More Reasons The Dollar Could Go Lower

It was quiet and choppy trade on Wednesday with a
lack of aggressive sellers or buyers ahead of the holiday. Futures are oversold
near the low end of the recent trading range but slow export news and ideas that
China is a more aggressive exporter helped to limit the buying support on a
bounce. Spread trade was active with positioning ahead of first notice day for
December corn. South Korea is tendering for 55,000 tons of For the weekly export
sales report, released before the opening Friday, traders are looking for corn
sales near 700,000-900,000 tons as compared with 724,700 tons last week.

Technical Outlook

CORN (MAR) 11/26/2004: Momentum studies are
declining, but have fallen to oversold levels. The market’s close below the
9-day moving average is an indication the short-term trend remains negative. The
market’s close below the pivot swing number is a mildly negative setup. The next
downside objective is now at 207 1/2. The next area of resistance is around 208
3/4 and 209 1/4, while 1st support hits today at 207 3/4 and below there at 207
1/2.

 

SOY COMPLEX RECAP

11/24/2004

January Soybeans finished down 7 1/4 at 554, 7
1/4 off the high and 1/2 up from the low. March Soybeans closed down 8 at 556
1/2. This was 1/2 up from the low and 8 off the high.

January Soymeal closed down 1.5 at 161.1. This
was 0.7 up from the low and 2.1 off the high.

January Soybean Oil finished down 0.56 at 21.11,
0.27 off the high and 0.01 up from the low.

News from the USDA that the suspected case of mad
cow in the US came up negative helped pressure meal prices early and oil was
under pressure from weakness in palm oil futures. The monthly Census crush
report was also a negative factor with the crush for October pegged at 155.96
million bushels as compared with trade expectations at 156 to 158 million. With
the lower than expected crush, one would expect that stocks of meal and oil
would be below expectations but stocks were up. Oil stocks were pegged at 1.27
billion pounds as compared with trade expectations of 1.1-1.195 billion pounds.
Meal stocks were 357,892 tons. Basis levels were firm. For the weekly export
sales report, released before the opening Friday, traders are looking for
soybean sales near 600,000-800,000 tons, meal sales near 75,000-125,000 tons and
oil sales at 5,000-10,000 tons.

Technical Outlook

BEANS (JAN) 11/26/2004: Studies are showing
positive momentum but are now in overbought territory, so some caution is
warranted. The market’s short-term trend is positive on the close above the
9-day moving average. The close below the 1st swing support could weigh on the
market. The near-term upside objective is at 563 1/4. The next area of
resistance is around 557 3/4 and 563 1/4, while 1st support hits today at 550
1/4 and below there at 548.

MEAL (JAN) 11/26/2004: Momentum studies are
trending higher but have entered overbought levels. The close above the 9-day
moving average is a positive short-term indicator for trend. The market tilt is
slightly negative with the close under the pivot. The near-term upside target is
at 166.3. The next area of resistance is around 164.3 and 166.3, while 1st
support hits today at 160.9 and below there at 159.4.

BEANOIL (JAN) 11/26/2004: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The market’s close below the 9-day moving average is an indication the
short-term trend remains negative. The gap lower price action on the day session
chart is a bearish indicator for trend. The defensive setup, with the close
under the 2nd swing support, could cause some early weakness. The near-term
upside target is at 21.70. The next area of resistance is around 21.40 and
21.70, while 1st support hits today at 20.96 and below there at 20.81.

 

WHEAT MARKET RECAP

11/24/2004

December Wheat finished down 1 1/4 at 299 1/4, 2 3/4 off the
high and 3/4 up from the low. March Wheat closed down 1 at 310. This was 2 up
from the low and 2 3/4 off the high.

Early weakness came as a surprise for wheat
traders who expected higher trade after the active export news overnight. Egypt
bought 120,000 tons of US wheat overnight and Taiwan bought 43,000 tons of US
wheat. Soft red wheat basis was steady/firm in the country due to light producer
selling. For the weekly export sales report, released before the opening Friday,
traders are looking for wheat sales near 350,000-450,000 tons as compared with
502,500 tons last week. Under 308 for March wheat, 298 becomes next downside
swing objective with resistance at 311 ½.

Technical Outlook

WHEAT (MAR) 11/26/2004: The upside crossover (9
above 18) of the moving averages suggests a developing short-term uptrend. Daily
stochastics declining into oversold territory suggest the selling may be drying
up soon. The market’s short-term trend is negative as the close remains below
the 9-day moving average. It is a slightly negative indicator that the close was
lower than the pivot swing number. The next downside objective is 305 1/2. The
next area of resistance is around 312 1/4 and 314 3/4, while 1st support hits
today at 307 3/4 and below there at 305 1/2.

 

LIVE CATTLE RECAP

11/24/2004

December Live Cattle closed up 2.65 at 89.90.
This was 2.00 up from the low and 0.25 off the high.

January Feeder Cattle finished up 2.55 at 102.27,
0.45 off the high and 1.22 up from the low.

News that the suspected case of mad cow was a
false alarm combined with bullish weather for the southern plains helped support
solid gains for cattle. Mud has already caused significant stress to feedlot
cattle and more snow and rain for the next week should keep the supply of
market-ready cattle a little tighter than expected. Boxed-beef cut-out values
were up 6 cents at mid-session to $138.13 as compared with $138.49 last week at
this time.

Technical Outlook

CATTLE (DEC) 11/26/2004: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. A positive signal for trend short-term was given on a close over the
9-bar moving average. The gap upmove on the day session chart is a bullish
indicator for trend. The market’s close above the 2nd swing resistance number is
a bullish indication. The next upside objective is 91.700. The market is
approaching overbought levels with an RSI over 70. The next area of resistance
is around 91.020 and 91.700, while 1st support hits today at 88.800 and below
there at 87.220.

 

LEAN HOGS RECAP

11/24/2004

December Lean Hogs closed up 0.45 at 76.55. This
was 0.85 up from the low and 0.40 off the high.

February Pork Bellies finished up 0.40 at 101.15,
0.65 off the high and 0.75 up from the low.

February hogs pushed into new contract highs with
December hogs at new contract highs for the second day in a row. The discount of
futures over the cash market has helped to provide support. A negative reading
for the mad cow test failed to pressure the market as demand for pork has
remained firm and cash markets remain steady. A large slaughter is expected for
Saturday of near 300,000 head which should help keep producers stay current with
marketings. The CME 2-Day Lean Index for the period ending November 22nd was
reported at 78.69, down $.11 from the previous session and up from 76.19 the
previous week. Weekly average weights for Iowa/Minnesota for the week ending
November 20th came in at 268.3 pounds as compared with 267 the previous week and
266.1 pounds last year.

Technical Outlook

HOGS (DEC) 11/26/2004: The market rallied to a
new contract high. Rising stochastics at overbought levels warrant some caution
for bulls. The market’s close above the 9-day moving average suggests the
short-term trend remains positive. The close over the pivot swing is a somewhat
positive setup. The near-term upside objective is at 77.670. The market is
becoming somewhat overbought now that the RSI is over 70. The next area of
resistance is around 77.150 and 77.670, while 1st support hits today at 75.950
and below there at 75.200.

 

COCOA MARKET RECAP

11/24/2004

December Cocoa finished up 17 at 1610, equal to
the high and 30 up from the low.

The cocoa market showed extremely narrow early
action despite the fact that the market saw reports of serious declines in Ivory
Coast arrivals. In fact, Ivory Coast arrivals showed a decline of 25% to 50% and
part of that is due to recent violence and part is due to quality control and
finally some is due to farmer holdbacks. Therefore, the supply threats are not
permanent and therefore they only partially support the overall price structure.
However, industry buying continues to be seen and that is supporting prices.

Technical Outlook

COCOA (DEC) 11/29/2004: Negative momentum studies
in the neutral zone will tend to reinforce lower price action. The close below
the 9-day moving average is a negative short-term indicator for trend. There
could be more upside follow through since the market closed above the 2nd swing
resistance. The next downside objective is now at 1573. The next area of
resistance is around 1625 and 1632, while 1st support hits today at 1595 and
below there at 1573.

 

COFFEE MARKET RECAP

11/24/2004

December Coffee closed down 0.35 at 88.90. This
was 1.50 up from the low and 1.10 off the high.

March coffee was pressured by speculative profit
taking and producer sales, but roaster buying came in on the break to trim
losses. While the market is overbought, critical support at 90 could hold as
traders may not want to push the market sharply lower ahead of the Brazil’s crop
forecast expected to be released mid-December. However, a close below 90 could
pressure March coffee back to 88.00 based on a .382 retracement of the October
low to November high range. At the auction on Wednesday, Brazil’s government
nearly sold all of the 50,000 bags offered. NYBOT certified coffee stocks fell
to 4.568 million bags Monday down from 4.572 million bags last Friday.

Technical Outlook

COFFEE (DEC) 11/29/2004: Momentum studies
trending lower at mid-range should accelerate a move lower if support levels are
taken out. The market’s close above the 9-day moving average suggests the
short-term trend remains positive. It is a slightly negative indicator that the
close was under the swing pivot. The next downside objective is 86.25. The next
area of resistance is around 90.20 and 91.40, while 1st support hits today at
87.65 and below there at 86.25.

 

SUGAR MARKET RECAP

11/24/2004

March Sugar closed up 0.11 at 8.97. This was 0.16
up from the low and 0.01 off the high.

March sugar prices made solid gains on Wednesday
taking out the previous high for the month at 893 with puts the next near-term
upside target at 909. Concerns of short sugar supplies in Asian countries and in
India have traders expecting a pickup in cash physical business. The impact of
drought conditions has government officials in Thailand lowering their country’s
cane crop to 58.4 million tons, down from 60 million tons last month. However, a
typhoon headed to the region could be needed rains. Reports that Egypt is
looking to buy 30,000 of raw this weekend while Syria is expected to purchase
sugar by mid-December have given the bulls reason enough to buy.

Technical Outlook

SUGAR (MAR) 11/29/2004: Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. A positive signal for trend short-term was given on a close over the
9-bar moving average. The outside day up and close above the previous day’s high
is a positive signal. The market has a bullish tilt coming into today’s trade
with the close above the 2nd swing resistance. The near-term upside objective is
at 9.10. The next area of resistance is around 9.05 and 9.10, while 1st support
hits today at 8.89 and below there at 8.77.

 

COTTON MARKET RECAP

11/24/2004

December Cotton finished down 0.60 at 48.40, 0.75
off the high and equal to the low.

The market experienced follow-through technical
selling on Wednesday after the weak action into the close Tuesday. Trade was
quiet ahead of the long 4-day holiday weekend. Sunny weather in Lubbock Texas
helped to ease fears of quality problems for the harvest and clear weather is
expected until at least early next week when more rain could hit the area on
Tuesday. For the weekly export sales report, released before the opening Friday,
traders are looking for cotton sales near 150,000-180,000 bales as compared with
265,700 bales last week. With the weak US dollar, government incentives to
export and low prices, traders expect to see active sales.

Technical Outlook

COTTON (DEC) 11/29/2004: Studies are showing
positive momentum but are now in overbought territory, so some caution is
warranted. The market’s short-term trend is positive on the close above the
9-day moving average. The outside day down and close below the previous day’s
low is a negative signal. The close below the 1st swing support could weigh on
the market. The next upside objective is 49.33. The next area of resistance is
around 48.77 and 49.33, while 1st support hits today at 48.03 and below there at
47.84.