Joined: Mar 2010
Posts: 57
 
  Viet Nam
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 Nov 22, 2010, 11:47:01 PM | #1 |
As usual, check out the weekly grain market review analyzed by Pitguru Matthew Pierce to see how Bean, Wheat, Meal and other grain markets will be going to trade!
The Grains Review
For the week of November 22nd, 2010
Friday saw another smack down led by macro factors and talk of long liquidation. There was little support with cotton getting killed, precious metals and base metals both taking a dive and crude easing as well. Currency moves were the question moving into the weekend with Ireland the focus. The weekend brought initial bullish news for the Euro with a bailout program reached but public details are not available. Moving into Sunday night the trade switched over to China with all Dalian markets taking it on the chin. Palm oil also took a dive losing over 130 overnight. The fundamental news was quiet as well as the demand side so the trade has only macro factors again today with cotton starting off limit lower…what a surprise there. The whole commodity basket is not getting beat up like the Chinese markets did with crude feeling choppy and sugar actually higher. Metals are offering little so I expect a rather quiet session with the markets trading both sides of unchanged with the complex showing the only real upside leadership.
Today’s calls are Beans are called 8-10 Higher moving back into the middle of Friday’s range. Support at the range low of 1175.25 with the 20-day sitting at 1256.00 acting as first upside target. Corn is called Flat-2 Higher using the long term support line at 527 as a buying opportunity with the 50-day MA sitting at 550 (basis March) the front runner for Friday’s December option expiration. Wheat is called Flat/Mixed to start using the 200-day MA at 605 as LT support while using the 100-day MA sitting at 682 as the upside target. Meal is called 3-4 dollars Higher to start bracketed between the 50-day MA sitting at 324 and the 20-day sitting at 340.80. Bean oil is called Flat Lower to start bracketed between the 50-day at 47.35 and the 20-day at 50.93. Indicators remain strictly negative here.
Looking at weather, things are not getting better on the US plains. With a recent lack of rain, expect a drop in weekly crop ratings today with a move under 45% G/EX now almost expected by the trade. There is no rain expected 10-days out making this a dire situation in W. KS and W. OK. Australian weather is still hot and dry in the west with the east shaping up after recent rains. The situation is almost stagnant in the west allowing for a quick harvest but allowing farmers no chance to sow new crop. It’s getting late in the season but there is still time if rains do come. There is nothing in the forecast for 10-days out. La Nina is starting to show its teeth. Dryness in N. Argentina is again present with no rains expected through this week. This is an early problem but a problem none the less considering world demand scenarios.
Open Interest moved as follows: Beans +1316, Corn +15927, Wheat +4566, Meal +1228 and Bean Oil +2355. A bit of a surprise considering there was and continues to be so much talk about liquidation. I don’t see it, if anything I see people buying the break in corn, I do not attribute these gains to new shorts.
Indonesia is raising their palm oil export tax to 15% to take advantage of rising global demand and help stem consumption in an effort to curb food inflation domestically.
The week ahead should offer little in the way of fresh information here. Look for December volatility to erode as we sit inside established ranges. The corn market will offer the most interesting trade with the 500 and the 550 strikes holding similar interest with expiration on Friday. I know it’s a pain after the holiday but Friday’s trade should be quite dynamic. There is massive open interest in corn offering plenty of action. For those who like to play expiration make a stand early this week.
All in all, there is nothing on the table outside of the option expiration. The shortened holiday week features shortened session on both Weds and Fri. Look for a choppy trade with no ranges violated. I remain bullish long term but the next 30 days are up for grabs with volume swinging in and out of markets as we approach the end of the calendar year.
For more supports, get help from daily grains price reports! |
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