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Jim Wyckoff's Morning Report: EPA Proposals Bearish Weight on Corn

18 November 2013
Jim Wyckoff Commentary -  TheCropSite

GLOBAL - Amid a quieter geopolitical front, the economic report highlights for this week appear to be the German ZEW business survey on Tuesday and the U.S. Federal Reserve’s FOMC minutes on Wednesday afternoon.

The Organization for Economic Cooperation and Development Monday reported the collective GDP of the world’s 34 major economies rose by 0.5% in the third quarter, from the second quarter.

Asian stock markets rallied Monday following the release late Friday of a new economic reform plan from China, following its Communist party meeting earlier last week. The plan opens up the financial and stock market sectors more, and eases restrictions on investment.

U.S. economic data due for release Monday includes Treasury international capital flow data and the NAHB housing market index.

Wyckoff’s Daily Risk Rating: 3.0 (The U.S. stock indexes continue to trek higher and hit new record or multi-year highs. There is little risk aversion in the market place to start the new trading week.)

(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day.

Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 10, with 1 being least risk-averse (most risk-on) and 10 being the most risk-averse (risk-off).

--Jim

U.S. DOLLAR INDEX

The December U.S. dollar index is near weaker early today. Bulls are fading. Slow stochastics for the dollar index are bearish early today.

The dollar index finds shorter-term technical resistance at the overnight high of 80.965 and then at Friday’s high of 81.210. Shorter-term support is seen at the overnight low of 80.690 and then at 80.500. Wyckoff's Intra Day Market Rating: 4.0

NYMEX CRUDE OIL

December Nymex crude oil prices are slightly lower early today and hovering not far above last week’s 4.5-month low.

Bears have the overall near-term technical advantage. Prices are in an 11-week-old downtrend on the daily bar chart.

In December Nymex crude, look for buy stops to reside just above resistance at $94.00 and then at $94.55.

Look for sell stops just below technical support at $93.00 and then at last week’s low of $92.51. Wyckoff's Intra-Day Market Rating: 4.5

GRAINS

Markets were narrowly mixed overnight. U.S. corn harvest is virtually complete now. Focus switches to the South American planting and growing season for soybeans and corn, and to worldwide export demand for U.S. grain.

Corn bulls remain very weak, technically. Last Friday’s news that the U.S. Environmental Protection Agency proposed to reduce the corn for ethanol component in the Renewable Fuels Standard remains a bearish weight on the corn market. Soybean bulls still have the slight near-term technical advantage.

Wheat is still technically bearish and will remain a follower of corn for at least the near term.

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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