The corn market (basis December) peaked on 6/2/09 at $4.7350. We were targeting $3.08 as a bottom in the corn market. On 7/22/09 the market made new lows at $3.1475. Due to the "cooler idea" summer weather potential for high yielding crop production, the corn market has been pressured to the downside. However, last week the USDA stated they were going to resurvey a number of corn states for a better idea of acreage. The thinking is that it will reduce the previously reported crop production estimate. This could cause corn to remain in a trading range for the next few weeks.
There is another side to the "cool ideal" growing weather. This could lead to an early freeze? Some are beginning to think there is a possibility for an early freeze. If so, we could be looking at a lower crop yield that would be bullish for the market.
Its always been said the two most powerful components to the grain market are weather conditions and exporting. If the world economy proves itself to start moving forward as the equity markets are currently perceiving, this could also be bullish for the market as more corn is exported.
On the upside the initial resistance is $3.28 to $3.33. If it breaks above this range, the next resistance level is $3.36 to $3.45. There is a major resistance at $3.60 to $3.69
The initial support level is $3.25 to $3.21. If the market breaks this level it will probably test the lows of last week.
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The December wheat contract peaked on 6/1/09 at $7.2525. On 6/3/09 we received a longer term sell signal. By 7/7/09 the market had bottomed at $5.38 and has slowly tried to push higher as it appears to be building a base. This can also be seen in the corn and soybean markets. If the economy should prove to be stabilizing and recovering, the grain markets may find support in this situation. On 7/13/09 we received a new longer term buy signal. This past week the equity markets could be nicknamed "going back to the future". The earnings season is now underway and several companies are beating market expectations. The July Empire State Manufacturing Survey index was the best in a year nearing zero at -0.55 from the June report of -9.41. As the index moves into positive territory, it implies an expansion of manufacturing in the NY area. On 6/11/09, the DJ (basis September contract) peaked and has slowly been grinding downward. The last few days the market has been testing the May lows. In the final hours of trading today, the market began to recover from its sell off. During the final minutes of trading we did receive a short term long signal within a longer term sell signal. The Canadian dollar peaked on 6/1/09 at 92.75 (basis September contract). On 6/5/09 we received a longer term sell signal. As the C$ peaked, we saw commodities peaking out soon after in early to mid June. Since the beginning of May the equity markets have been caught in a trading range. And since May, many have called for a consolidation of the equity market as the market quickly became overbought. There has been a debate whether the consolidation would be a consolidation of pricing or would it be a trading range, thus creating a temporal consolidation until the economy catches up with the market. Up to this point the consolidation has been temporal as the market has moved sideways. NYSSA’s Institutional Asset Management Committee presents “An Evening of Cocktails and Trading” The New York Society for Security Analysts will be hosting: For those interested in the behavioral and psychological aspects of trading and research, you may find some interest in the CME Group’s July 15th event. |
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