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CORN – Mar ‘10 Electronic
Open – $4.04, High – $4.10, Low – $3.99 1/2, Close – $4.08 1/2 Up $.04
Thoughts – Long Term (into February) – Sideways
Mar ‘10: Corn closed lower overnight but didn’t spend much time lower today as traders pushed the market higher for most of the day. We still have the double top in place at $4.25 in the March ’10 contract and until we close two consecutive days above that level I will remain skeptical of the market. The U.S. Dollar ended up holding the support I talked about at 74.94 and has rallied the past two weeks, this is concerning from a commodities perspective.
If the dollar continues to move higher we should see a draw back in fund buying for the time being. We have a long way to go before the dollar turns bullish, this could just be a correction in a longer-term downtrend but for now it is on its way up. I have a weekly cycle indicator that projects the dollar moving higher into September of 2010 but this indicator can change with price fluctuation over time. We will continue to monitor this market.
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 high tomorrow.
Mar ‘10 Corn – Support/Resistance for 12-15-09
(R3) Resistance 3: $4.27
(R2) Resistance 2: $4.16 1/2
(R1) Resistance 1: $4.12 1/4
Today’s close: $4.08 1/2
(S1) Support 1: $4.06
(S2) Support 2: $4.02
(S3) Support 3: $3.95 1/2
MEAL – Jan ’10 Electronic
Open – $306.30, High – $317.0, Low – $303.00, Close – $316.20 Up $9.70
Thoughts – Long Term (into February ’10) – Sideways
Jan ‘10 meal: Meal got a shot in the arm today after soybeans head north of $.20 higher on the day. The Jan meal market has been in a sideways trading range since the 20th of November. The range has been $302.00 to $319.80 and the longer we spend in this sideways trade the more energy is building for a breakout to one side or the other. $319.80 remains the key level of resistance for the January contract and until we get two consecutive closes above this level I remain on the skeptical side do to the strength in the dollar.
There was a sell signal in Jan ’10 meal today at $315.00 on a stop and the protective risk management buy stop would be placed at $317.50. We didn’t take this trade today because we are hedgers and need to buy meal but the signal was still there and I am pointing it out. We will watch this signal over the coming days. Now for some conflicting information I also have a cycle low projected for today but my cycle indicator is no match for random fund buying and selling. The bottom line is that I want to see two consecutive closes above $319.80 before I get too excited about major upside movement.
Bottom line: I’m looking for the market to experience an early high tomorrow.
Jan ‘10 Meal – Support/Resistance for 12-15-09
(R3) Resistance 3: $336.20
(R2) Resistance 2: $326.10
(R1) Resistance 1: $321.10
Today’s close: $316.20
(S1) Support 1: $312.00
(S2) Support 2: $307.10
(S3) Support 3: $298.10
HOGS – Feb ‘10 GLOBEX
Open – $65.50, High – $66.475, Low – $65.45, Close – $65.875 Up $.45
Thoughts – Long Term (into February) – Neutral
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Feb ‘10 hogs: The Feb ’10 contract traded higher today but failed to impress on the close. We’ve taken out the prior day high the last two trading sessions but we haven’t managed to close above a prior day high. The morning cash report had the national quotes over $2.00 lower but the regional quotes weren’t as severe and I expect the afternoon quotes to be slightly better than the morning numbers. I can make an argument for the market moving lower based on what most of my indicators say but we haven’t closed below any key numbers to take the market out of rally mode.
The Feb ’10 contract is stuck near the $66.55 area which is the 50% retracement back to the $84.00 contract high made in August of 2008. We closed above $66.55 for a couple of weeks and then failed to close above it last week. $66.55 is still a key resistance area that the market needs to get above and stay above and then our next target should be $70.675 which is the 62% retracement level. The market is still trending higher for now and trend is our friend so I have to stay friendly for now as the cash and cutout numbers remain firm.
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 12-15-09
(R3) Resistance 3: $67.975
(R2) Resistance 2: $66.95
(R1) Resistance 1: $66.40
Today’s close: $65.875
(S1) Support 1: $65.40
(S2) Support 2: $64.90
(S3) Support 3: $63.875
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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.