|
Friday December 30th - 6:30 PM - Last time
this year!!!
Corn - OK...Here is what
happened today...We started down and finished sharply higher with corn
up 5 cents as the funds came to close out profitable positions for the
year...ringing the register!!! What happens next Tuesday is going
to be very interesting. I want to sell this market Tuesday if we
open even close to where it closed. This market rallied 6
cents in the last 20 minutes and 4 cents in the last 2 minutes. I
wouldn't have been able to sell the market at the close even had I been
sitting at my desk which I wasn't. My guess is this is an
aberration and will be quickly corrected next Tuesday.
Bean - Up four cents with the
corn but its not a pretty picture here. More selling is probably
ahead.
Rice - Rice closed up only 4
cents after being up 13 at one time. This market is moving back
and forth over the old resistance points as sellers are determined to
keep the market from moving too much higher given the current
fundamentals. We will buy breaks here but need more than what we
have gotten and to be honest, we may not get that break.
Natural Gas - Nothing here
today. Look for weather coming into the new year to set the tone.
Cattle - No change ion comments
here...I just don't see any risk to owning cash cattle right now.
DOW - We are bearish here for
now and want to buy a big break...maybe we are thinking too far but
10,400 would be nice.
GOLD - We remain friendly
and want to buy breaks.
Thursday December 29th - 6:30 PM - PLEASE
READ 12:30 Update Below
General Comment - The
market sold off in the last 15 minutes today with corn down 5 and beans
down 13 to 14 cents. We may see some follow through tomorrow
but rallies now should be sold until we test the support level. We
are short corn and will hold those positions for now.
Rice - Market sold off in
sympathy. All we can say here is to buy breaks. We'll see if
we can get one to buy. A break in the market where
PB is 40-45 is where we would
buy in some more positions. Read our early comments from today
below.
Thursday December 29th - 12:30 PM - Early
again!!!
Corn - As I type this the market
is down 3 1/2 cents but it may not hold this big of a break all day.
We are going through the "Oh I missed it" time in the market and it could
last a few days. In general, those short are saying, I missed the
rally so let me buy my short in now, and those who rode it up long are
saying, I missed the top so I'll sell it on any rally and the
locals make the killing in the middle. As I said last night
(please read it if you haven't), this run is about over and we will see
the market move back to support over the next few weeks. I can see
the funds come in to buy corn but when they face the USDA report in a
few days they may not be very aggressive after Wednesday of next week.
Argentina is talking about dry weather but I doubt much premium can be
put in the corn on that news for another few weeks.
By the way,
PB on the 30 minute chart went
from
91% to 50% on the correction today. That is where the market found
support and the indicator is still over 50% going into the last 40
minutes of trade. We could rally and test the highs again now that
the overbought indicators have balanced. It will be interesting...
For you holding shorts on corn which you want to sell in January, hold those positions.
Bean - Last Nothing here today
but remain in the corn/bean 3 to 1 bear spread. (read last nights
comments) We put it on at 26 cents premium corn and today its 21
cents so that's not too bad for one day. If it gets to 14 cents we
will consider taking it off. It is just a fun trade, nothing
major. I still see beans in trouble later this year but there is
some dry weather talk in Argentina. That could keep the market
supported near term.
Rice - No follow through today
sets up some profit taking in rice. We will buy breaks here.
Longer term, rice has problems for the bears in the market. We can
see acres down 400,000 acres next year which would almost wipe out the
carryover in rice.
Natural Gas - Still warm weather
dominates the landscape here. We will buy another break if we can
get it going into next year.
Cattle - No change ion comments
here...I just don't see any risk to owning cash cattle right now.
DOW - Nothing happening....
We are no looking to sell rallies here. The inverted curve is
signaling a slow down. Will it mean recession?? Don't know
but it sure as heck signals a slower economy that the last 4% plus GDP
number we got. A slower economy signals a down turn here.
One that we will buy for the longer term.
GOLD - Nothing new here
either. We are out on our short term spec system but long for the
long term and will buy more on a nice break if we can get a good
signal to do it. My bias remains bullish long term and long term
traders should remain long.
Wednesday December 28th - 2:00 PM -
Corn - Open Interest has dropped
from 106,000 contracts to 71,000 in the last report and yesterday's
action actually saw the open interest go up. Today's action may do
the same but again things are very slow in Chicago right now. We
have sold 2/3rds of our corn sales for January as the market rallies
here and are following the market with a sell order but all of a sudden
we are hearing that hedge funds will enter the grain market after the
first on the buy side to own all grains for a possible shift in price
support zones, or in other words, a general commodity bull market.
While that is possible, I think the we are too far from plantings to
make a major shift into a bull market right now. Farmers are
holding corn and will until they see the price peak and start to move
lower. I think the January USDA report may trigger some selling in
the corn market; however, look at the wheat. If it stays dry and
warm in the Mid-west, things may get interesting for the wheat cop and
that too could move corn prices higher even with a bearish S&D report
this month.
Bottom Line: This run is about over but the
break from here may not be that great.
PB on the 30 minute chart is at
91% and that is a major red flag indicating a correction or a time of
consolidation is eminent. We want to own corn but not here and not
right now.
Bean - Nothing here so we wait.
By the way, the 30 minute
PB for March beans is 58%.
Compared to 91% for corn....how about long beans and short corn on a 1
to 3 ratio? We'll try it for a couple of days and see it it works.
That's 6.22 to $6.48 ( $2.16 x 3). It's a 26 cent spread and
we'll see if it holds. The spread was at 14 cents on 12/21.
Interesting, don't you think???
Rice - WMP - Up 6 cents
yesterday....Rice moved over resistance on a quiet day and now we wait
to see what happens in the way of follow through tomorrow. We
remain long and our target is just 7 cents away. My thinking
is that the target will be surpassed if we can hold over the $8.20 level
in March. Remember, a target does not mean that the price will
stop there, it just means the market should trade at least to that
point. With the sideways action the last few weeks in rice we
could move toward the $8.50 level. Longer term, the rice price
need to go higher to buy acres which right now are being forecast down
15% in 2006. That would wipe out 80% of the carry over and set the
market to move toward $10.00 in the new crop.
Natural Gas - If you'll read
last nights comments you'll see we expected this bounce today. Now
we will see if the market can break into more of an uptrend with he
weather continuing to be very warm in the Midwest and many of the
northern states as well. The gap is still in place so a rally back
to $12.50 remains possible near term. Then it will be interesting
to see what happens.
Cattle - I just don't see any
risk to owning cattle right now. That is going to change in the
next several months but for now, we'll hold the long positions in the
field.
DOW - Still no Santa Clause
rally!!! There was little bounce today after the sell off
yesterday. Lets see if we don't test support again tomorrow.
We are no looking to sell rallies here.
GOLD - We took all longs
off today at $515 which had been bought at $497. The market could
work higher but I'm not trying to pick a top, I'm trying to make money.
The market is going to run into problems at $520 or so as we head back
into the topping zone made a few weeks ago. We'll watch and see
what happens.
Tuesday December 27th - 1:00 PM - BEFORE
CLOSES
Corn - Market is holding gains
of last week as we continue to see short covering. Once that end,
I expect a nice move to the downside which will be a buying opportunity.
Bean - No bad news IS bad news
for beans. No sign of weather problems south so here we are in no
man's land with short coming the main feature.
Rice - Buying early today but
can it hold. We still see the market over $8.18 and possible
headed to $8.35 in the next few weeks.
Natural Gas - WHOA!!! Big
collapse now in gas, aren't you glad your not long here!!! OUCH!!!
We will buy thins break but it looks like we could work toward the
$10.50 level now. Winter is not over guys.... Today's
current high is where I would buy in if I were short, which I'm not.
The bounce from down here could be a big one.
Cattle - Report was neutral no
matter how some want to say it was bearish. We all knew numbers
were going to be higher so the fact it wasn't that much over trade
guesses makes it a neutral number. We will see rallies here for
spring calf sales but things look in balance right now.
DOW - No Santa Clause rally!!!
This is exactly what we have been warning against as we have recommended
moving into cash from all fund positions the last two weeks.
Today's break is not good news for the bulls. We will sell rallies
as we are set to go lower over the next several weeks.
GOLD - We are holding
longs and have bumped our sell order at $512 (profit taking only) to
$5.15 and will give it some time. I like gold higher near term.
Friday December 23rd - 1:00 PM -
Corn - We sold corn today at
$2.14 and will wait to see if we can sell more higher. The risk
index is growing with a high indicator on the short term charts.
Bean - Nothing new here...read
last nights comments.
Rice - A nice rally at the
close. We still like the market from the long side and will buy
breaks.
Natural Gas - We did not get
support as the market collapsed today with a massive gap lower. We
will wait to see what the market does with this gap as it could end up
being a measuring gap.
Cattle - We still it sideways at
the top but there is a report this afternoon that could have a lot to
say how we trade the next few days. More on that later.
DOW - Nothing new here...read
last nights comments.
GOLD - Nothing new
here...read last nights comments.
Thursday December 22nd - 7:00 PM -
Corn - Market punched higher
going into the close and almost hit our target of $2.14. Tomorrow,
we will sell corn at $2.14 on another 25% of our cash corn position and
then see what the market can do from there. If we get some bullish
news from South America, we could pop another 10 cents but at some
point, the market is going to sell back off to find support and we think
that could be a nice break. remember, the January reports are
coming and traders may start thinking the USDA will change S&D reports
to show more corn. We'll see. For now, we will sell this
rally as we wait for more news.
Bean - We sold beans today
taking a nice little profit. The market held through the close so
we mat still work higher. The gap is at $6.50 in the March so we
are looking to see if we could push another 20 to 30 cents higher and
close that gap. That will be a place to sell beans near term.
Rice - Big export numbers today
started the market strong but the buying dried up and selling took us to
the lows and allowed the market to finished unchanged. There maybe
more selling ahead but a break here is still a buying opportunity.
Natural Gas - Bearish report
today gave us a nice break. We want to buy this one lower.
We will look for support at $12.50 and see what happens when we trade
there.
Cattle - More selling today.
We may have an intermediate top in place. We would love to sell
some of our spring calve sales here but I think we still may have
another push back toward the recent high in February.
DOW - Buying for the Santa
Clause rally continues. We'll see if the rally occurs next week.
If we start to work lower early in the trading week (starts Tuesday) it
isn't going to happen and the selling could be heavy. We took
profits in our short position here two days ago and now are looking to
re-short next week or the first week of January on a good sell signal.
GOLD - Feeling better
about our long position in Gold. We'll sell our longs (that
doesn't mean going short) at $5.12 if we can get there tomorrow.
Other wise we will are raising our stop to $502 which gives us a nice
profit.
Wednesday December 21st - 3:00 PM -
Corn - Nothing here today.
Market showed weakness but had buying enter late to keep it off its
lows. For now, we remain hopeful to see $2.14 in March.
Bean - We got the weakness we
wrote about last night but it didn't hold and the market came back to
put in a reversal. We went back long a little today when the
market went up on the day and ended up almost buying the high of the
day...not too good!!! Anyway, it looked like we were going to get
right back out but the market rallied into the lose so we sit a little
long tonight. We'll sell an advance tomorrow.
Rice - Last night I wrote to
look for the market to test support first and then try to go through the
resistance. That test is exactly what we are getting right now.
There is nothing really to talk about in the fundamentals so I'll stay
with my thinking that we will test then rally and break resistance.
We remain long abut not near our whole position so we'll buy a break if
we can get a real good one.
Natural Gas - Worked lower and
then came back to close higher. We still want to own it one
breaks.
Cattle - Market broke down today
and one has to wonder if this isn't going to be more than just a short
term break. Heck, even if we break back to $92 cents, this is
still a profitable level for you guys raising calves so stick with it.
We'll wit and see what the market gives us the next few days but for now
we are not in the market.
DOW - So now, its time for the
Santa Clause rally (see last
night's comments). I know this sounds stupid but it
either happens or it doesn't which means next week if we are not working
higher, I'll re-enter my shorts going into the end of the year. After
the first week of January, I want to be short here. This is
subject to change but I don't like the fundamentals for the first
quarter next year.
GOLD - Well, it did
exactly what we wrote last night...(read
last nights comments). I'm not bragging because I'm
long tonight and still could be wrong. It did what we wanted and
right now we have a little profit but boy am I nervous. I will put
a stop where I can't lose anything and hold thinking we could pop up to
the $515 level or even higher. I like the markets action right now
and my guess is we test resistance over the next few trading days.
Tuesday December 20th - 8:00 PM -
Corn - March corn has now had
two closes over the 9 weeks moving average and today hit the bottom of
our target window at $2.12. We sold corn at $2.11 on half of our
inventory when we couldn't test $2.121 a second time and are now waiting
to see if we can get one more push. Remember, the market should
start sideways for a while so buy signals are sell signals and vice
versa. We'll sell the other half at $2.14 if we can get there.
This is a futures hedge against cash.
PB is at 65%
Bean - A hook reversal down
today and the sellers were in control at the close. Look for more
downside but we'll have to see how aggressive the selling is tomorrow if
we get selling at all. We are short on the reversal and would
expect the market to try and prove that a down turn is a head with more
selling in the next few days.
PB is at 72%
Rice - WMP was unchanged
....$8.17 was the high today as $8.18 continues to hold the market from
advancing toward our $8.35 target. We may see another test of
support under the market before being able to run through this
resistance point. My guess is we will get through it and some
technical buying could push us into our target price.
PB
is at 60%
Natural Gas - Nothing new here.
The market is continuing to hold gains but there is a warmer trend
coming that could allow us a break in the price. It should be
bought. PB
is at 57%
Cattle - After yesterday's
action of consolidation, we were able to rally back today. I see
nothing to change the call for cattle to hold this level and maybe work
higher.
DOW
- We sold it yesterday and
remain short tonight. I must admit, the market is having a hard
time breaking and we are almost at the time for the Santa Clause rally
which normally starts a couple of days before Christmas or right after
the exchange holiday (which would be Monday) and then continues into the
first three days of January. The logic is that bonuses are being
invested and there are a lot of funds wanting to invest on the front end
of the year for a normal yearly appreciation. Tomorrow could see
the market try to start that rally and I will exit shorts if we move
over yesterday's closing price. After the first of the year of the
Santa Clause rally fails to materialize, I want to be short for the
first few weeks of the new year.
GOLD
- The break continued
today and we are looking for a reversal to go back long. Could
happen tomorrow but the market was weak all day today with no real
buying interest at this level. The low is probably below today's
low and that could be down around the $488 to $490 level. It is
possible that a major top is in place in gold but even with a major top,
a rally back into the $520 range is probable. We're going to buy
this break. Tomorrow, if the market is lower by 3 to 4 dollars and
then comes back and trades unchanged on the day, we will buy it and see
if we can't get a reversal on the day. If it closes lower then
today's close, we will be out. In other words, a dip early
followed by a rally that puts us at unchanged will trigger a buy signal
and we will go long. We will exit if the trade is a loser going
into the close.
PB is at 50%...this is
significant.
Monday December 19th - 2:00 PM -
Corn - Once again, the high and
low of the day were for the most part made in the first 30 minutes.
(35 to be exact) The market closed firm as the beans moves higher
into the close. $2.12 to $2.15 should stop any advance this week
in the March corn; however, the
COT shows a big short position
for the specs and funds. The cap will be where the commercials are
will to sell. My guess is we aren't too far from that right now.
Bean - As we said Friday, the
chart remains a little positive and has support the 19 cent move today;
however, we think any run here should be sold. Small specs hold
the biggest short position and they may be coming out right here as the
market puts the squeeze on them. Another 10 cents higher is going
to be into some commercial selling areas unless things are changing
south of the equator.
Rice - $8.18 continues to hold
the market from advancing toward our $8.35 target. I think it will
give way at some point but I won't die on the sword for this one either.
We firmed up a little on the close today but with WMP out tomorrow, it
may be a very slow trading session which is typical for a Tuesday.
Natural Gas - Are we good or
what??? Today's low was....$13.46, the level we said was support
and the market bounced right off of it today. Nothing new to do
here as we still see the market as sideways but the cold weather is
going to have a grip on prices just like it is doing to those who live
in the northern states (so much for global warming). We would
buy this one on a good break to the longer term support zone which is
under $13.00.
Cattle - Nothing new here.
The action today was consolidation.
DOW - We went short the Dow
today as soon as it went down on the day. It still has 90 minutes
to trade as I write this and if it closes back up on the day, I won't be
in it as I have a stop which gets me out at break even. Longer
term we remain bearish but want to buy a big break here sometime before
next summer.
GOLD - We took off longs
here today but not near as nicely as we should have. We were
stopped out with $1.00 profit in the trade just because I wasn't going
to let a nice winner become a loser and that is exactly what would have
happened. If I'm going o be wrong, I want to be wrong OUT of the
market not in it. We will buy this break.
Friday December 16th - 2:00 PM -
Corn - I wonder how long this
can go on. Look at a 30 minute chart of the last several days.
We start strong, fade through the the next 2 to 3 hours and then firm
back up over the last 60 to 90 minutes. It did it again today.
We still see an outside shout at $2.10 to $2.12 in March before another
round of selling but things are headed into the dead time of year;
however, there has been Christmas weeks where things were hopping.
I'm not expecting that and in fact, I see the market slowing down even
more.
Bean - If you look at a 30
minute chart on beans, you can really see that we are sideways and
consolidating. We have spent almost all of our time in Monday's
first 30 minute trading range. This bodes well for a little higher
move as we have not been able to take out the gap on the chart.
Not that we are going a lot higher but it looks like we could run up
another 20 to 30 cents. Right now, I'd be a seller on such a move.
As I said last night, we are not trading and don't have a real good feel
as the market could go either way. Put a gun to my head and I
would say, "pull the trigger".
Rice - $8.18 continues to be
major resistance and the market is setup to pop over that early next
week. Doesn't mean it will happen but it certainly is setup for
it. I like the close today as no selling showed up after
yesterday's hook reversal up. A move over $8.18 should allow the
market to test $8.35. As I have been saying, I'll be taking off
longs starting at that point.
Natural Gas - The 13.46 level
held today so we don't get a weekly reversal but we still get a weekly
hook down formation. We still see
the market sideways and cutting trend traders to pieces. We would
buy this one on a good break to the longer term support zone which is
under $13.00.
Cattle - Still going. We
are now fully long in the field. We may want to hedge some spring
calve sales in the future as the market continues to sizzle.
DOW - Ho Ho Hum!!! The
Christmas rally is about over if it ever existed. We want to sell
this market but not yet. We'll look at the market Monday to see if
anything is changing. For now, we will hope for last gasp rally
before the end of the year.
GOLD - I'm still long at 507.20
but very lightly. Today's low of $496.80 will be the area of my
close only stop next week but I still like a bounce back here near term.
The chart looks like its primed for a technical bounce..
Thursday December 15th - 2:30 PM -
Corn - As we said last night,
March tested $2.05 and found little support. A close back under
$2.04 sets up a test of $2.00 over the next several weeks. We like
buying breaks here. When it looks the worst, we'll be buying.
Bean - Follow through to
yesterday's reversal. We could sell off another 20 cents if $5.90
is taken out in the March. Again, I don't have a lot of confidence
in trading beans right here so I'm not suggesting any direction. I
can see it either way but we need some bullish news to really be able to
rally this one very far.
Rice - No follow through as the
key reversal yesterday was met with good buying today and a hook
reversal up on the day. A move over yesterday's high of $8.18 sets
up the target price of $8.35. That is where we'll lighten up.
Natural Gas - A move tomorrow
under $13.46 sets up a weekly key reversal down for the week. That
is probably asking for too much but then again, maybe not. We see
the market sideways and cutting trend traders to pieces. We would
buy this one on a good break to the longer term support zone which is
under $13.00.
Cattle - Still no sign of a top
with good support at $94.30 to $94.00 even for the Feb contract.
We have sold our calves and now are hoping for a pull back to look at
adding to herd levels.
DOW - As I write this we are
down but not hard. I still like fading this rally as longer term I
see the market pausing with terrible results for the 1st quarter in
2006. I'm not ready to say anything about the 4th quarter as I
think results could be mixed. If I was in funds, I would step
aside before the end of the year to see what happens over the first few
weeks of January. On one more push toward 11,000 I'll short it but
not right now.
GOLD - O.K. ... I can't resist.
God has corrected nicely and many of the late comers are gone. I
expect a rally from here and my guess is that it comes from here
(Thursday at 2:15 PM). I'm long at 507.20 very lightly expecting a
dead cat bounce or what some call the , "oh heck, I missed the break"
rally. I'll sell it pretty darn fast if I'm right and we get a
bounce.
Wednesday December 14th - 4:30 PM -
Corn - Not a lot in today's
session. The close sets up a test of the $2.05 level in March
again. The bottom line here is that the lows are in but that
doesn't mean its going straight up.
Bean - Hook reversal down as we
trade against resistance. A close over today's high could propel
the market another 30 to 50 cents higher but it needs help in the
southern western hemisphere for that to happen. Maybe something
else will surface but I think the index funds are through right now
especially with Gold selling off.
Rice - Key reversal down today
so now we see if there is follow through selling here tomorrow. We
may lighten up if we get a good sell signal.
Natural Gas - Nice break today.
This one is bit pricy and we still see the market in a sideways range
for now. We might test support but if the weather keeps below
normal tempos headed at the northern and mid portions of the country,
there is going to be a lot of reluctant sellers.
Cattle - New highs...No sign of
a top.
DOW - Read the comments from
last night....We want to sell a
nice rally here and it will be interesting to see if we can finally
climb over the 11,000 mark.
Tuesday December 13th - 7:30 PM -
Corn - What a difference.
The market tried to work lower but couldn't do it as buyers cam in on
all sides. This rally should be sold but we can get a little more
out of it. We will cash in half our longs at $2.10 in the March.
This rally has been good and could hold on until it hits $2.15.
Bean - Market higher on new
Index fund buying. These guys could own all the beans grown in the
US and not pay more than 20% of their cash position in the process so
the bears will not stand in the way. We could work even higher
here but a good crop in Brazil will douse the flame. Lets hope its
not until we are much higher.
Rice - WMP unchanged.
Nothing to talk about here. We still see the market a little
higher but it will take more bullish news to really pop this one up.
Longer term we like it but I think we still have time.
Natural Gas - Still going.
Spec buying here is incredible. Look for the market to stay strong
until we see the demand drop off with a little warmer weather scare.
Cattle - Nothing new.
Still going higher right now like all commodities.
DOW - Interest rates came in as
expected and traders can see the light at the end of the tunnel.
The problem is it's a train roaring right at us. We want to sell a
nice rally here and it will be interesting to see if we can finally
climb over the 11,000 mark.
Monday December 12th - 1:30 PM -
Corn - Good follow through today
confirms that the lows are in. It doesn't mean we are going
straight up but it should indicate that the selling has stopped and
those short are now looking for their exit strategies. Breaks
should be bought here with a test of the contract lows possible in the
next 6 weeks; however, we may not see much of a test given the current
costs of inputs. Natural gas is soaring again and that doesn't
bode well for fertilizer prices in the spring.
Bean - Beans exploded today but
couldn't hold the big gains they had early in the session. We
still think that beans need to modify the price difference between them
and corn. Weather in Brazil will still have an impact if we get a
scare down there at all.
Rice - Market has run into an
area of resistance and there are no real fundamentals out there to
support a sharp move higher. We still see $8.35 as the target for
March rice and will probably look at selling longs out if and when we
get there.
Natural Gas - Baby it's cold out
there. WOW!!! Gas continues to hold high prices as it
commands high premiums from consumers for gas use. I don't see it
getting much better near term. We would buy breaks.
Cattle - Still no sign of a top.
PB is at 54% in the Feb so we have done a great job of balancing the
momentum indicators and we are set for another 3 cent move. Which
direction is now the only question.
DOW - Not good, not good, NOT
GOOD!!! This break is looking worse and worse but it won't
capitulate and collapse either. We remain long and are wondering
why but the longer term chart is still positive with PB at 52%. We
are on the edge of the canyon looking for a place to sell it on a rally.
Longer term we see an impact on the economy as this winter turns off
even colder.
Friday December 9th - 1:30 PM -
Corn - The markets shrugged off
the bearish S&D report today and moved higher with another massive key
reversal up. This came after we made new contract lows earlier in
the day but found no sellers. In fact, all they found were buyers
and the market rallied under strong fund and commission house buying.
The big surprise in the report today was they didn't change
production...that was your first big hint not to be selling today.
They increased carryover by lowering exports. Let's see here, the
world production is 69 million metric tons under world use and the USDA
is lowering US exports. OK...makes total sense to me!!!
Anyway, the fact that there was no increase in production made the
numbers a soft target and that is not what you should see major selling
occur on and it wasn't there. We added to longs today lightly and made
sure there were no shorts on in cash as we look for the market to really test
its supply line (down trend) before doing anything else. Longer
term, we like the market but again, that is longer term. We really
like what we see in the world picture.
Bean - I was wrong on the USDA's
ability to increase the carryover. I expected 380 to 385 and they
came in at 405. The market rallied with the corn but not much.
It will take weather problems in Brazil to really make this market move
higher.
Rice - USDA numbers were of no
surprise and the market liked that moving higher into the close.
We are still long here but will sell on a nice bounce. Longer term
we like the market but looking out at the new crop, there is a huge
premium over old crop right now. Acres are going to be lower
especially in Texas unless we can plant with futures over $9.25 to $9.50
in the November contract. Near term, $8.35 remains the
target for March futures.
Natural Gas - February gas is a
little pricy here and after making contract highs, reversed. I
don't see any reason to change our ideas here. I see gas in a
range between 12.50 and 15 near term. A break in the early spring
and then a rally into the summer.
Cattle - Still going...we'll
wait for a reason to short it.
DOW - As I write this we have a
hook reversal working on the Dow. A close 10,850 sets up another
test of 11,000 we are starting to think we're wrong on that but haven't
given up all our hope. Next week it need to happen.
Thursday December 8th -
11:30 AM - WAY
early due to hectic schedule today
General Comment - The market
still has a long way to go today but I won't be able to watch it.
Tomorrow morning we get the USDA report and everyone is expecting the
USDA to increase production and carryover. Stocks are expected at
2.35 billion compared to 2.32 last month (rounded) for corn and 392
million bushels for Soybeans compared to 350 million last month.
Anyway, this will be the last major change to the carryover by
production changes. From now on it will come from changes in the
demand side.
The only other comment on the grains, is that I don't
see the bean number over 390. We are setup for a bullish response
no matter what happens. I will go through the report long corn and
long some bean calls.
Rice - I have no idea what the
report will show but my guess is another cut of the carryover. In
reality it is a 50-50
Natural Gas - Baby. it's cold
out there. This is going to hold the Dow down for a while.
Cattle - No sign of another top.
DOW - I'm still long and still
very nervous...energy costs have to be affecting this one. Lets
see what happens into next week. Read our comments the last few
days below for support numbers.
Wednesday December 7th - 3:00 PM -
Corn - I still think a low is in
and if it it isn't, we are within a few cents of it. Basis level
continue to increase even thought the futures sell off. Where are
the futures going if cash can't follow? Nowhere!!! Do we buy
now??? Nope...What is the hurry? There is a big difference
between a low and and the market going up. All I'm saying is that
it is about to stop going down. March and May corn futures may not
have made their lows as an accordion low formation is still possible but
I think we are very close to a major low.
Bean - We finished off the lows
but this one isn't going anywhere either.
Rice - Down 12 cents earlier in
the day and we finished closer to the high than the low and off 4 to 5
cents. Nothing would surprise me here. We still have a chart
objective of $8.15 in the Jan and $8.35 in the March. We will add
to positions on breaks but are not going to get and out of this one.
Longer term we like rice to move higher.
Natural Gas - Cold weather and
still many rigs off-line in the gulf. We will buy breaks.
Cattle - Still going...we'll
wait for a reason to short it.
DOW - I don't like today's
action as we broke under 10,800 and as I write this it looks like we
will close under that level. Major support is at 10,560 so now my
projection of over 11,000 before Christmas is in jeopardy. 10,670
to 10,770 is a major support zone. If we start to bounce off of
that, this will have been a correction. A move under 10,700 could
accelerate this one toward 10,500. I'm long here and very nervous.
Monday December 5th - 8:00 PM -
Corn - Today's action confirms a
low is in. It may be temporary but we should see some short
covering near term until farmers want to let go of a large chunk of
corn. With the end of the year just around the corner, that could
happen in the next two weeks. We will sell this rally but look for
the market to balance itself first. March could trade back to
$2.10 which is another 3 cents, with little trouble.
Bean - Technical buying today
with some rumor of China in to buy but for the most part, there is
nothing new here in the fundamental department. This bounce could
last a couple of weeks as we continue to look for weather action from Brazil.
Rice - There is no real news
here as the bounce is purely technical. This market is thin and
when a commercial needs coverage, 25 cents is nothing and they will pay
up to get that coverage. We need more buying the next few days to
move this one back into an uptrend mode and I think it is too early to
do that. The action at the end of the day sets us up to be lower
tomorrow.
Natural Gas - As we said
Thursday, the market is finding some resistance here. Today's
action is not going to get us into the bear camp at all. Longer
term we want to buy breaks but think there is time to get this one
lower.
Cattle - No sign of a top.
We have sold our calves and lifted hedges for the most part and there is
little sign of cash prices rolling back just yet. We still like
owning cattle in the field.
DOW - On the longer term charts,
it looks like the Dow is building some support for a move to 11,000.
Nothing has changed in our minds to that happening. Once we climb
over that level, we are going to be looking for a major correction.
With this sideways base building the last few days, odds are increasing
that the high of this move maybe to 11,100 level or even higher.
Nothing has changed in our long-term outlook here as we see the first
quarter of 2006 being a correction market.
Thursday December 1st - 2:00 PM -
Corn - A key reversal up today
in corn on good action. We started higher, then sold off going
down on the day and looking like it would make new lows and then turned
to close higher making new highs into the close. It won't mean
anything unless we see more buying in the next few days and remember,
this would only mean that we have stopped going down, not that we are
getting ready to go higher. Longer term, that is exactly what we
think will happen but not for some time.
Bean - Not much here. Corn
and wheat both showed good strength today with a key reversal up
in corn while wheat had the same action yesterday. If the grains
can get some support traction here, that may take some of the pressure
off of beans to test their lows longer term and we could move higher
into the Brazilian weather market.
Rice - Even with the lower move
today, we see the market as sideways and would buy a lower move.
We could work another 20 cents lower but there is little out there to
push this market into a longer term move lower especially with acres
declining in double digit percentages next year.
Natural Gas - We should be
nearing some resistance levels but this market is going to stay very
volatile and we will buy breaks when we get them. For now, we are
out looking to buy. This market is why we think longer term, the
financial markets are going to have to redistribute their fundamentals.
(See the Dow below)
Cattle - Another market that
just keeps on moving. We have lifted all shorts and have completed
calve sales for 2005. I see cattle staying strong for the next 6
months but do see continued herd expansion in the reports coming out the
end of January.
DOW - Read last nights comments
and you'll see that we felt it needed to break lower today to confirm a
short term top. Since that didn't happen and as I write this the
Dow is up over 100 points, I now believe we will trade up through 11,000
and then possibly correct. We went back long today and will hold
that position into the close if we can rally here the last 45 minutes.
Look for the market to break through 11,000 with a feel good rally in
the next few days and then look for profit taking. That is where
we lift long positions.
Longer term, we see the Dow back down into the
Mid-10,000 level but doubt we will see that until we get more negative
corporate earnings. From a very long term aspect, I doubt the
market can get below 10,000 unless there is a major slow down pointing
to recession. I guarantee, the next recession will be out of
control and the Fed will not provide a soft landing. Here are a
few comments on the current economic picture for you to think about.
Current
Economic Environment
|
