This report was sent to subscribers on 6/17/09 8:30 p.m. Chicago time to be used for trading on 6/18/09. Everything is done by Howard Tyllas, no program or black box.
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July Soybeans
After the close: My pivot acted as support and was $11.87 1/2, $.04 1/4 from the actual low, and my resistance was $12.19, $.07 from the actual high.
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12.54 1/2 |
12.19 |
-------------12.03 1/4 Pivot |
11.87 1/2 |
11.75 1/4 |
|
Trend |
5 day chart............ Down |
Daily chart ..........Up |
Weekly chart ........ Sideways |
Monthly chart ....... Sideways $10.15 is 200 DMA |
ATR 33 1/4 Oversold 25% |
July Soybeans Chart
Comments for 6/18/09 July Beans
Weather and fund asset allocations are the factors to reckon with. I have said that the market tends to sell off the week before the report on June 30, and maybe a week or 2 of strength left in the SN/SX9 spread. That spread traded $1.93 on Thursday (I was looking for $2) before selling off with the market.
I have also said that row crops are influenced by outside markets such as crude oil, equities, and money flow investments, not just supply/demand fundamentals.
Delayed planting will keep bears on their toes for the rest of the summer; any adversity in weather will catapult prices higher.
Lastly, $1.00 summer rallies in the new crop beans have been the norm, not the exception!
In my daily numbers on Wednesday my resistance was $.03 3/4 from the actual high and my pivot acted as support and was $.12 3/4 from the actual low.
Chart comments:
I said "Failure of the uptrend channel is bearish and the bears are hunting for the $11.50 level.
Bulls will try and recapture the uptrend channel at $12.18". Notice how the uptrend line was perfect resistance on Tuesday and Thursday!
Grains: If I was bullish I would prefer an old crop led rally, not because they are buying November and selling July, and paying up for November, because the old crop new crop spread has been coming together since the high of $1.93 was posted. I have said a few weeks ago that this spread normally has seen their high about now, and indeed this looks like the case this year too. Exports today will throw water on the fire if exports are below 100K tons vs. last week's 219.1K, and 171K last year, 1/2 of which went to the PRC and they have not been around lately to buy.
Report is 8 days away and the market is focused on the shift from corn to beans, and I will also be looking at the total acreage being planted. March intentions suggested a 7.4 million acreage reduction in 2009 crops which would be the first time since 2005 that we planted less year to year. Last year we planted a record 161.7 million acres to corn and soybeans, and March '09 said 161 mil would be planted. From what I read the trade is looking for closer to 162 mil. For me this year has too many variables and I do not want to see if the USDA finds or losses acres.
Next Monday crop ratings should really improve, and that sets the stage for better corn yields than thought (at least for now) and that should make up for the expected loss in acreage on the report. On the other hand, soybean acreage could gain more than expected given the sizable unaccounted for acres on the March report. I am starting to think buy CZ10 sell CZ09 corn, with the thought that this year's crop will be better than thought before and next year's crop needs to go higher to attract additional acreage.
With that being said, it would not surprise me to find all three markets trade lower than the recent lows. I will take my cues from the charts, but I want to be out before the report, because any surprise from the report, will not be seen beforehand. Many reports (but not this one) you can see coming on the charts. This one is too big and contains numbers that can set direction, and weather will take over to confirm direction, or abruptly change it.
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