Farmers are urged to price corn by January
Soybeans: On Friday, fund selling in beans was 3,000 contracts in response to the bottoming action in the dollar. Good demand from China (5 cargoes today from the US) provided support and futures ended 4 cents lower on the day and 10 lower for the week.
Soybeans futures were able to hold support at 1030. A close below 1030 will be the first sign of trouble and a close below 1020 and 1005 will pretty much get every chartist to turn negative. Looking ahead, exports will likely be revised up on next week's supply/demand report. However, history tells us that China's buying (over 85% of their annual US needs are now booked) cannot last. History also tells us that when they can, they will sell the overpriced US market (cancel booked shipments) and switch to a cheaper South American market. But that has not happened yet. We cannot argue with the currently bullish statistics yet. Looking into January, we are concerned about the China situation, the USDA annual report, and the South American harvest.
Direction: There were 15 analysts at Thursday's meeting that was discussed in the corn comments. The consensus was that we are $1 to $3 over valued, you should sell by January 10th for all of 2010 crop, and that we are in a bubble that has not popped yet. But when it doesâ€¦ be short (good advice)â€¦Bill Biedermann
Trade Idea(s): (12/02) Buy Jan 1005 OCO sell 1055, risk 15 from entry, objective 38 from entry.
Option Strategy(s): (10/08) Bought Mar 920 put, sold 1020 call, sold 800 put for 10â€¦producer idea. There is margin required with this, but you are in a position to make 120/bu if the market breaks while leaving a 100/bu upside open before you are locked into a short.
***Disclaimer*** The commentary and trades below are derived from technical indicators provided in our Allendale Advanced Charts pages and may not correspond with the fundamental commentary above.
Advanced Charts Direction: Beans have tested support at 1029 1/4 the past three sessions and it has held. Today's close was in the middle of the range, but below the 10 day MA. The overall trend here is still bullishâ€¦Monica Moehring
Vital Technical Indicator: The next projected major turn day for soybeans is December 9, soybean meal is December 18, and soybean oil is December 21.
Closing Cattle Commentary
Live Cattle: On the Food for Thought page of this Advisory Report we have placed a chart showing monthly job losses. This morningâ€™s report was a surprise as it indicated only 11,000 jobs had been lost last month instead of the 130,000 expected. With this good news in hand, bears are still trying to stay resolute. As we noted in the 830 am Livestock Fundamentals page of this report there are two arguments for the bear side 1) higher slaughters for the next three months and 2) continued declines for beef demand. While Friday's report may not indicate beef demand is done going down, perhaps it will help stabilize the situation. For direction, we will point out trade psychology remains terrible. While most of this week has been devastating (cash fell to $82) perhaps Friday's report will begin to stabilize pricesâ€¦Rich Nelson