Corn falls as supplies put damper on export expectations

Financials: June Bonds are currently 9 lower at 144’06 and the 10 Yr. Notes 4 lower at 131’27.5. Very little news affecting the Bonds this morning after the three-day weekend. For the moment we will look at the Bonds as a trading affair between 143’12 and 144’24.

Grains: May Corn is currently 30 cents lower at 665’2, May Beans 12’4 lower at 1392’2, May Wheat 7’4 lower at 680’2 and Dec. Wheat 6’4 lower at 706’6. On Friday prices tumbled sharply on nearby contracts particularly Corn as the quarterly stocks report showed more grain in storage than anticipated indicating poor export demand over the last few months. The planting intentions report was pretty much as expected supporting new crop contracts at lower prices as spreadwise they gained on nearby contracts. May and July Corn are now 70 cents below pre-report levels and I feel that the market is oversold and in support near the overnight low for May Corn at 651’4 and July at 632’6. Buy breaks with a 15 cent risk. Users of Corn should start sharpening their pencils and start calculating feeding margins to be looking for long hedges in Sept. and Dec. Contracts now that we have had a more than 30 cent break in new crop contracts and a rally in feeder and live cattle contracts.

Cattle: June LC and May FC have rallied sharply since Friday morning’s Grain Report and are now nearing short term resistance after a nearly 400 point rally in LC and 600+ rally in FC. If you remain long either June or Aug. LC either take profits or raise your protective sell stops to 75 points below Friday’s settlement.

Silver: May Silver is currently $0.35 lower at $27.97 and June Gold is $2.00 higher at $1,597.70. We remain lightly long Silver and on the sidelines in Gold.

S&Ps: June S&Ps are currently 0.75 lower at 1562.00. On Friday the cash index finally made a new all-time high close on light volume. The inter-day high for a nearby futures contract remains above the market in the 1586.00 area made in 2007. Near term resistance of 1557.00 was penetrated to the upside (am I overstating the obvious ?). Treat as a trading affair between 1546.00 and 1566.00. If you are still short a combination of futures and the May 1500 put from a recommendation a couple of weeks ago, you might consider covering the short 1500 put and then rolling it into the 1520 put on any break in the market.

Currencies: As of this writing the June Euro is currently 4 higher at 1.2827, the Swiss unchanged at 1.0546, the Yen 51 higher at 1.0684 and the Pound 38 higher at 1.5203. I am currently on the sidelines but with a negative bias to the Euro on which I have recommended selling sharp rallies with an initial protective buy stop just above the 1.3100 level.

About the Author
Marc Nemenoff

Mr. Nemenoff is a 40-year veteran of the futures industry. While attending graduate school at the Illinois Institute of Technology, Marc took a job as a clerk on the trading floor of the Chicago Mercantile Exchange. Over the years he grew to become an independent member of the exchange and spent many years as a trader, market maker, lecturer, and committee member. Since 2004 Marc has been a senior broker and analyst handling customer accounts for both speculators and hedgers in addition to institutional traders. Marc is also the author of The Nemenoff Report, a daily overview of the markets that includes his own perspective on market direction. Mr. Nemenoff describes his approach to the market as 75% technical and 25% fundamental and is also a firm believer in the use of option strategies as a way of using leverage and minimizing risk when one has a long-term market strategy. You can contact Marc by phone at (888) 908-4310 or by email at mnemenoff@pricegroup.com. Learn even more on our website at www.pricegroup.com.

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.

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