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CORN – Mar ‘10 Electronic
Open – $4.09 1/2, High – $4.10, Low – $3.93 1/4, Close – $3.97 Down $.13 1/4
Thoughts – Long Term (into February) – Sideways

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Mar ‘10: Corn closed at the same price that it opened on Tuesday which I said is a warning signal of a potential reversal in trend and today would suggest this is the case.  The U.S. Dollar Index has been on a crazy train higher and isn’t looking back.  As I’ve mentioned in previous posts the dollar is one of the key issues we need to pay attention to in the market because the buying that we’ve experienced has been based on selling the dollar and buying commodities.

The $4.25 double top is still in place for the Mar ’10 corn contract and until we get two closes above this level I am skeptical of this market making any large strides higher especially if the dollar continues to rise.  If we close the market below $3.92 then we could see a test of $3.80 in the near future and if $3.80 doesn’t hold support you can look for $3.72 1/2 – $3.70.

I wrote about the dollar in my last post (12/15/09) and here is what I said: “The dollar rallied again today as it has been trending higher since Dec 1st 2009.  The next level of resistance for the dollar is 77.47 and then 77.92, we are currently trading at 76.92 and our low was 74.175 on November 26th, 2009.“  The high for today as I write this is 77.943 which is just above the resistance point I gave the other day, my point is the market is moving FAST.

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

Mar ‘10 Corn – Support/Resistance for 12-18-09
(R3) Resistance 3: $4.27
(R2) Resistance 2: $4.16 3/4
(R1) Resistance 1: $4.06 3/4
Today’s close: $3.97
(S1) Support 1: $3.90
(S2) Support 2: $3.83 1/2
(S3) Support 3: $3.67
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MEAL – Jan ’10 Electronic
Open – $316.30, High – $317.00, Low – $306.60, Close – $307.40 Down $9.50
Thoughts – Long Term (into February ’10) – Sideways

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Jan ‘10 meal: Meal was no different than any other commodity today as it fell to keep pace with the soybean market.  As I mentioned the other day $319.80 is the area that the Jan ’10 meal contract needs to close above before we need to get too excited about excessive buying.  In my opinion today was more about the huge rally in the dollar and the thought that it may be for real and we could see strength in the greenback as we move forward in time.

Based on the trade action over the past few days I would say we should test the $301.40 area and if there fails to be support at this level we stair step down to $298.40 and $293.30 then support falls all the way down to $276.80.  I think the $301.40 to $298.40 area is a realistic target but I need to see how we trade in the next couple of days to know if $276.80 is likely.  I don’t think a test of $276.80 is likely at this point unless we continue to see the dollar move higher by leaps and bounds.

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

Jan ‘10 Meal – Support/Resistance for 12-18-09
(R3) Resistance 3: $320.70
(R2) Resistance 2: $314.00
(R1) Resistance 1: $310.30
Today’s close: $307.40
(S1) Support 1: $303.60
(S2) Support 2: $299.90
(S3) Support 3: $289.50

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HOGS – Feb ‘10 GLOBEX
Open – $66.425, High – $66.60, Low – $65.275, Close – $65.55 Down $1.275
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 hog market didn’t have anything to stand on today either and in my opinion acted really well considering cutout was down $2.04 last night and the dollar trading higher.  I realize that some of the cutout number was factored into yesterday’s trade but non-the-less it was a reasonable day today in the hog market.  $65.35 is an area the market needs to hold otherwise we could test $63.85 again in the near future.  The other key number for the Feb ’10 contract is $65.025 which is an intermediate trend line which warrants some attention.

I have mentioned in the recent past that most of my indicators were pointing lower for hogs but the market hasn’t done any real damage to the chart to say it is going to head lower.  The damage to the chart would be two consecutive closes below the $63.85 number I spoke of above.  A cycle indicator that I use suggests we should move lower into the end of next week and then begin to move higher from there.  I will remain cautiously optimistic the Feb ’10 hog contract UNLESS we close two consecutive days below $63.85, then my bias should turn negative.

As always if you have good profits make sure you look at protecting them!

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

Feb ‘10 Hogs – Support/Resistance for 12-18-09
(R3) Resistance 3: $68.45
(R2) Resistance 2: $67.125
(R1) Resistance 1: $66.35
Today’s close: $65.55
(S1) Support 1: $65.00
(S2) Support 2: $64.50
(S3) Support 3: $63.15

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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.

NEW!!! – If you would like to receive delayed market quotes and/or weather forecast text messages click here to sign up for free.  If you have trouble signing up please email us at leanhog@hurleyandassociates.com

CORN – Mar ‘10 Electronic
Open – $4.07 1/2, High – $4.10, Low – $4.05, Close – $4.07 1/2 Down $.01
Thoughts – Long Term (into February) – Sideways

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Mar ‘10: Corn closed at the exact same price it opened, $4.07 1/2.  When this happens it is a signal that warns of a potential reversal of trend and in this case it would mean lower.  Volume was nothing to write home about today and we were generally quiet for most of the day with a $.05 trade range.  I don’t have much to add to my comments from yesterday; I still think the Mar ’10 contract needs to get above $4.25 for two consecutive closes before we see any aggressive buying.

The dollar rallied again today as it has been trending higher since Dec 1st 2009.  The next level of resistance for the dollar is 77.47 and then 77.92, we are currently trading at 76.92 and our low was 74.175 on November 26th, 2009.  Again, keep an eye on this dollar because if it keeps moving higher we should see pressure on the commodities markets.  I still think it is too early to call a bottom in the dollar based on a two week rally but so far it’s trucking right along.  We had two consecutive weekly closes above the prior week’s high and the last time this happened was in January of 2009.

We currently have a March ’10 $4.20 call option in place for catastrophic upside protection and we are short a March ’10 $3.60 put to help offset the cost of the $4.20 call.  We will buy the short put back if the market rallies any further so we have unlimited downside in the market again.

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

Mar ‘10 Corn – Support/Resistance for 12-16-09
(R3) Resistance 3: $4.17 1/2
(R2) Resistance 2: $4.12 1/2
(R1) Resistance 1: $4.10
Today’s close: $4.07 1/2
(S1) Support 1: $4.05
(S2) Support 2: $4.02 1/2
(S3) Support 3: $3.97 1/2
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MEAL – Jan ’10 Electronic
Open – $316.00, High – $320.90, Low – $314.30, Close – $316.80 Up $.60
Thoughts – Long Term (into February ’10) – Sideways

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Jan ‘10 meal: Meal failed to have any sustainable major follow through to the upside today other than we made a new high above $319.80 but failed to close up there.  The trade action we had today is consistent of the last high we had on Dec 1st, 2009 which made the $319.80 high.  $319.80 still remains the line in the sand for another move higher as far as I’m concerned.  We will need two consecutive closes above this level to see more aggressive buying come into the market.

The $315.00 sell signal I spoke of yesterday would have been exited today as the market went through what would have been the $317.50 stop order.  I had a cycle low projected for yesterday and that projection is still good, however, I’m not sold on the idea of big rally here until the $319.80 area comes out.

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

Jan ‘10 Meal – Support/Resistance for 12-16-09
(R3) Resistance 3: $330.50
(R2) Resistance 2: $323.90
(R1) Resistance 1: $320.40
Today’s close: $316.80
(S1) Support 1: $313.80
(S2) Support 2: $310.70
(S3) Support 3: $304.10

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HOGS – Feb ‘10 GLOBEX
Open – $66.05, High – $67.55, Low – $65.675, Close – $67.425 Up $1.55
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 traded a lot higher today as it rallied during the last hour of trade (exact opposite of what I said I thought it would do based on my comments yesterday).  There is no news to speak of that I’m aware of to warrant the jump at the end of the day and is actually surprising based on the noon cutout report showing most cuts quoted lower.  We do know that morning reports are just reference points and can’t be taken as fact because they usually change by the afternoon.

Today’s rally came with good volume in the Feb ’10 contract, we still need to get above and close above $68.10 for two consecutive days in order to see more aggressive buying surface in the Feb ’10 contract.  As I said yesterday I have a lot of indicators that are pointing lower for the short-term but the market seems strong and continues to hold support levels on retracements lower.  I will continue to be friendly for now but will be watching closely to see how we trade against $68.10 if we can get there.  Again if we can close above $68.10 for two consecutive days then $70.675 should be our next target.

Like I mentioned in the feed section, I’m concerned about the dollar having two good weeks of trade and if it continues it could put the brakes on the hog market and commodities in general for a period of time.  If you have good profits make sure you look at protecting them!

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

Feb ‘10 Hogs – Support/Resistance for 12-16-09
(R3) Resistance 3: $70.425
(R2) Resistance 2: $68.75
(R1) Resistance 1: $68.10
Today’s close: $67.425
(S1) Support 1: $66.875
(S2) Support 2: $65.00
(S3) Support 3: $63.125

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.