Futures were trading sharply lower on light volume before open outcry and then found the lows after the opening. Market had a nice close on Tuesday, but continues to have trouble with selling pressure neat 65.00 c/lb. based Z'07.
Current targets are 65.50 to the upside and today's low of 63.65. Volume continues to be average with futures a bit higher today with 16,000, but options were on the low side with only 7,000.
We seem to be trying to find a range where demand can come into the market and we will get a good feel for that tomorrow with the export sales report. The numbers are estimated to be much higher than the last several weeks and the size of the sales could be a big factor in setting the nearby range.
As far as the production side of the equation, the USDA S&D will make their first survey 07/08 results available on the August report coming out next Friday. All of this news will be watched very carefully as we get into the critical crop period to finish the crop in August/September.
Technically the market had a weak late session today and closed at the low of the recent short term sideway trading range. Z7 again closed above the 9-day moving average and still looks friendly. There are some weather concerns growing in South Texas and possibly China has some flooding issues as well.
Tomorrow is the first day of a new calendar month, and it'll be interesting to see how investment funds examine their positions and re-allocate their investments based on their past performance.
marketing@alchempro.com
