FIRST LOOK, by Duane Lowry
Friday, December 23, 2016
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SUNRISE OUTLOOK OVERVIEW:
At 4:06 am> Grain/Soy Snapshots: Corn= 3/4 lower, Wheat= 1/4 lower, Soybeans= 1/4 lower.
**Grains close early today, closing at 12:05.
**Grain trading resumes at 7:00 Monday night.
**Financials have regular hours today, opening again at 5:00 pm Monday.
*Where are we for the WEEK? (As of yesterday’s settlements.) March Wheat= down 12 1/4 cents, (Wasn’t it last weekend that we had a significant winterkill event over more than ½ of the US Plains wheat?), March Corn= down 9 cents, March Soybeans= down 42 3/4 cents, Crude Oil= unchanged, Gold= down $6.70, Dow Index= up 79, US Dollar Index= up 17.
Day Session Expectations vs Night Session Tone:
March Corn: Support= $3.40-47, Resistance= $3.65.
*Longer-term and short-term technical support exists at current levels. Further price erosion should be minimal. Upside potential is greater than current sentiment suggests. Current levels offer ownership opportunities.
March Soybeans: Support= $9.95-99, Resistance= $10.45.
*Short-term technical conditions can produce stabilization around current levels. I have no interest in any bearish stance, despite bearish fundamental profiles. A buying opportunity can develop around current levels.
March Wheat: Support= $3.95-97, Resistance= $4.35.
*Short and longer-term technical support exists at current levels. Current values offer ownership opportunities.
Outside Market Influences:
At 4:05 am> Price Snapshots: Crude was down $0.29, Gold up $3.10, Dow Index was up 3 and the US $ Index was down 15.
*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 known fundamental news is stale. The unknown fundamental factors are of far more interest to me at this time. Wheat has been saturated with bearish positioning/sentiment for months. At what is historically cheap values and after months of absorbing bearish sentiment, do you want to be long or short the unknown? I want to own the unknown. Short and longer-term technical support exists at current levels. Upside potential is easily 50 cents from here. Downside risk seems manageable. Current values offer ownership opportunities. I am only interested in trading this market from the long side at this time.
Corn downside energy of the past several days appears to be stalling. News is stale. Short and longer-term technical support exists at current values. Users have ample reasons to seek ownership. Producers have little incentive to make sales. I have no interest in any bearish stance. Current values offer ownership opportunities. Upside potential could be 30+ cents from current values.
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 encourage a search for ownership opportunities. Longer-term technical support exists at current levels. I have no interest in any bearish stance at this time.
In summary, wheat and corn have technical conditions that encourage a bullish stance. Wheat should find inter-market support and could be setting the stage for a significant upside run during the next 60-90 days. Soybeans have bearish fundamental profiles, but they are the same profiles that existed when soybeans bottomed ahead of harvest and proceeded to rally more than $1.25. 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= 3.65
**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. Upside target is something into the $3.80 zone. IN SUMMARY, search for ownership opportunities, as upside potential is greater than current/recent discouraged sentiment suggests.
Barge Values: Dec= +38 F
SH: Support= 9.95-99, Resistance= 10.45
SMH: Support= 310-13, Resistance= 330
BOH: Support= 34.50, Resistance= 37.00
**PROFILE: March Soybeans> Recent price sliding activities may be nearing their end. Short and longer-term support exists at overnight levels. Recent price weakness is likely to be recovered during the next few weeks. Search near-term weakness for ownership opportunities. IN SUMMARY, I have no interest in any bearish stance, despite bearish fundamental profiles. Search for ownership opportunities.
Barge SRW Values: Dec= +33 H
WH: Support= 3.95-3.97, 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. Upside potential could easily be 50 cents from current levels. 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.