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CORN – Dec ‘09 Electronic
Open – $3.97 3/4, High – $4.02 3/4, Low – $3.76 1/2, Close – $3.78 Down $.19 3/4
Thoughts – Long Term (into December ‘09) – Sideways
Dec ‘09: Dec ’09 corn didn’t have much of a chance today as we were trading around $.05 lower when stop orders were touched and dropped the market to around .14 to .15 lower on the day. We never recovered after that as we continued to stay weak and see more selling come into the market. The weather forecast has changed to provide a window of opportunity to get the crop off starting the end of this week and into next.
Our $3.70 Nov calls were exercised on Friday to be long futures so we purchased some $3.70 Dec ’09 puts this morning on the open for $.07 to keep the downside open on the long futures position we have. We also have our short $4.00 Dec ’09 call still in place which we will look to exit if the price is right over the coming days/weeks. We are now back below the $3.88 price level I have been talking about for the last week and if we continue to hold $3.88 as resistance then we should keep moving lower. The change in the weather forecast might be enough of a factor to allow the market some more downside movement.
Friday’s trade was negative at best having the market open firm, make a new high then fail and close on the low for the day. We should have expected selling today below Friday’s low (thus the purchase of $3.70 puts against long futures) via stop orders which is exactly what we got. Funds sold nearly 13,000 contracts of corn today.
Bottom line: I am looking for the market to experience an early low tomorrow.
Dec ‘09 Corn – Support/Resistance for 10-27-09
(R3) Resistance 3: $4.08
(R2) Resistance 2: $3.95
(R1) Resistance 1: $3.85 3/4
Today’s close: $3.78
(S1) Support 1: $3.68 3/4
(S2) Support 2: $3.59 1/2
(S3) Support 3: $3.48
MEAL – Dec ‘09 Electronic
Open – $304.20, High – $306.50, Low – $294.10, Close – $294.80 Down $8.50
Thoughts – Long Term (into November ‘09) – Sideways/Higher
Dec ‘09 meal: Meal had a similar close to corn on Friday but it didn’t close near its low like corn did. The market close on Friday which was negative suggested that we should expect some sell stops below Friday’s low of $299.50 and this is what we got. We exited our short $320.00 Dec call on Friday to give ourselves unlimited upside potential and our $290.00 Nov call turned into a futures position. I place a sell stop at $298.00 for our meal position today and it was touched therefore we are on the sidelines in meal at this time.
For the time being there are more negative factors than positive ones so with this said we will sit on the sidelines until we see something that suggests otherwise. The weather pattern has changed to a drier outlook and this should give producers the time needed to get the crop off. $288.90 is now back on the radar for the Dec ’09 contract and I would expect to touch it sometime this week.
Bottom line: I’m looking for the market to experience an early low and late high tomorrow.
Dec ‘09 Meal – Support/Resistance for 10-27-09
(R3) Resistance 3: $310.80
(R2) Resistance 2: $302.80
(R1) Resistance 1: $298.50
Today’s close: $294.80
(S1) Support 1: $290.40
(S2) Support 2: $286.00
(S3) Support 3: $274.80
HOGS – Dec ‘09 GLOBEX
Open – $53.175, High – $53.825, Low – $52.825, Close – $53.45 Up $.425
Thoughts – Long Term (into December) – Negative
Dec ‘09 hogs: Dec hogs are still trading in the $52.10 – $54.95 range that it’s been in since October 9th. This sideways trade is building energy in the market and whichever side we break out of should provide a sizeable move in the direction of the break out. People are taking positions in the market in this range and once we break out of the range the people that are wrong cover positions and propel the market in the direction of the breakout. The longer the sideways pattern the more energy we build.
I have no changes to what I have been saying for some time, if you have hedges to make now is an excellent time to do so with a known risk strategy in the Dec ’09 contract. We effectively have puts in place to keep the downside covered along with leaving the upside open in the event we do have a break out to the upside. My personal opinion is that we break out to the downside but the market has been stubborn and range bound for three weeks so it is anyone’s guess.
The US Dollar Index didn’t do any favors for us today as it was up strong on the day has reached a cycle low on the daily chart today. The action we had last week was positive from a weekly close perspective so it looks to me that we should see a rebound in the Dollar over the coming weeks as the weekly charts are also at the bottom of a cycle low. If this indeed is true and accurate we should see commodities back off due to the lack of outside funds dumping money in the commodities markets.
Bottom line: I’m looking for the market to make an early high tomorrow.
Dec ‘09 Hogs – Support/Resistance for 10-27-09
(R3) Resistance 3: $55.40
(R2) Resistance 2: $54.40
(R1) Resistance 1: $54.00
Today’s close: $53.425
(S1) Support 1: $53.00
(S2) Support 2: $52.40
(S3) Support 3: $51.40
(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.