I think I speak for all of us when I say that 2009 is a year we won’t soon forget. Rather than re-hash what we all lived through, I think its best we bid 2009 farewell and adieu.
Today trading is mixed, as was to be expected. I will write two summaries, beginning with the grain complex. And the second installment today will cover stocks, metals and the crude oil.
For now, lets look at the Jan beans. In my opinion, between the thousands of ten dollar calls which were exercised last Thursday, and the continued buying which is materializing, this very well could be the large index funds already getting a package on prior to the first of the year. The whole world is anticipating the index funds re-balancing at the first of the year. The dip down to 985 last week most likely spurred their interest. If in fact they have been buying, they already have a 40 to 60 cent premium on their longs. But of course, its pure speculation on my part. No one really can tell. Perhaps next week we will have a huge run up, as the “real” fund buying begins. Only time will tell, but we won’t have long to wait.
Today SF opened at 1046, posted a high at 1047 and a low at 1041. Today’s short holiday session is almost meaningless, but we will have to see how we close. I have to imagine that longs will not miss an opportunity to dress up the close and settle the beans at or near the 1050 strike price. That will give everyone something to consider over the weekend. On the daily charts, the last 6 day strong up move is impressive. On the daily charts there is a band of resistance at 1060 to 1070 which could be blown through next week if the funds really come for these beans.
March Corn opened on its day -session high so far at 416, and posted a low at 413 3/4. A typical narrow holiday range. However, a move in the beans or the dollar index could spike us up to test the recent highs at 418. A move above 420 would be bullish for CH. Just 15 trading sessions ago, we were testing the 380 level. A nice step-higher rally on the charts, marked by yesterday’s flush down to the 406 level, just to smoke out the weak longs, seems to have prepared the contract for a base for a run up to the resistance above at 425, which is the old high from October and November. A strong move above those levels would open the door up to the 485-500 area on the charts.
Finally, March Wheat, is the laggard of all three. With bearish fundamentals, the contract appears mired in an 80 cent range, between 510 and 590. A break from that range in needed to really solidify the direction of the next major trend. For now, WH is being pulled along by action in the beans and corn.
WH has a high today at 550 and a low at 540, after opening early at 542 1/4. Currently it is sitting at 544 3/4, unchanged on the trading day.