Market was called higher and looked like the sentiment on the floor was friendly, but it did not take long before the low of the day was reached at 53.35.
This held up and only was able to test the highs a bit above yesterday's level at 53.75. The holiday mood seems to be setting in as the volume was weak again today. The spec hedge report showed a pretty big cut into the specs short position going to 6 percent from 14.5 percent last week.
We are getting very close to year end and almost have the same amount of spec longs as shorts which makes it hard to predict which way the specs will try and push the market by the end of the year. The trade scale up selling should remain and we will have a better idea how much more is left when we get the repaid loan update on Friday.
There is also a rumor that some new China sales might show up on Thursday's export report so this might help us test the highs and possibly keep the upward momentum going.
However, there is no reason to expect a friendly USDA S&D report next week as the rumors are that the China crop keeps getting bigger and the U.S. exports need to be reduced.
Technically the chart may look a bit more friendly after Dec goes off the board tomorrow on the last trading day. Open interest in Dec is still working itself out and will see how that effects NY.
New crop sales are still very slow as most major importers seem comfortable waiting for a dip in NY to buy volume for first quarter delivery. Everything points to a fairly quiet year end probably trading between 52/55 cents based H'07.
marketing@alchempro.com
