $57.325
(S2) Support 2: $56.75
(S3) Support 3: $55.80
(S4) Support 4: N/A
(S5) Support 5: N/A
(S6) Support 5: N/A

Click here to view cash and cutout reports

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.