CORN – July ‘09 Electronic
Open – $4.07, High – $4.20, Low – $4.06 1/4, Close – $4.12 Up $.04 1/2.
Thoughts – Long Term (Into September ‘09) – Bullish/Higher
Tuesday I said: “I said yesterday we would have a possible test of $3.96 1/2, which was our low for the day, but I expected it later in the session but instead it happened very early in the day. Some of the projected rainfall that the Midwest is supposed to get is moving south out of the key area planting areas which should allow for further planting progress to be made. It is so hard to trade the bullish side of a “not getting planted” story anymore because of the technology we have to get the crop in as well as the genetics of the crops themselves to grow in almost any condition. I really don’t care much about it at all other than to sell when there is good premium in the market based off of this “scare”.
I am looking for corn to have a tad bit more downside tonight and early tomorrow but then should be it in the VERY SHORT-TERM (Wednesday/Thursday). I think we still have downside potential into the middle of May and then we start to trade sideways until we get our next big “scare” of weather. I believe the market is toppy at these levels and I wouldn’t want to chase it here, if you NEED upside protection do it in the form of a known risk option strategy, I wouldn’t flat out own futures at this level without downside protection.”
July ‘09 corn: As the market made new highs today I was stopped out of some short futures protecting equity in my long June ’09 $3.80 call options. If the market manages to close above $4.17 1/2 tomorrow then it could open the gates to search out the old $4.49 high we had in December 2008. If we don’t manage to close above $4.17 1/2 in the next couple days then we should make a retracement back toward the $3.95 to $3.89 area. We had good volume days during the markets up swing last week but have had lower volume during this week’s trade when the market was chopping around. I believe the corn market is near a crucial area of a possible breakout to the upside but we need to close above $4.17 1/2 first before I am comfortable saying it. The marketplace is still talking about wet weather but I don’t see that being an issue at the moment, I think money is just coming back in the market holding this market up.
Bottom line: I am looking for the market to experience an early low and a late high tomorrow.
July ‘09 Corn – Support/Resistance for 05-08-09
(R3) Resistance 3: $4.20
(R2) Resistance 2: $4.15 1/4
(R1) Resistance 1: $4.14
Today’s close: $4.12
(S1) Support 1: $4.08 1/4
(S2) Support 2: $4.05 1/2
(S3) Support 3: $4.00 3/4
MEAL – July ‘09 Electronic
Open – $345.60, High – $350.90, Low – $339.10, Close – $341.70 Down $3.30
Thoughts – Long Term (Into September ‘09) – Bullish/Higher
Tuesday I said: “First I would like to apologize for not updating the Open, High, Low and Close yesterday for meal, the prices that were entered were from last Wednesday. Similar to corn I believe in the very short-term we will experience some more minor downside pressure yet this evening and early tomorrow but from there we can see a pop in the market. The July ‘09 contract had an inside day today which typically means we should move in the direction of a break out tomorrow. The break out should either take out today’s high or low and the market should look to move in that direction. I still don’t want to chase this market and be aggressively long up here via straight long futures but I do want to have some coverage in place via a known risk strategy. I currently have $330.00 June ‘09 put options in place to buy against if we get a downward movement in the market. We have yet to get anything significant to the downside for me to buy futures to complete my strategy. I will be looking for opportunities as we move forward and will be paying close attention early tomorrow morning.”
July ‘09 meal: I look at the daily chart and the first thing I see right now is a small double top in the July ’09 contract. I still have $330.00 June ’09 put options in place to buy futures against if the market gets low enough but it hasn’t gotten to a point where I am extremely comfortable buying just yet. I am not an immediate bull up at these levels especially now with this little double top going on. I am looking for continued weakness tomorrow as we follow through from today’s mid/late session sell off. There is a good chance we could test $332.40 at some point in the near future.
Bottom line: I’m looking for the market to experience an early high tomorrow and a late low. I am still skeptical of the market at these levels but it’s stubborn as prices stay inflated for now.
May ‘09 Meal – Support/Resistance for 05-08-09
(R3) Resistance 3: $350.40
(R2) Resistance 2: $346.10
(R1) Resistance 1: $344.80
Today’s close: $340.90
(S1) Support 1: $339.20
(S2) Support 2: $332.40
(S3) Support 3: $326.80
HOGS – June ‘09 GLOBEX
Open – $67.00, High – $67.35, Low – $66.20, Close – $66.775 Down $.325
Thoughts – Long Term (Into August) – Friendly
Tuesday I said: “As stated yesterday we did have an early low today, coming in the first hour of trade and the high was near midsession although I thought we would make a high late in the session today. The June ‘09 contract found good support today even though we did make a new contract low by .075 today and the cutout was down over $1.00 last night. Again if you refer to my chart above it makes you wonder about the longevity of this flu story and how long those that want to suppress the market can actually keep it suppressed. As I review the hourly chart today to give some direction for tomorrow, it seems we should have continued upside in the June ‘09 contract.
The June ‘09 contract came close to having a bullish reversal day today but failed to close above yesterday’s high of $65.075. I had my cycle low last Friday in the June ‘09 contract and now it shows a sideways to higher movement into the middle of May 2009. Okay, the cutout report just came out and confirms (to me anyway) my thought of bogus fears in the hog product. The cutout was up $1.34 on 238 loads and the most loads we have had on any given day since January 1st 2008 is 183 so now you tell me who is not eating pork and where did all the demand go because of the H1N1 outbreak. The extended hour’s trade is currently up $1.82 which is .80 higher than where we closed the pit today. Cash was still lower today but this gives packers good margins again and if hogs don’t come to town they will have profits to go bidding but as well all know sometimes logic doesn’t prevail.”
June ‘09 hogs: I continue to believe there will be strength in this June ’09 contract as the market/industry recovers from the H1N1 flu stories that have plagued the news headlines and caused panic across the globe. As I have said I have a cycle indicator that bottomed out at the end of last week thus far it has been right as we see the market continuing its climb higher with the exception of the break we took today. Cash was much higher this afternoon compared to what the noon report showed and cutout was up $1.64 so we are seeing renewed demand for hogs and product. I fully expect hogs to keep trying to move higher tomorrow with positive cash and cutout information released this afternoon.
I do have to mention that there is a possible sell signal IF and only IF the June ’09 contract makes new highs above $67.35 and then drops back below it tomorrow. The signal would be to sell June ’09 hogs at $67.10 on a sell STOP and if the stop is filled then a risk management stop would be placed $.25 above the most recent high at the time of the fill. I don’t believe I will execute on this trade if it does materialize but I MAY change my mind and wanted you to be aware of what to expect if the market meets this criteria tomorrow.
Bottom line: I’m looking for the market to make an early low tomorrow and then make a late high.
June ‘09 Hogs – Support/Resistance for 05-08-09
(R3) Resistance 3: $68.95
(R2) Resistance 2: $68.175
(R1) Resistance 1: $67.375
Today’s close: $66.775
(S1) Support 1: $66.00
(S2) Support 2: $65.575
(S3) Support 3: $65.15
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