The grain markets closed in Chicago, all slightly higher across the board, with some fresh buying support coming in the day after a sharply higher day yesterday…
Generally though, trade was choppy and saw light volume… We continue to await the Big Freeze coming Sunday…
If it materializes, it could impact between 300MM and 600MM bushels of corn, as we are still in harvest mode.. With a crop over 13Billion Bushels, though, it should really have a negligible long term affect on the overall supply picture…
While CZ settled today at 359 3/4, there is still a lot of resistance (thirty cents worth) which this market has to overcome for the longer term trend to shift to bullish…Short term, the trend is cautiously bullish, but it remains to be seen what the Freeze will truly accomplish, and 2) if the demand situation will change if the dollar continues to melt like an ice cream cone on the fourth of July…
December wheat settled at 663 up 3 cents, and it still has a lot of work to do to get back above the 485 to 495 level,… The 500 level, if we see it, will undoubtedly have a lot of pressure up there, if for no other reason than its one of those nice round numbers which attracts a lot of trade, both buying and selling…Like ten dollar beans…Those round numbers are self-fulfilling areas of resistance,,, Like 10000 in the Dow…
Speaking of the Dow, it has been in a Narrow 60 pt trading range today, as we await retail sales figures tomorrow, and we head into the long Columbus day holiday weekend… My general feel, is that everyone is looking for bad numbers… as earnings keep being posted this week, it continues to look like the nay-sayers are still looking for the other shoe to drop in this economy..
Add that to the usual ‘October hysteria’ and the set up is all ready psychologically bearish.. That’s why I think the best tact to take is to anticipate a surprise to the upside..That is where the herd is not looking presently,and these markets have to climb a wall of worry… at the 9700 level, there is only 300 pts left to get us up to test the 10000 level…I just think that level is beckoning above…
Back to the Grains, The main story is and will remain the continuing harvest pressure, the fact that index funds will have to be net sellers at some point this month to honor the new position limits enacted by the CFTC, with the third element of either 1) wet weather delaying the harvest, or 2) a hard freeze which could lower some of the yields if it is severe enough…
Like I wrote yesterday, though, I think it would take a freeze of biblical proportion to impact a 13 Billion Bushel Corn Crop and a 3+ billion bean crop…
Once again, this is just my opinion, and all I can offer is 16 years of trading all kinds of different markets to look back on and reference for future potential moves…
Good Trading