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Jim Wyckoff's Morning Report: Markets Firmer Overnight

03 October 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - The partial U.S. government shutdown is in its third day with little to no signs lawmakers’ federal budget impasse will end soon.

There is growing anxiety in the world market place but not panic. If the situation drags on over the
weekend and into next week, then trader and investor anxiety will increase.

If confidence in the market place continues to wane, the odds will grow that market price volatility
will increase. In mid-October the U.S. government will hit its borrowing limit.

If that arguably more important matter cannot be agreed upon by U.S. lawmakers in a timely manner, then it could be a much bigger event for the market place than the current budget impasse.

Fresh U.S. budget news coming out of Washington Thursday could be market-sensitive. There is a growing notion among market watchers that what some of my readers un-affectionately call “the Washington, D.C. clown show” will prompt the U.S. Federal Reserve to continue its monthly bond-buying program (quantitative easing) at least a while longer due to the damage the present government shutdown is doing to the U.S. economy and consumer confidence.

Some U.S. government reports have been postponed due to the government furloughs, including Friday’s monthly employment report. Non-government U.S. economic reports will be issued as scheduled.

Reports overnight said China’s official non-manufacturing purchasing managers’ index rose to a six-month high of 55.4 in September, from 53.9 in August. Meantime, the Markit European Union PMI rose to 52.2 in September from 51.5 in August—the fastest growth pace in over two years for the EU.

Any PMI reading above 50.0 suggests economic growth. U.S. economic data due for release Thursday includes the global services PMI, the Challenger job-cut report, and the weekly jobless claims report.--Jim

U.S. Dollar Index

The December U.S. dollar index is slightly lower early today and hit another eight-month low overnight.

Bears remain in firm overall near-term technical command. Slow stochastics for the dollar index are neutral early today.

The dollar index finds shorter-term technical resistance at 80.155 and then at Wednesday’s high of 80.380. Shorter-term support is seen at the overnight low of 79.830 and then at 79.750. Wyckoff's Intra Day Market Rating: 4.5

NYMEX Crude Oil

November Nymex crude oil prices are slightly lower early today on a corrective pullback after Wednesday’s sharp gains.

In November Nymex crude, look for buy stops to reside just above resistance at this week’s high of $104.23 and then at $105.00. Look for sell stops just below technical support at the overnight low of $103.45 and then at $103.00. Wyckoff's Intra-Day Market Rating: 4.5


Markets were firmer overnight. Corn and soybeans are seeing some short covering following recent selling pressure.

Wheat bulls continue to gain upside near-term technical momentum. There is just not much bullish news in the grain markets at present.

The “risk-off” mentality in the market place this week is a bearish underlying factor for the grains.

U.S. harvest progress in soybeans are corn is progressing rapidly this week, which is also bearish. With much of USDA now closed, there will be a lack of fresh fundamental news for grain traders to digest, and that will likely favor the bearish camp.

TheCropSite News Desk

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any traders and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 1. Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.

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