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Corn – We gave back most of yesterday’s gains in the corn today and we had pretty good volume. I said yesterday that I’m a short-term bull through the end of April and I’m sticking with that thought unless we close below $3.43 1/2 tomorrow, then all bets are off. It looks as if the market has some downside remaining for tonight and early tomorrow but then that should do it for now based on hourly charts.
My cycle indicator is still pointing higher for the balance of April and I would agree with it but again I think any reasonable rally could be met with good producer and professional selling. Tomorrow I’m looking for the market to make an early low and trade sideways to higher tomorrow.
Bottom line – The intraday charts suggest corn makes an early low tomorrow. Now is a good time to buy call options on corn and buy cash hand to mouth until fundamentals change.
Meal – Today gave back some of yesterday’s meal gains but didn’t do any technical damage to the charts. I’m still of the opinion that the meal market will remain on solid footing till the end of April before we find a short-term top.
If the May ‘10 meal contract wants to continue to move higher then I would say we would need to close above $263.30 tomorrow. If we do close above this level then we should see follow through to the upside next week. The weekly charts are looking for support and so far its been holding the $260.00 level.
Profits remain strong so it never hurts to buy calls to make sure you have a cap on your feed costs, I would suggest taking a look at calls for both corn and meal so you know what your ceiling is for feed costs.
Bottom line – The intraday charts suggest meal makes an early low tomorrow.
Hogs – I’m not sure how long I can continue to say we are seeing warning signals in June hogs without readers rolling their eyes but again, another warning signal today. My opinion of June hogs hasn’t changed, I think we are going to get a break to the downside in this market in the coming weeks.
When the market moved higher as a result of the Quarterly Hog & Pig report, there were gaps left on the electronic chart which is very rare. The Globex trades twenty three hours a day during the week so if we get news in the afternoon reports the market is still trading so it makes its move then before it closes at 4:00 pm CST therefore leaving little if any gaps.
Gaps are usually technical targets at some point but the ones left recently are a ways below the market the market and I don’t think we will fill the first gap at $79.775 but I do think the second gap at $81.025 has a chance to fill because it is at the same level as a 62% retracement back to our most recent low of $78.075.
I’m not friendly June hog futures right now and it is possible I may be alone in that camp but it’s what the charts tell me based on the information I look at. The only way I become bullish June hogs is if we get a strong weekly close above $86.00 either tomorrow or next Friday. If we don’t get a strong close above $86.00 then I’m looking for a correction back to $81.975 and $81.05 before we find good support.
Cutout was higher by $2.03 today and the overnight trade is marginally higher in the June contract with excellent resistance at $85.15. Like I’ve been saying recently, now is the time analyze your operations profits and make business decisions to take some of this wonderful gift that we are getting!
At MINIMUM put options or a known risk strategy should be used to protect profits as well as protect against any events that have the possibility of popping up like H1N1 proved to us last year.
Bottom line – The intraday charts suggest hogs make an early high tomorrow.
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.