Here’s What Today’s Stock Action Suggests

Strength in the cash markets due to logistic
problems helped support the market early in the session but ideas that the barge
movement problems will be just temporary and that export news is slow and could
get slower if futures rally helped trigger the sell-off into the mid-session.
Strength in the wheat market provided underlying support. News that South Korea
bought 157,500 tonnes of optional origin corn overnight is seen as a negative
development with cash traders believing that a bulk of this business will go to
China due to cheaper prices and lower transportation costs as compared with
either US or Argentina corn. Weekly export sales, released before the opening
Monday, are expected to come in near 600,000-800,000 tons as compared with
658,300 tons last week. The weak close left March corn down 1/2 cent on the
week. Resistance for March corn comes in at 198 and 200 1/2 with 195 3/4 and 191
as next support.

Technical Outlook

CORN (MAR) 01/24/2005: Momentum studies are still
bearish but are now at oversold levels and will tend to support reversal action
if it occurs. The market back below the 18-day moving average suggests the
longer-term trend could be turning down. The market tilt is slightly negative
with the close under the pivot. The next downside target is now at 195 1/4. The
next area of resistance is around 198 and 199, while 1st support hits today at
196 and below there at 195 1/4.

 

SOY COMPLEX RECAP

1/21/2005

March Soybeans finished down 6 1/2 at 516 3/4, 7
3/4 off the high and 1 1/4 up from the low. May Soybeans closed down 5 at 516.
This was 1 1/4 up from the low and 5 1/2 off the high.

March Soymeal closed down 3.1 at 155.8. This was
0.5 up from the low and 3.4 off the high.

March Soybean Oil finished up 0.02 at 19.58, 0.09
off the high and 0.11 up from the low.

The tightness in the cash market has supported
the basis levels and the bull spreads but the massive unsold US crop and fears
that spot supplies will gradually increase from South America in the next 6
weeks helped to limit the support. There is still talk that China may have
bought 6-8 cargoes of US soybeans this week but traders are beginning to assume
that China buying will soon shift to South America. South Korea bought 128,000
tons of South America meal overnight and traders viewed this news as negative.
More rain in the central growing regions of Brazil over the near-term is seen as
mixed with too much rain thought to be a potential problem for producers who are
beginning to harvest. A lack of rain in the southern growing areas in the
forecast is seen as potentially supportive but after last weekends hefty rain
amounts, it may take a few more weeks of dry weather to impact yield. Weekly
export sales, released before the opening Monday, are expected to come in near
500,000-800,000 tons for soybeans, 50,000-125,000 tons for meal and
10,000-30,000 tons for oil. The weak close left March soybeans down 3 cents for
the week. Resistance for March soybeans comes in at 524 1/2 and 528 3/4 with
support at 515 and 510.

Technical Outlook

BEANS (MAR) 01/24/2005: Daily stochastics are
trending lower but have declined into oversold territory. The major trend has
turned down with the cross over back below the 18-day moving average. The market
could take on a defensive posture with the daily closing price reversal down.
The close below the 1st swing support could weigh on the market. The next
downside target is now at 509 1/2. The next area of resistance is around 521 1/4
and 527 1/4, while 1st support hits today at 512 1/4 and below there at 509 1/2.

MEAL (MAR) 01/24/2005: The downside crossover (9
below 18) of the moving averages suggests a developing short-term downtrend.
Momentum studies trending lower at mid-range should accelerate a move lower if
support levels are taken out. The major trend has turned down with the cross
over back below the 18-day moving average. The daily closing price reversal down
is a negative indicator for prices. The market’s close below the 1st swing
support number suggests a moderately negative setup for today. The next downside
objective is now at 152.7. The next area of resistance is around 157.7 and
160.4, while 1st support hits today at 153.9 and below there at 152.7.

BEANOIL (MAR) 01/24/2005: Momentum studies are
still bearish but are now at oversold levels and will tend to support reversal
action if it occurs. The close below the 18-day moving average is an indication
the longer-term trend has turned down. The market tilt is slightly negative with
the close under the pivot. The next downside target is 19.38. The next area of
resistance is around 19.68 and 19.77, while 1st support hits today at 19.48 and
below there at 19.38.

 

WHEAT MARKET RECAP

1/21/2005

March Wheat finished up 1 at 295 3/4, 2 off the high and 1 1/2
up from the low. May Wheat closed up 1/2 at 302 3/4. This was 1 1/2 up from the
low and 2 off the high.

Old crop contracts were quiet early in the
session with traders waiting to see any impact on US cash markets from news that
the European Union will be subsidizing wheat exports in the weeks ahead. New
crop July wheat lead the rally on light crop concerns for the winter wheat crop
in dormancy in the southern mid-west. Overnight export news was somewhat
supportive with news of South Korea buying a total of 30,400 tons of US wheat
and Japan buying 125,000 tons of wheat at their weekly tender with 100,000 of
the total from the US. An Egypt company booked 60,000 tonnes of US spring wheat
for shipment out of the Great Lakes in the spring. Weekly export sales, released
before the opening Monday, are expected to come in near 250,000-400,000 tons as
compared with 412,100 tons last week. After a strong run into mid-session,
weakness in the other grains may have helped pull futures off of the highs to
close just slightly higher on the session with March down 1 3/4 cents on the
week. March wheat support comes in at 293 1/2 and 292 1/4 with resistance at 298
1/2 and 300 1/2.

Technical Outlook

WHEAT (MAR) 01/24/2005: Daily stochastics
declining into oversold territory suggest the selling may be drying up soon. The
market back below the 18-day moving average suggests the longer-term trend could
be turning down. It is a mildly bullish indicator that the market closed over
the pivot swing number. The next downside target is 292 1/2. The next area of
resistance is around 297 1/2 and 299 1/4, while 1st support hits today at 294
and below there at 292 1/2.

 

LIVE CATTLE RECAP

1/21/2005

February Live Cattle finished down 0.25 at 89.27,
0.27 off the high and 0.25 up from the low.

January Feeder Cattle closed down 0.47 at 105.72.
This was 0.02 up from the low and 0.52 off the high.

Cattle traded in a choppy, two-sided range ahead
of the USDA report for release on Friday afternoon. The slow pace of slaughter
this week combined with improving weather in the plains and expected weakness in
the cash market helped pressure but ideas that the futures weakness on the week
was overdone helped provide support. Boxed-beef cut-out values were down $1.42
to $152.86 at mid-session as compared with $153.93 one week ago. For this
afternoon’s USDA Cattle on Feed report, traders are looking for January 1st On
Feed supply near 99.4% of last year (98-100.5) with December placements near
98.5% (93-106) and December marketings at 103% (100-106). The report is likely
to trigger Monday’s opening tone.

Technical Outlook

CATTLE (FEB) 01/24/2005: The close below the
40-day moving average is an indication the longer-term trend has turned down.
Momentum studies trending lower at mid-range should accelerate a move lower if
support levels are taken out. The close below the 18-day moving average is an
indication the longer-term trend has turned down. It is a slightly negative
indicator that the close was under the swing pivot. The next downside objective
is 88.770. The next area of resistance is around 89.520 and 89.800, while 1st
support hits today at 89.020 and below there at 88.770.

 

LEAN HOGS RECAP

1/21/2005

February Lean Hogs finished up 1.52 at 75.87,
0.12 off the high and 1.07 up from the low.

February Pork Bellies closed up 0.37 at 94.10.
This was 0.57 up from the low and 0.57 off the high.

A firmer than expected tone in the cash market
with an outlook for heavy snow across the Midwest this weekend helped support a
strong move upward in hog futures. Ideas that futures were overdone on the
downside this week along with commercial buying support due to higher pork
values this week added to the bullish tone. April hogs closed lower on the week
after a contract high on Tuesday and the weekly closing price reversal from a
contract high could support long liquidation selling from fund traders who hold
a hefty net long position. The 2-Day Lean index for the period ending January
19th was up.28 to 73.40 as compared with 72.20 one week previous.

Technical Outlook

HOGS (FEB) 01/24/2005: The market now above the
40-day moving average suggests the longer-term trend has turned up. Momentum
studies trending lower at mid-range could accelerate a price break if support
levels are broken. The cross over and close above the 18-day moving average is
an indication the longer-term trend has turned positive. There could be more
upside follow through since the market closed above the 2nd swing resistance.
The next downside objective is now at 74.450. The next area of resistance is
around 76.470 and 76.820, while 1st support hits today at 75.300 and below there
at 74.450.

 

COCOA MARKET RECAP

1/21/2005

March Cocoa finished down 12 at 1486, 10 off the
high and 11 up from the low.

The cocoa market managed a partially negative
downside probe Friday but once again managed to reject a large portion of the
declines into the close. The US 4th quarter cocoa grind was up 3.26% and that
might have been slightly above some very non-descript expectations for the US
grind. In the end, the cocoa market needs noticeably improved fundamental
information just to turn the lightly bearish tide of prices around. At the end
of the trade it seemed like cocoa was on the verge of a return to the January
lows and that demand hopes won’t be enough to discourage the sellers.

Technical Outlook

COCOA (MAR) 01/24/2005: The stochastic indicator
is rising from oversold levels, which is bullish and should support higher
prices. The close below the 18-day moving average is an indication the
longer-term trend has turned down. The close below the 1st swing support could
weigh on the market. The near-term upside objective is at 1506. The next area of
resistance is around 1496 and 1506, while 1st support hits today at 1476 and
below there at 1465.

 

COFFEE MARKET RECAP

1/21/2005

March Coffee closed up 1.25 at 103.25. This was
1.95 up from the low and 0.15 off the high.

The coffee market managed an inside day with a
slightly higher close and that would seem to leave the general trend in the
market pointing upward. Apparently industry buying was reportedly behind the
rise and that would seem to give the market a little extra upside confidence.
Certainly the COT report shows the buildup of small spec and fund long positions
and with a simple return to the December highs it will be likely that another
new record small spec and fund long will be posted.

Technical Outlook

COFFEE (MAR) 01/24/2005: Momentum studies are
trending higher from mid-range, which should support a move higher if resistance
levels are penetrated. The major trend could be turning up with the close back
above the 18-day moving average. The market has a slightly positive tilt with
the close over the swing pivot. The next upside target is 104.90. The next area
of resistance is around 104.25 and 104.90, while 1st support hits today at
102.20 and below there at 100.70.

 

SUGAR MARKET RECAP

1/21/2005

March Sugar closed down 0.08 at 8.88. This was
0.06 up from the low and 0.11 off the high.

May sugar closed 5 lower on the session with an
outside day on the charts as the attempt to move higher for the 8th session in a
row failed. Ideas that India and Pakistan will continue an active buying spree
helped support the recent bounce but with hefty exportable surplus in Brazil and
Brazil internal prices on a downtrend since mid-December, the commercial selling
activity may help offset the cash buying. In addition, traders are getting a bit
nervous over the failure of March sugar to move much above 9.00 with speculators
holding a massive net long position concentrated in the March contract.

Technical Outlook

SUGAR (MAR) 01/24/2005: Stochastics are at
mid-range but trending higher, which should reinforce a move higher if
resistance levels are taken out. The major trend could be turning up with the
close back above the 18-day moving average. The downside closing price reversal
on the daily chart is somewhat negative. The close below the 1st swing support
could weigh on the market. The next upside target is 9.06. The next area of
resistance is around 8.96 and 9.06, while 1st support hits today at 8.80 and
below there at 8.73.

 

COTTON MARKET RECAP

1/21/2005

March Cotton finished down 0.61 at 46.97, 0.43
off the high and 0.82 up from the low.

March cotton closed sharply lower on the session
on follow-through technical selling after a reversal from a 3-month peak on
Thursday triggered aggressive selling near the opening. The market expects China
to be a very active buyer in the first quarter of this year but the recent sharp
rally may have helped pull cash cotton onto the market as producers move some of
their huge stocks. Weekly export sales, released before the opening Monday, are
expected to come in near 270,000-325,000 bales as compared with 261,700 bales
last week. Cumulative sales are running well behind the pace to reach the USDA
production so traders are expecting to see strong sales or recent spec buyers
could get nervous.

Technical Outlook

COTTON (MAR) 01/24/2005: A bearish signal was
triggered on a crossover down in the daily stochastics. Stochastics turning
bearish at overbought levels will tend to support lower prices if support levels
are broken. The cross over and close above the 18-day moving average indicates
the longer-term trend has turned up. The gap down on the day session chart is
bearish with more selling pressure possible today. The market’s close below the
1st swing support number suggests a moderately negative setup for today. The
next downside target is 45.63. The next area of resistance is around 47.59 and
48.12, while 1st support hits today at 46.35 and below there at 45.63.