Electronic futures again started out slowly this morning, with both May and July trading either side of unchanged but leaning on the higher side for the most part. There was little fundamental news out this morning, and there appeared to be only a small amount of cash business overnight, but prices did start out a little firmer once the open outcry market began.
Prices stayed firm throughout the first half of the session, however once again there was virtually no impetus, trading in a 25 point trading range throughout the first half. Spread trading was tight, with the May / July mostly trading between 95 and 100 points. May / December narrowed in a little after tracking as wide as 565 recently to trade around 555.
Options activity mostly revolved around May position cleaning, with one of the major merchants being a huge out of the money call buyer. Prices rallied late in the session, mostly on the back of strong gains in Soybeans and the corresponding electronic market buying in Cotton, and having run through stops we saw active closes of 35-51 points. Estimated volume for the day was 16,500 lots.
In a survey conducted by Dow Jones Newswires, there was a consensus of 12.3 million acres for the USDA planted acreage estimate which is due out on Friday morning. From 10 surveyed companies, mostly brokerage desks, a high of 12.8 and a low of 11.8 were established.
For the record we are expecting a figure closer to 12.4-12.5 from the USDA. The most interest appears to be directed towards the grain numbers, particularly the Corn acreage which could see in excess of a 10 million acre increase.
US exports have been up trending of late, reflecting good sales into China, Turkey and Mexico in particular. For tomorrow we are expecting more robust figures close to 250,000 sales and 250,000 shipments.
The May contract put in a solid performance, pushing above yesterday’s highs and into new recent highs around the 54.00 area where is ran into resistance. In particularly the 50 day simple moving average became overhead resistance late at the 53.95 area.
Trend line resistance is also waiting just above the market at 54.00, so a rally through this level would likely spark a lot of spec short covering, with next resistance at 55.60. Momentum is neutral, with the RSI at 53.28.
