Joined: Mar 2010
Posts: 57
 
  Viet Nam
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 Nov 29, 2010, 10:35:17 PM | #1 |
Before doing your daily work: checking the daily grain price reports - just have a full view of it from the market review analyzed by Pitguru Matthew Pierce in the new week to plan your investment! I will not take your time, I will let you with the market analysis right away.
The Grains Review
For the week of November 29th, 2010
Friday saw a rather lackluster options expiration with the market remaining in a tight range all session. No real move against any high volume strike in corn left the trade directionless with the macro side quiet as most banks were closed. There was minimal fresh information from the fundamental side after export sales with many also taking the day off. Heading into the weekend the trade was looking at weather problems in the US plains and Australia, issues with Irish debt and the impending retail sales from Black Friday. Over the weekend the trade saw limited fresh fundamental information with the weather woes remaining with SE Australia again added to the watch list. This morning saw retail sales come in strong but a weak Euro against the USD hampered momentum in both equities and commodities as early gains were pared overnight. Today the market is looking at a significant rally in palm oil (+107), a fresh Jordan tender for (milling) wheat and barley, weather issues in Argentina growing more significant and the impending month end. The day session looks to open inline or weaker than the overnight as the Euro continues to decline with talk of Greek debt extensions hitting the market early today.
Beans (F) are called Flat-2 Higher staying in the middle of the established range fighting to reach the 20-day MA this week. Currently sitting at 1257.00. Corn (H) is called Flat-2 Higher trading back above the 50-day MA sitting at 553.50. Indicators have turned into a strict positive stance at the bottom end of the range. Wheat is called 2-4 Higher sitting in the bottom end of the recent range. The upside target is the gap between the 100 and 50-day MA’s sitting between 715-724. Indicators are at the bottom end of the traded range. Meal (H) is called Flat-1 dollar Lower losing steam as palm oil rallies. The 20-day seems to be offering resistance at 345.40. Bean oil (F) is called 30-50 Higher rebounding off the 38.2% retracement test last week. I believe indicators are again in the corner of bulls.
Looking at weather, the US plains have no relief in sight and now it’s going to get interesting. With extended rains in SE Australia ruining the quality of their crop the press for high protein wheat is in full gear. I think the US white wheat basis should move higher over the next 2-3 weeks as the pull to the PNW eliminates domestic wheat availability. The problems in Australia continue to get worse with additional rains expected this week hampering wheat harvest and hammering quality. This is not a quantity issue as much as quality. The weights will be there but the protein will not. Weather in the NW remains biblically dry adding to the overall woes of the protein wheat market. Weather in Argentina is garnering attention with no rains expected 10-days out. This is the opposite of Brazil with better than expected rains this early in the season allowing for a great start. The dividing line seems to be the national border.
All in all I expect the market to take a breather this week. There is limited information due out from the fundamental side and with only month end on the macro side there isn’t much there either. The feeling is one of consolidation with the upside the path of least resistance with wheat looking like the undervalued commodity. Bean oil should gain against meal following the technical bottom formed last week. Corn should hold the long term support line as seen on the attached chart. Beans should hold ground but lose to corn as Chinese demand tapers off due to flagging crush margins. Take the chance to look at selling volatility with this overly inflated following the December options expiration. |
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