The Allendale Wake Up Call
Good morning! The Allendale Wake Up Call is our newest report/newsletter offering which will be released by 6:00 AM on days when markets are open. You will get a early update by listening in to the “Morning Coffee” at 8:00AM. More details will be released on the Pre-Opening Comments at 8:30. Give us a call or email with your comments as we get this product off the ground.
Grain Markets are higher at 5:35 this morning.
Grain markets are seeing follow through strength this morning. Wheat markets around the world were higher during the night. News continues to circulate that Russia will have to cut or completely stop exports this year. The outside markets are also providing support for commodities with the dollar down .58, crude up .24 and stock futures up 49.
Why the Chart?
Wheat shot through the previous DT we had been monitoring recently at 6.10. The close was above it as well, which now opens the door to the highs from last Nov near 6.40. This uptrend is still very steep and vulneraable to sharp corrections. More chart analysis on Allendale Advanced Charts.
Corn is trading 3 to 4 higher
WOW is today’s reaction. SovEcon (Russian think tank) estimated all grain exports at 12mmt v 22 last year and wheat exports at 11 v18. Huge investor-based buying developed around the world in response to this. The rally tried to take out resistance today at 395, but failed and backed off into the close. Fund buying remains the hope for the bulls but the fundamentals are not providing much fuel. Technically speaking corn should find support at 3.85. Resistance crosses at 3.94½ and then 3.99½.
Soybeans are trading 7 to 8 higher
We were looking for bounces to sell from, thinking we would most likely have to settle for a small bounce. Thanks again to wheat we hit some higher objectives. Last night the European wheat contract moved to new contract highs again suggesting even more strength. It would have been nice if they would have run higher on more solid news though. Technically speaking November beans have support today at 9.61. I have resistance at 9.93.
Wheat is trading 3 to 6 higher
For CBOT SRW wheat, resistance at 610 is now support. It interesting to note is how Morocco specified it will seek 140 K tonnes of US durum wheat. MGEX Sept futures have resistance of 650 with support at 620. Allendale suggests an import shift is in the making, especially in northern Africa and the Middle East from Black Sea origin to US. Numbers 5, 6 and 7 wheat exporting nations (Black Sea region) are fighting dry weather, not the case for the number 1 exporting nation of the US. Technically speaking September wheat has support at 6.10 and major resistance at this weeks highs of 6.32.
Lean Hogs are trading 40 to 95 higher
Concerns are mounting that Russian livestock producers are liquidating some inventory because of available feed supplies. This could eventually drive poultry demand back to the US. Indirectly, that is friendly to pork as we reduce our competitive meat supply. Money flow by large funds and speculators will continue to create volatility at current price level. Technically speaking August Hogs have key support at 81.75 with resistance at 83.70 then 84.90.
Live Cattle are trading 0 to 10 lower
Packers raised bids to $93 earlier but feedlots are still holding out and asking $96 to $97. Packers’ advantage in the standoff is that they can pull August contract cattle to keep chains rolling. Feedlots have the tighter supply of market-ready cattle on their side. Midday choice beef values were down $.34 and select was up $.82. The reversal in cattle futures are also adding some confidence to sellers hoping to higher prices. Technically speaking August Cattle tested resistance and closed lower. Resistance 93.10 and first support now crosses at 92.05.
Market Movers and Other Thoughts
This Morning’s Weather: Comments from Drew Lerner of World Weather Inc, The latest soil assessment quickly brings the entire situation to light. A tremendous portion of western and south-central Russia and western portions of Kazakhstan are void of significant topsoil moisture and about half of the region is equally dry in the subsoil. These areas that are dry throughout the soil column have the worst crop conditions and some of this region has been in this condition most of July and in a part of late June. That is why there has been so much talk about serious production cuts across Russia’s spring wheat, corn, soybean, sunseed, oat, sugar beet and potato crops.
Economic Information:
One of China’s top Central Bank Officials said China will maintain a loose monetary policy during second half of year.
USDA Grain Export Sales Estimates for week ending July 22 released today at 7:30am
WHEAT 250-450
CORN 750-1,200
SOYBEANS 700-1,250
SOYMEAL 75-175
SOYOIL 30-60
South Korea sends strong message to North Korea
Judge block Parts of Immigration Law
Friday is Last Day of the Sizzling Summer Subscription Special
Today’s Strategies
Speculators Call or email us to get the Allendale On-The-Go at research@allendale-inc.com.
See Allendale On-The-Go for full details.
Hedgers Ideas: Call your Allendale Broker to discuss strategy for your needs NOW.
Buy a Nov 9.80 Put, Sell a Nov 8.80 Put, and sell a Nov 1060 Call for $.10 or less
End Users Buy hand to mouth as we approach harvest.
Full recommendations can be found on the Allendale Research Center. Click HERE…
Major USDA Reports
· Weekly Export Sales, Thursday, July 29, 2010 at 7:30 AM
· USDA Crop Production, Thursday August 12, 2010 at 7:30 AM
· USDA Supply and Demand, Thursday August 12, 2010 at 7:30 AM
Updates:
Get a complete market update by watching “Morning Coffee” YouTube Report after 8 AM Daily (FREE)
Pre Opening Reports on Grains and Livestock (Subscribers Only)
Recap of the day’s trading “After the Bell” YouTube Report (FREE)
Wrap-Up Commentary gives you details and strategies which will benefit you in decision making in trading or cash marketing. (Subscribers Only)