Market Wrap-Up by Chris L. Haverkamp   Date: 09/03/10  Estimated Update: 09/07/10 Company: Paragon Investments, Inc. Phone: 888-452-8751 eMail: info@pitrader.com Website: www.ParagonInvestments.com . Corn Futures Fundamental: December corn traded mostly lower throughout the day session before staging a late recovery to marginally higher on the day. The late gain came in conjunction with late rallies in wheat and soybeans on a day that saw continued evidence of strong export demand for US corn. However, traders note that demand is being counterbalanced by the start of harvest in the US. The USDA announced a sale of 120,000 tonnes of corn to Egypt this morning for delivery during the 2010/11 crop marketing year. This week's export sales were well above trade expectations overall, although sales remained light to moderate for soft red winter wheat. All-wheat sales for the expired 2009/10 crop marketing year came in at minus 28,500 tonnes, but new crop 2010/11 sales came in at a whopping 1,686,700 tonnes for a combined total of 1,658,200. As of August 26, cumulative corn sales stand at 20.4% of the USDA forecast for 2010/2011 versus a 5 year average of 18.5%. Sales need to average 782,000 tonnes each week to reach the USDA forecast. Technical: December corn was slightly higher, but finishing strong for the highest close since the beginning of the year. The high-range close above the pivot point suggests a bullish bias for Friday. Next resistance is likely to be the psychological 450 area. Support looks to be the 10-day moving average of 435. The trend is up, but directionals are showing an overbought condition. Bulls would like to see this 3rd-wave leg extend a bit further (objectives on the chart are above 480) before seeing a 4th-wave correction (currently around 420). RSS Feeds  |  Risk Disclaimer  |  Privacy Policy  |  Advertise With Us!  |  Contribute to PitNews  |  Affiliates  |  Resources Fundamental: November soybeans saw choppy trade in a relatively narrow range today. The market moved higher overnight but sold off to start the day session. However, sell orders dried up amid quiet trade and the November contract recovered to finish the day with a modest gain. Meal and oil also recovered into the close with meal leading the way. This week's export sales came in slightly below trade expectations in soybeans and soy oil and about in line in meal. Net sales for soybeans came in at 900 tonnes for the 2009/10 marketing year and 613,000 for the crop year that started on September 1st. This left total sales at 613,900 tonnes. Sales need to average 448,000 tonnes each week to reach the USDA forecast. Net meal sales came in at 156,000 tonnes for the current marketing year and 222,400 for next year for a total of 378,400. The 2010/11 marketing year starts one month later for meal and oil on October 1st. Sales need to average 171,000 tonnes each week to reach the USDA forecast for the remainder of the crop year. Net oil sales came in at 7,900 tonnes for the current marketing year and 4,400 for next year for a total of 12,300. Sales need to average 2,000 tonnes each week to reach the USDA forecast. The USDA announced a sale of 100,000 tonnes of soybeans to Egypt this morning for delivery during the 2010/11 crop marketing year. This is the second such sale in recent weeks, and it points to the recent overall improvement in the US competitive position in the big import markets of the Middle East. The Census Bureau released its soy oil stocks as of the end of July. They stood at 3.548 billion pounds, down slightly from the previous month's total of 3.553 billion but up from 3.330 at the same point last year. Technical: November soybeans were slightly higher on Thursday, but perhaps more importantly had reversed from lower levels. Support looked to be the 40-day moving average of 1001. The high-range close above the pivot point suggests a bearish bias for Friday. The chart had been working off Monday's minor reversal top, but now the bulls have their own minor reversal to support their cause. Bulls are looking for another leg higher after an ABC correction. Bears see a double top formation at 1049, which carries a downside objective of 974. Directionals see no clear up or down trend, with near mid-range values that could support a move either way. Fundamental: December wheat traded higher overnight and then extended its gains into the start of the day session. The market traded below the early highs into early afternoon on a lack of fresh buy orders in futures and more neutral outside markets in comparison to yesterday. Traders said that support came from another very strong export sales total on the USDA's weekly Export Sales report along with an announcement by Vladimir Putin this morning that Russia will extend its ban on grain exports until after next year's summer/fall harvest is complete. The ban had previously been scheduled to run through December 31st, 2010. India reportedly bid on an export tender to Bangladesh again today after that tender had been rescheduled. Traders are uncertain as to whether India will end its ban on wheat exports due to its large domestic surpluses of wheat and rice. This week's net export sales for wheat came in above the highest trade estimate at 1,024,100 tonnes, all for the current 2010/11 marketing year. The biggest buyers were Nigeria, Turkey, Mexico and Egypt. As of August 26, cumulative wheat sales stand at 43.1% of the USDA forecast for 2010/2011 versus a 5 year average of 43.7%. Sales need to average 466,000 tonnes each week to reach the USDA forecast. Japan bought 138,857 tonnes of wheat on its regular weekly tender. Tunisia bought 50,000 tonnes of optional origin wheat on a scheduled tender. Technical: December wheat was higher on Thursday, but the gains were still within the recent trading range to look like consolidation. The mid-range close near the pivot point suggests no particular bias for Friday. Support should be the previous lows seen in August at around 678. Below that there is support in the 675 area, which is about a 50% retracement of the summer rally. Resistance is the recent highs just below 730. Directionals are starting to show a slight uptrend, but have mid-range values that could support a move either way. Livestock: Live cattle futures were higher on Thursday. Fund buying and buy stops prompted the early gains. By the close, October futures had settled back to near midrange, while the deferred contracts were nearer their new contract highs. Spreading and rolling were noted features for the last half of the session. Tomorrow is expected to be a quiet day due to light trade ahead of the Labor Day holiday. However, today was expected to be quiet as well. Funds could easily step forward with another day of new money for the new month. The Goldman roll officially starts next Wednesday, so the buying could still be into the October to make its exit price more attractive. Cash cattle prices are still important, but no fresh news is expected for tomorrow. The outside markets could be a factor, expecting August nonfarm payrolls to decline 110,000 and unemployment to be 9.6%. The actual relative to those numbers could very well set the direction for tomorrow's trade. Feeder cattle were higher on Thursday, following the live cattle action. The futures gained ground in what looks like a technical bounce rather than a pure fundamental play. Sure deferred live cattle futures made new contract highs to encourage feeder buyers, but the lower cash feed prices and this week's higher move in corn futures had a more direct impact on what feeders wanted to pay. Cash feeder prices this week have been mostly a few dollars lower. October feeders finished nearer the session high, finishing about $1 higher than yesterday's low. There is a host of moving averages below 115.00 plus the previous gap above 115.00 to suggest strong technical support there. The August high was 117.95, which should be resistance. Trade seems likely to consolidate within that range. Lean hog futures were sharply higher on Thursday. Triple-digit gains were the norm as fund buying was a noted feature. The high-range close suggests follow-through buying. Cash fundamentals may be supportive as well, seeing some higher ham prices in the morning pork report and talk of lighter weights meaning that there won't be a backlog of hogs after the long holiday weekend. The surge higher in today's trade was attributed to new money for the new month, which triggered buy stops to accelerate the gains. There could be more fund buying tomorrow, but it may depend on what the outside markets are doing as they react to tomorrow's unemployment data. A quiet day is expected, but that was true for today too. It isn't hard to find buyers with futures holding a significant discount to the lean hog index. For that reason, there is interest in the bull spreads even though the Goldman roll starts next week. Spreading and rolling should make for some big volume days next week. Milk futures were sharply lower on Thursday, taking back the majority of the gains seen the previous two sessions. Some of the selling was attributed to profit taking by longs, getting a jump on the upcoming holiday weekend. Some of the selling was linked to ideas that product prices are topping out. Cheese prices were mixed, with blocks up a penny but barrels down a half of a cent. Butter prices were unchanged at $2.2250 per pound. Prices look a little rich as they look to choke off usage while milk production continues to show strong year-to-year increases. Cow numbers have been increasing to help that cause. It will be interesting to see if the recent cull program stopped that trend.