A quiet day finally after several busy sessions which began a week ago today reaching the most recent high for Z'07 at the rate 67.40. This was followed by several more busy sessions which mostly accounted for lower levels that bottomed out yesterday at 62.15.
Today, the market fed off of the bounce off the lows, but found good trade selling near 64.00 as well as support near the lows @ 63.15. Market traded in a narrow range, 50 pts on either side of unchanged, on light volume with only 8,000 futures and 10,000 options.
Export sales were 25% lower than the previous week at just over 100k and the shipments were about the same with 256,000 bales. Grains and the stock market were also very quiet as the market looked like it is waiting for more guidance.
This could come next Friday on the USDA report, but in the short term, with China on holiday and the mills reluctant to make new purchases at these levels, expect we will trade between 63/64 short term until the market tries to make a run at 62 or 65 which will give us a better technical picture of the market.
Technically, the market has started a downside trend channel, but we managed to find good technical support at the 50% retracement and the 50 day moving average. We did see a run up to 64.00 cents, but the market looks like it is setting up for another retest of the downside. RSI is 50% and open interest is still over 230k with rising cert stocks and a lack of demand.
Grains also look mixed as the stock market tries to decide if its bullish or bearish. All of the sideways movement lately feels like another fallout could be around the corner. Unless the market can break through 65.00, which would represent the top of the new downside trend channel, we will probably be making another test of the 50% retracement level in the near future.
marketing@alchempro.com
