By Matthew Pierce
Friday saw a low volume messy trade with corn actually fighting to the upside after a lower session all day. This was due to continued talk of problems with corn yields and further discussion of delta quality failing to meet CME delivery standards. To give an idea on volume, on Thursday the market traded over 200K in corn options, on Friday they traded 50K. Many in the trade were on the sideline waiting to hear about margin issues with energy sector commodities while even more were waiting to hear about the US credit rating which hit over the weekend. Overall the session was lackluster was weak with beans and wheat fighting off lows but doing so lacking conviction.
Over the weekend the other shoe fell as the S&P downgraded the US debt rating to AA from AAA. This caused a major flushout in crude along with other energies, Asian markets and European market values in spite of the expected weakness in the USD. I have to question the weakness in the Euro after comments from the ECB stating they were more than willing to jump in and buy both Spanish and Italian bonds. Are we not the country that is tanking? How is the USD so much stronger than the Euro this morning? Overnight saw a choppy market with corn trying to break above even but unable with beans holding the lead to the downside all session. Bean oil is now a technical mess following Friday’s break under the support line with this continuing overnight. This is simply a factor of crude oil liquidation which is trading around $83.00 this morning. The only thing that was shiny overnight and into today is gold which eclipsed $1,700.00 per ounce.
Heading into the day session there is nothing good to base any reversal momentum on. Weather is bearish for the northern half of the country with below average temps still sitting around. Both the 6-10 day and 8-14 day models have the north and south breaking apart with anything south of I-80 looking bullish while anything north is bearish. The one exception here is the continual rains hurting the spring wheat crop in ND following a week of heavy rains. Overall it is a bearish start to the week with the USDA report looming on Thursday. Bears will likely win to start but I would not get married to negative momentum in corn and crude for that matter.
Source: www.Pitguru.com