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Trade Still Questions Crop Estimates, Analyst Says
Light support was seen once again, which was enough for December to make new highs for the slow grind higher. It is quite possible that some of this was buying ahead of next week’s Pro Farmer Tour. For all the doubt over reports and estimates, the one thing we have no doubt about is that this tour will appear bullish, at least until the final estimate is released. The total support that tour can supply might now be limited, however, with first big chart resistance very close at 346.
Will the tour supply bullish news? Yes. Will it provide enough bullish news to break first major chart resistance? Maybe not. We will just have to wait and see exactly what kind of support this market can find from that tour, holding off excitement early on unless 346 resistance is taken out.
Short-term, we can look for general market support during the tour with a setback seen just ahead of the final yield announcement (buy the rumor, sell the fact). Longer-term, we still need to wait for harvest reports to determine longer term direction. Let's just remember again that large yield numbers from combines are not good enough. Last week’s 175.1 yield number means we need to hear strong enough yields to shatter the old record of 171.0, not just break it.
- Next week’s crop tour should continue to provide at least light support.
- Bulls will want to continue seeing occasional 8 a.m. sales report to show that export demand is still aggressive.
- Taking out 346 resistance would open up the charts all the way to 380.
- Sellers could finally stand in with active resistance near 346 resistance today.
- As a timing aspect, sellers might want to take a shot at selling on Wednesday or on what might be a sell-the-fact Thursday.
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