Going Granular – October 10, 2011
FMX | Connect – www.fmxconnect.com - (Reported 10/10/2011)
Going Granular provides a synopsis of overnight activity with brief market commentary from industry professionals.
Morning Round-up
Bloomberg (Reported 10/10/2011)
Food prices will likely remain high and fluctuating as demand rises because of economic growth, a growing population and greater use of fuel made from crops, the United Nations’ Food and Agriculture Organization said. Food supply faces a challenge of increasingly scarce resources as well as falling rates of yield growth, particularly for rice and wheat, the Rome-based FAO said in a report on global hunger published today. Food Prices to Remain High, Price Swings to Continue, FAO Says
Agrimoney.com (Reported 10/10/2011)
Was Canada behind the shock increase in US corn stock inventories which sent grain markets tumbling? That is one idea doing the rounds in market chatrooms - that investors were right to attribute the US Department of Agriculture's discovery of 200m bushels of extra corn to substitution of the grain for wheat in livestock rations. Was Canadian wheat behind robust US corn stocks?
Farm Futures (Reported on 10/10/2011)
Futures look ready for a stronger open across the board this morning, with hopes for a new bank bailout plan in Europe helping the market recover from Friday’s losses. Volume could be thin, however, with flood trade in currencies and Treasuries closed for Columbus Day. Corn tries to cement its move back above $6 today, with December confirming a move above its steep September downtrend line overnight in fairly light volume. . Morning Call by Bryce Knorr
Morning Grain Comments (Reported on 10/10/2011)
The grains were on a double-digit, high-volume revival overnight despite a minimal amount of fundamental support—it’s the outside markets that are the catalyst once again. The trade isn’t expecting much help from what will likely be massive harvest numbers tomorrow, and an expected bearish integration of yield and stocks data in the October S&D’s on Wednesday. FCStone.
Technical Overview DEC WHEAT
The market is bearish and still calls for a slip against 595-. A close under 595 could add washouts to 575-565, testing a previous weekly chart swing low. Corrective action will likely struggle around last week’s congestion over 630+. Last Thursday’s rejection from 630+ favors a roll back to selloffs. A pop over 661 1/2 or close over 636 3/4* alerts for a near term reversal, but a close over 685* is needed to secure a bottoming turn.
DEC CORN
Overall the market is bearish with accelerating declines of recent weeks still providing downside potential to 565- as well as an extreme washout to 490. Last week’s rebound off 575 provides some near term positive forces that could extend into the next 1-3 days. Any corrections should struggle to retrace over 630 3/4* and quickly return to selloffs. A close over 630 3/4* is needed to drive a retracement to test 656* resistance.
NOV SOYBEANS
The market is bearish and aggressive declines warn for additional washout action. Expect declines to 1150- as well as potential for washouts to 1099*. A close under 1150 will fuel selloffs. Any corrections should struggle to retrace over 1206* and quickly return to selloffs. A pop over 1238 3/4 or close over 1206* is needed to signal a reversal and spark retracements to 1277* resistance.
MAR SUGAR
Overall the market is bearish and could extend washouts to 2350. Recent sideways trade leaves near term action negative and warns for deteriorating trade action down along the last swing low at 2425- 01. We may see further consolidation days around 2500+/-, but mostly sideways action will bear flag, setting up for selloffs. A close under 2563* alerts for a shift to corrective recovery action.
DEC COFFEE
The market is bearish with last week’s sideways-higher congestion staying capped by resistance at 23635*. The rejection from 23635* hints for renewed selloffs and penetration of last week’s low signals a potential wash to 213. A close over 23635* marks a reversing turn into a sustained recovery near the key 24695* resistance, testing for a stronger bottoming upturn.
DEC COCOA
Overall the market is bearish and trade is positioned for selloffs. A drop under 2588 is negative for selloffs to attack the 2540 low. We may see additional corrections, but expect rebounds to stay contained under 2708 to keep trend forces locked to the downside. A push over 2708 will spark retracements that have a chance to reach 2802*. A close over 2802* is needed to trigger a bull turn into a sustained bull swing.
DEC COTTON
The market remains in a bear turnover and calls for a secondary selling wave to test back against the summer basing lows. A drop under the previous week’s low should propel selloffs to 9600-. We may see additional flagging corrective days in the low 100’s, but a close over 10503* is needed to stop pressing bear forces. A close over 10890* is needed for a reversing turn to the upside.
FMX GRAIN REPORTS:
Volumes & Open Interest*
End Of Day Straddles*
Trade Blotter*
Settlements*
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