FIRST LOOK, by Duane Lowry
Thursday, December 22, 2016
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SUNRISE OUTLOOK OVERVIEW:
At 7:04 am> Grain/Soy Snapshots: Corn= 1/2 lower, Wheat= 1 1/2 lower, Soybeans= 4 higher.
*Export Sales data will be released at 7:30 this morning. Here are the trade estimates:
Wheat= 350-600 tmt, Corn= 700-1550 tmt, Soybeans= 1300-2000 tmt, Soymeal= 125-275 tmt, Soyoil= 5-30 tmt.
Day Session Expectations vs Night Session Tone:
March Corn: Support= $3.50, Resistance= $3.75.
*Longer-term support will limit the scope and duration of downside probing. Short-term indicators offers reasons to view current levels as offering ownership opportunities.
January Soybeans: Support= $?, Resistance= $10.60.
*I have no interest in any bearish stance, despite bearish fundamental profiles. A buying opportunity may soon develop.
March Wheat: Support= $3.95-4.00, Resistance= $4.35.
*Limited ability to build/sustain downside momentum. Current values offer ownership opportunities.
Outside Market Influences:
At 7:03 am> Price Snapshots: Crude was up $0.29, Gold up $3.10, Dow Index was up 13 and the US $ Index was down 31.
*Crude oil appears to have tipped over yesterday as suspected. This market has much more downside potential than rhetoric of the past few weeks have suggested. Charts warn of potential to quickly build downside momentum. Search small recovery bounces for selling opportunities.
*Gold has achieved price levels capable of producing stabilizing price action. I have no interest in any bearish stance from here forward. We may see additional price erosion, but it is now reasonable for longer-term bulls to return to the marketplace at this time. Short-term bulls may also find encouragement for ownership at this time.
*US Dollar Index has achieved some longer-term upside targets. Some pausing/corrective action is possible during the next several days/few weeks.
*Dow Index is in a bubble. This process will create a major and long-lasting top. Short-term technical conditions are poised for a downside turn and capable of building downside momentum. Charts appear very vulnerable to downside risks, with upside potential limited. Current levels offer selling opportunities.
Weather offers favorable South American conditions.
Wheat technical conditions are poised to soon turn price trends higher. Current values are very cheap and bearish fundamental profiles have been largely discounted for some time. Current values offer ownership opportunities. I am only interested in trading this market from the long side.
Corn values continued their erosion overnight. News is stale. I suppose that talk of Trump imposing tariffs on US imports and the fear that trade wars and potential harm to US exporters can be seen as weighing on US agricultural prices, but it is worth remembering that 85% of US corn production is used domestically. Technical conditions are not discouraging and the scope and sustainability of near-term weakness should be limited. Users have ample reasons to seek ownership. Producers have little incentive to make sales. I have no interest in any bearish stance. Current value offer ownership opportunities.
Soybeans fundamental storylines are bearish. I have no confidence in establishing positions based on the stale fundamental storylines at this time. Short-term technical conditions may offer some support today, possibly being able to reject overnight weakness. I have no interest in any bearish stance at this time. Bears can sell weakness and embrace bearish fundamental profiles at their own peril.
In summary, this is an awful time of year to get excited about any short-term signals and price action tone. Wheat, corn and soybeans all have bearish fundamental profiles, but this has been known and discounted for months. Sentiment is quite discouraged; believing that upside potential is limited. I have no interest in any bearish stance and I am only interested in finding ownership opportunities. Better price levels will unfold in the weeks/months ahead.
Barge Values: Dec= +33 H
CH: Support= 3.40-47, Resistance= 3.75
**PROFILE: March Corn> Short and longer-term support exists at current levels and will continue to provide support on further weakness. I have no interest in any bearish stance at this time/price zone. Current values offer ownership opportunities for users and speculators. IN SUMMARY, search for ownership opportunities, as upside potential is greater than current/recent discouraged sentiment suggests.
Barge Values: Dec= +38 F
SF: Support= ?, Resistance= 10.65
SMF: Support= ?, Resistance= 330
BOF: Support= ?, Resistance= 38.00
**PROFILE: January Soybeans> Short-term indicators suggest near-term weakness may be overdone. It won’t surprise me to see prices rebounding in the days ahead. IN SUMMARY, I have no interest in any bearish stance, despite bearish fundamental profiles. Overnight weakness may well be a short-term ownership opportunity.
Barge SRW Values: Dec= +33 H
WH: Support= 3.95-4.02, Resistance= 4.35
**PROFILE: Chicago March Wheat> Technical conditions are capable of turning price trends to the upside from current levels. Charts offer little incentive to trade this market from the short side. IN SUMMARY, current values offer ownership opportunities.
GLOBAL HIGHLIGHTS & HEADLINES: .
The risk of loss in trading futures and/or options is substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account.
This newsletter is prepared from information believed to be reliable. Early Market News, Inc. does not guarantee that such information is accurate or complete and it should not be relied upon as such. Opinions expressed are subject to change without notice.
© 2016 Duane Lowry. All Rights Reserved.