After yesterday’s turn-around-Tuesday, where we saw a sharp round of profit taking, the grains resumed their charge higher…Nov beans opened higher, posted an early low and then ground higher all day, with some volatility thrown into the mix. We saw Nov open at 985 then trade to a new multi week high of 914, backing off a little into the close to settle up 26 cents at 1008-1/2..
Dec corn opened on its low of 387,traded to a new multi week high at 403 1/2, then settled at 398 1/4, up 13 1/4 cents. Dec wheat opened on its low at 521, saw a high at 547 and settled up 25 cents at 542 1/4…
More wet weather is impacting harvest, and the 6 to 10 day looked wetter than normal…Also, for better or worse, it seems that the markets absorbed the Deutche Bank Index Fund re-allocation of their corn and wheat positions, shrugged off the selling and rallied higher.. An especially bullish factor, it looks like..
Soy beans were able to shrug off the recent devaluation of the Brazilian currency, making their beans more attractive as compared to US beans.. This should have had more of a bearish impact, and the fact that the US market shrugged it off should be a sign of underlying strong bullishness..
Gold had a nice bounce today, along with crude oil… Dec Gold opened at 1055, broke to a low of 1048 then rallied 20 bucks to 1066…Crude oil opened at 7769, posted a low at 7764 then had a rally up to a new multi week high at 81.26…
This was fueled, cyclically, by a small retracement in the stock index futures, but I think more importantly is the markets’ digestion of the key 10,000 level in the Dow and 1100 level in the S&P500. The Dec Dow was currently down just 75 points at 9925, and the SPZ was down 6.40 at 1083…
We will have to see how the rest of the week balances out in these indexes, as crude makes new highs, and the US currency continues to come under some selling pressure.
All in all, it looked like a bullish turn of events for the SX, with SX popping above its resistance in the pennant formation I spoke about. It looks like the 1035 level to 1040 level is on the next target for the bulls, which could be fueled with more talk of harvest delays due to increasing wet weather..I time to buy the dips..
Good Trading