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How we spend our days is, of course, how we spend our lives.
Annie Dillard
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Commentary |
It is becoming very well known that the country's winter wheat crop is in the worst shape for this time of year since USDA crop ratings began in 1986. But bullish wheat traders are also citing threats to wheat crops outside the U.S., including from excessive rain in Argentina. Rain has also delayed the harvest and raised quality issues in parts of Australia. In the northern hemisphere, wheat conditions in northern Europe and parts of the Black Sea area were fairly rough ahead of the winter. For the US winter wheat crop, it's getting too late in the season to really improve it much before it goes into dormancy. Wheat futures also rose on concerns about delays in corn planting in Argentina due to rain. That will reduce corn production in the country, and tighter world supplies of grain could add to demand for wheat as a corn substitute in animal feed. Wheat's recent rally began from the bottom end of its current trading range. This trading range has been so choppy that it could quickly run out of gas in the short term like it has done so many times before, although wheat prices are likely to rise in the longer term.
Friday is first notice day for December futures and prices are still sideways and range bound for corn and wheat, and despite the recent rally in soybean values, the market is still in a downtrend. Short term resistance lies from $14.60-$14.75 in January. Technical resistance in corn is likely to continue above $7.60-$7.76 basis December. In the short term expect to see corn/wheat trade to continue within their ranges until/if South American weather breaks better or worse from the current pattern. Corn should be the first beneficiary if conditions remain too wet in Argentina (loss of acres) and too dry in southern Brazil (loss of yield). As we near the key crop reports in January, look for some premium added to corn/wheat as the world deals with acute shortages in feed grains, with the EU expected to ramp up corn imports early next year.
The US dollar is coming up on the first trading day of the month (plus or minus a few days) where it makes a change of trend. Whatever direction it is heading next Wednesday is likely the way it will keep heading for two weeks.
US Dollar Daily Chart
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Corn |
In the last newsletter we said corn should head to 765-768 and the high has been 767. As you can see on the chart below, that value is extreme resistance. A set back to 748-751 is not out of line before a push through can happen.
March Corn Daily Chart
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Beans |
Beans continue the rally that got underway in front of Thanksgiving. With seasoal lows in, the first real reasistance is at 1485-1490. 1410-1415 Is strong support if a hard computor slam is generated.
Jan Bean Intraday Chart
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Wheat
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KC wheat held support last week and in Mondays letter we sad it just now needs a push. Look at what happened. We contine to find support where it needs to be and we have to expect that 960 will eventualy get tested. The question will only be, how much of a pullback do we get befoore it goes through resistance. Price trends are up into the fist of January
Kansas City March Wheat Daily Chart
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Live Cattle and Feeder Cattle |
Cash activity is still quiet for the week, with firm asking prices of 130+. Choice beef is pushing 197, and packer margins are $76 in the red. Seasonally, this is not a great time for cattle prices, but who knows?....the rules constantly get re-written. Futures remain range bound, and prices will probably get worse before they get better. All eyes are focused on the weather. When the drought breaks, look out above.
December Live Cattle Daily Chart
January Feeder Cattle Daily Chart
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Gold
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Wednesday gold was clobbered by at 8,000 contract sale in one minute. The fact that it did not recover like silver today, implies there are more sales ready to happen. A shallow 3 wave rally before a break like that says that initiated buying is weak. We are still in a sideways grind with a break below 1700 a possibility.
February Gold Daily Chart
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Crude |
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A saucer bottom formation can be seen starting to form on the chart. For the January contract 85.00-85.50 is becoming solid support. Even Wednesday's hit found legs in that support. A close over 90.00 projects resistance at 94.00-94.50 to be challenged.
January Crude Oil Daily Chart
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11-26-12
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NOTE: With the exception of livestock, all trades will be entered in the electronic markets unless otherwise noted. Hedge recommendations and Trade recommendations are totally separate, and may sometimes conflict with one another. It is strongly suggested that Spec trades and Hedge trades be done in separate accounts.
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A word to the Wise
Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable to Heartland Investor Capital Management , Inc. but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK of LOSS involved in trading futures and / or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL . NO LIABILITY on the part of the author exists for any trading loss you may incur in the use of this information. The information contained in this newsletter is privileged, confidential and protected from disclosure. Any further disclosure or use, distribution, dissemination or copying of this message or any attachment is strictly prohibited.
Newsletter provided by Heartland Investor Capital Management, Inc. a registered CTA with the NFA, of which Eugene Graner is principal. This entity is a separate legal entity from the Introducing Broker Heartland Investor Services.
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