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CORN – May ‘10 Electronic
Open – $3.58, High – $3.59 1/2, Low – $3.54 3/4, Close – $3.57 Up $.00 3/4
Thoughts – Long Term (into June ‘10) – Sideways/Lower
May ‘10: The corn market has drifted since I last posted and closed below $3.59 last week and if it does this week again then we could see some additional selling pressure. The USDA is releasing its March 31st planting intentions report on Wednesday morning which should give the market something to talk about for awhile. Based on the way the charts look to me it would suggest a negative report but lets never count the USDA out!
Profits are still offered by the hog, corn and meal markets so if your profits look good you may want to think about locking those profits in or at minimum using an option strategy to limit risk. Things feel all warm and fuzzy right now because the market is where it is but remember how fast it can be taken away!
Bottom line: I am looking for the market to experience an early high tomorrow and then fade as the session progresses.
May ‘10 Corn – Support/Resistance for 03-30-10
(R3) Resistance 3: $3.66 3/4
(R2) Resistance 2: $3.62
(R1) Resistance 1: $3.59
Today’s close: $3.57
(S1) Support 1: $3.54 3/4
(S2) Support 2: $3.52 1/4
(S3) Support 3: $3.47 1/2
MEAL – May ‘10 Electronic
Open – $273.00, High – $278.00, Low – $272.80, Close – $276.90 Up $6.00
Thoughts – Long Term (into June ‘10) – Sideways
May ‘10 meal: As I mentioned in my last post, meal was respecting the $254.00 support level as we only closed one day below that mark and here we are $20.00 higher. The meal market is beginning to build a stronger and stronger technical picture but a major level of resistance is $283.60 that the May ’10 contract will need to close above for two consecutive days before I look for $300.00+ meal again. I have the May ’10 contract moving higher into the middle of April.
Bottom line: I’m looking for the market to experience an early high tomorrow.
May ‘10 Meal – Support/Resistance for 03-30-10
(R3) Resistance 3: $286.30
(R2) Resistance 2: $281.10
(R1) Resistance 1: $279.00
Today’s close: $276.90
(S1) Support 1: $273.80
(S2) Support 2: $270.70
(S3) Support 3: $265.50
HOGS – Apr ‘10 GLOBEX
Open – $71.40, High – $71.90, Low – $71.15, Close – $71.875 Up $2.20
Thoughts – Long Term (into April) – Neutral/Lower
Hog margins continue to show some profit for the coming year. If you would like to run a profitability crush for your operation, email us at firstname.lastname@example.org.
Apr‘10 hogs: (the following comments refer to June ’10 hogs) Hogs started off big this morning and never looked back in the deferred months as most of them closed up limit. I have to say that I’m not impressed with the overnight market action nor the trading levels today. Synthetically we were only trading approximately $.80 above the limit up $3.00 move in the June ’10 contract. So when you figure in the price of options the market was trading $3.80 higher today instead of $3.00, however, the futures will only reflect the $3.00 move.
We left a large gap this morning on the electronic chart which has become very hard to do when the market trades 23 hours a day. We also left another gap tonight as we opened the market at $82.525 and we have been trading lower than those levels ever since. Call me a skeptic but I’m not bullish the charts until we get two consecutive closes above $83.50 in the June ’10 contract. Technically we should also come back and fill the gaps we left at $81.025 and $79.775 at sometime in the future.
I typically do not like to make any trading decisions on an “event” day as I call them because the market is littered with emotion. Friday’s report was bullish from a report perspective but weights are up and we are also losing the John Morrell packing plant in Sioux City, IA in April. Today was fun but please try to stay grounded and look at your operation from a business perspective and not how high can the market go.
As and if the market rallies, be looking to set profitable floors with some out of the money put options or selling futures and buying an out of the money call option. It was about a year ago when the H1N1 story broke and we all remember what that did and how long it took to recover. I’m not saying we are heading $10 cwt lower I am just trying to be realistic and now that there is money and good money at that in pigs take a strong look at managing your downside risk!!!!! Visit with someone you trust about a plan to minimize your downside exposure to the market, it is usually easier to do this when the market is trading higher versus when it’s trading lower.
Bottom line: I’m looking for an early high tomorrow.
Apr ‘10 Hogs – Support/Resistance for 03-30-10
(R3) Resistance 3: $73.15
(R2) Resistance 2: $72.40
(R1) Resistance 1: $72.125
Today’s close: $71.875
(S1) Support 1: $71.40
(S2) Support 2: $70.90
(S3) Support 3: $70.15
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