Market was trading lower electronically, but did make an attempt to test the highs after the opening but ran into resistance again over 64.00. Volume was low again today as the market seems to have trouble committing to a direction at the moment and the trend is to sell rallies.
ICE and the electronic platform have opened up liquidity and are now responsible for 70% of the volume in futures on a daily basis as we traded 12,000 total and 8,000 were on ICE. Options were only 8,000 total and were leaning to the bearish side with call selling and put buying as volatility is starting to slide lower.
Grains were firm overnight and during the day as corn, soybeans and wheat were up 2-3% on the day, but export sales and shipments were on the light side. Total new sales were just over 100k like last week and shipments were even higher at 450K as we get closer to the 06/07 export sales target.
Domestic consumption annualized number came in as expected around 4.9 mb's and cert stocks and open interest were basically unchanged.
Technically the gap drop last Friday has provided heavy resistance above 64.00 and the trend looks like we may test lower levels as we search for a bottom to this range. The front month looks like it is stuck between 60/62 at the moment and that will be a major support line under the market.
In the meantime the bears will aim to break through 62.50 and 60.98 as the bulls continue to try and break above 64.00.
marketing@alchempro.com
