Futures were trading lower electronically, and unlike yesterday, continued to fall further after a short stop near 67.00. Grains were slightly lower overnight but did break down weaker through the session to close down 38 cents in soybeans and 12 cents in corn.
Attached the latest Dec'07 chart after today's correction to relook at the targets under the market. The market did bounce back 40 pts after the open outcry close with good volume of 34,000 in futures and 34,000 combined options. We were within expectations for the spec hedge report at 32.8% long.
But it does seem like the market is feeling more upside selling pressure coming from new crop and today there was even some spec liquidation as we found sell stops under the market. Grains contributed to this weakness as both corn and soybeans had another big down day.
Fundamentals have not changed, but the commodity complex seems to be driving the price of cotton and we will have to see if there is more profit taking in grains or we start to find a bottom nearby.
Technically, the market did have its first good pull back in 8 weeks and grains did have a major role in causing that. We did find support on the lows and will have to see tomorrow if there continues to be good buying scale down. With soybeans and corn down hard again today, this will also be a key factor in how far this correction may go.
We did break the 9-day moving average and the market is still overbought and needs a further pull back. See the chart on page 2 attached in PDF where we analyze the areas of support, resistance and potential gaps to be filled.
marketing@alchempro.com
