FIRST LOOK, by Duane Lowry
Thursday, December 29, 2016
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SUNRISE OUTLOOK OVERVIEW:
At 6:39 am> Grain/Soy Snapshots: Corn= 2 1/4 higher, Wheat= 3 higher, Soybeans= 5 higher.
*Export Sales data will be delayed until tomorrow.
Day Session Expectations vs Night Session Tone:
March Corn: Support= $3.48-50, Resistance= $3.70.
*Probes below $3.50 will be well supported. Current levels offer ownership opportunities.
March Soybeans: Support= $10.05-10, Resistance= $10.45.
*Support and buying interest will build above $10.00. It is possible that we could test/probe support around $10.10 at some point during the next several days. Search for ownership opportunities.
March Wheat: Support= $4.00-05, Resistance= $4.35.
*Support will surface around current levels, limiting the scope and sustainability of any near-term weakness. Overall conditions are capable of building notable upside momentum in the weeks ahead. Upside potential during the next few months is significant. Focus on ownership opportunities.
Outside Market Influences:
At 6:38 am> Price Snapshots: Crude was down $0.06, Gold up $6.50, Dow Index was up 2 and the US $ Index was down 35.
*Crude oil will stall out at current values and build trending lower action in the weeks ahead. Near-term strength offers selling opportunities.
*Gold has achieved price levels capable of producing stabilizing price action for a period of time. I have no interest in any bearish stance at this time. At the same time, I am unsure about a longer-term stance, as eventual further price erosion is not an unreasonable possibility. Thus, it seems reasonable to me to view short-term strength with skepticism.
*US Dollar Index has achieved some longer-term upside targets. Some pausing/corrective action is possible during the next several days/few weeks. Overall conditions remain capable of keeping the US Dollar well supported in the weeks/months ahead. Key support level is around 102.00, which is approximately 125 points below yesterday’s settlement. So, there is some short-term weakness vulnerability here.
*Dow Index weakness yesterday produced the lowest settlement of the past 9 trading sessions. We are finalizing the process of establishing a major and long-lasting top. Charts appear very vulnerable to downside risks, with upside potential limited. Current levels offer selling opportunities. Focus on selling opportunities.
Weather offers favorable/acceptable South American conditions. Dryness themes for the US Plains remain.
Wheat fundamental storylines are bearish, fully known and fully discounted. News is stale. The unknown fundamental factors are of far more interest to me at this time. I see merit in wanting to own the unknown. Short and longer-term technical support exists at current values, which will limit the scope and sustainability of any near-term weakness. Focus on ownership opportunities.
Corn news is stale. Charts are constructive. Support will continue to surface on any probes below $3.50, basis March, making current values appear to be ownership opportunities. The Short and longer-term technical structure has the potential to build upside momentum during the next several weeks. Users have ample reasons to seek ownership. Producers have little incentive to make sales. I have no interest in any bearish stance. Search for ownership opportunities. Upside potential could be 30+ cents from current values.
Soybeans will find good technical support on probes below yesterday’s lows. Overnight strength does not prevent this market from testing support below yesterday’s lows at some point during the next several days. Short-term technical conditions will provide support on weakness and limit potential for weakness below yesterday’s lows to build downside momentum. Fundamental profiles have been and remain bearish; but this has not prevented this market from staging impressive rallies, even during the US harvest season when fundamental understandings were only becoming more and more bearish. So, how can one be confident about trading bearish fundamental profiles? Longer-term upside potential in old-crop positions continue to have a brighter tech-based potential than trader sentiment suggests. I think we may spend a few days churning and testing support around/below yesterday’s lows. From that perspective, I have little confidence in strength today. Overall conditions suggest searching for ownership opportunities.
In summary, corn and wheat will be well supported around yesterday’s settlement, limiting the scope and sustainability of any near-term weakness activity. Soybeans could spend more time churning and testing support levels below yesterday’s lows.
Barge Values: Dec= +38 H
CH: Support= 3.48-50, Resistance= 3.70
**PROFILE: March Corn> Probes below $3.50 will be well supported. Upside target is something into the $3.80 zone. IN SUMMARY, focus on ownership opportunities, as upside potential is greater than current/recent discouraged sentiment suggests. Current levels offer ownership opportunities.
Barge Values: Dec= +45 F
SH: Support= 10.05-10, Resistance= 10.45
SMH: Support= 317, Resistance= 330
BOH: Support= 34.50, Resistance= 37.00
**PROFILE: March Soybeans> A test/probe of support around $10.10 will unearth buying interest. Search for ownership opportunities. Despite overnight strength, we may see more testing of support during the next several days. IN SUMMARY, I have no interest in any bearish stance, despite bearish fundamental profiles. Search for ownership opportunities.
Barge SRW Values: Dec= +34 H
WH: Support= 4.00-05, Resistance= 4.35
**PROFILE: Chicago March Wheat> Technical conditions are capable of building upside momentum in the weeks ahead. Search minor near-term weakness for ownership opportunities. IN SUMMARY, search for 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.
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