Tuesday 04-03-12 Heartland Newsletter  04/03/12 9:41:18 AM Printer Friendly VersionPrinter Friendly Version

 


 

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April 03, 2012
www.heartlandinvest.com 701-222-0221 or 1-800-359-0221
 
 
 
 
 
What I've Learned


 
    "Attitude is controlled by you. 
Your circumstances change when your attitude changes."

 

Commentary
What a day Friday was. We had said that the acreage report, for corn, once released would be a non-event as long as it was not over 96 million acres for corn. March 1 corn stocks were the lowest in eight years while usage during the quarter was the highest in history. The marketplace must now ration usage enough over the next six months to avoid a critical shortage. Soybean stocks were the highest in four years and very close to expectations. However, the much lower acreage intentions indicate the carryover will need to be as large as possible to provide the supply needed for the coming season. Wheat stocks were very close to expectations, but the lowest in three years. With US corn supplies at the lowest level in eight years, greater feeding of wheat will be required to meet the corn shortage. Combined corn/wheat stocks were 738 million bushels below a year ago, which could be very dangerous if new crop supplies don't come early and often.

The reality is that 2012 still shares something with 1988, 1996 and 2008. I continue to expect corn, bean and wheat prices to grind higher, with large swings that should culminate with better price opportunities into June/July. Just to give you an idea what I am expecting as upside objective for a minimum, I would look for $9.00 old crop HRS wheat tested, $7.00 old crop corn tested and $15.00 beans. Now understand that if they get within a dime, close in this business is a direct hit. Prices higher then this require unfavorable weather, FED intervention and Chinese demand for corn. As those elements develop we will adjust our sights higher.


 

US Dollar Intraday Chart    

 

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Corn

Corn regretfully fell through our reported major support at 630 for two days and the robo-computor traders paid dearly for believing their own hype. 670-675 should be challenged soon, with a close above that creating a quick test of 7.00. Setbacks should find willing buyers in the 638-645 price range.

May Corn Daily Chart

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Beans

 Soybeans have been relentless in their accent and 1450-1455 is the last major resistance point before it is open season on the all time highs.  You can also see on the monthly charts we are in a 5th wave rally that projects to the 1570 value.   As you can see the technicals match the news, and seasonally we are in a window where price advances can occur.  
 

 Spot Bean Monthly Chart

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Wheat

 We closed above the important 845 value, confirming the major support for Mpls wheat at 790 is now a launching pad for an advance of some kind.  The only question is to what magnitude.  I look for 9.00 as a minimum with the prospects of 9.50-9.60, a price that is not crazy talk anymore.

    Spot MPLS Wheat Daily Chart

 

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Live Cattle and Feeder Cattle
Liquidation continues in cattle futures as the market is trying to find a place of equilibrium to forge a trading range low.  Choice cutouts were 97 cents higher at midday (184.34) and packer margins are about $107 in the red.  Spot live cattle futures are trading at the 78% retracement support zone.  If that gives way, 116 could be in their sights.  That would probably take spot feeders to the 145 valley support area.

  April Live Cattle Daily Chart

 

August Feeder Cattle Daily Chart

Gold

Gold has recharged itself and with a new month upon us, new buyers will probably attempt a test of the 1710-1725 area.  As long 1660 holds on a closing basis, you should be able to buy with expectations of some kind of recovery in gold prices this month.

Gold Daily Chart

gold chart

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Crude

Crude oil briefly slipped below the 103.00 support value with the end-of-the month liquidation and quickly found buyers on the opening day of April to get it comfortably back above it.  Unless the US$ starts to slip lower, which it may do, or concerns with Iran start to escalate, oil buyers are getting tired of owning and waiting for an upside resolution.  That is the reason of the late month selling we had seen last Thursday / Friday.  If one of the two events that I mentioned do not manifest soon, and I mean in the coming weeks, a large liquidation will take place.  Recall that crude oil had peaked in the opening days of May the last two years in a row, and those tops were the highs of the year.   Do you see what I'm getting at here; all news is priced into the market for now.  By the time we get to May the buyers will become very uncomfortable if we don't break out above 110.00.

                                                         May Crude Oil Daily Chart

  
 

04-02-12

 
Link (in blue) below to view the latest market prediction interview on KFYR - TV:

--> Watch Eugene On the News <--
 
 

 

 
 
 
» Hedge Recommendations

 

Corn:

2011 production

1-24-12 Sold 20% @ 634 March.

1-11-12 sold 20 % at 653 March.

8-24-11 sold 20% at 7.42 December. 

3-30-11 sold 20% at 608 March 1012


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Soybeans:

2011 production

1-24-12  Sold 20% @ 1225 March.

1-11-12 Sold 20% at 1207 March.

3-19-11 Sold 20% of 2011 beans at 1350 on the November 2011 contract.

10-14-11 Sold 20% of 2011 production at 1281 on the Jan. 2012 contract.  

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 HRS Wheat:  

2011 production

2-28-12 Cashed a 22 cent profit in on a 40% futures sale to be added to a cash sale.

2- 1-12 Sold 20% of 2011 crop on the May contract at 828

1-11-12 Sold 20% on the board at 816 March with basis not locked.

8-24-11 sold 20% at 931 December.

3-29-11 Sold 20% at 910 on the Dec 2011 HRS contract.  For winter wheat producers sold the Sept KC wheat at 883.


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Cattle

 
 
 For January, March, April, and May Feeder Cattle...Covered 100% of production buying puts and selling calls. Covered the calls in the December break near $1.00 for most.

 
NOTE: With the exception of livestock, all trades will be entered in the electronic markets unless otherwise noted. Hedge recommendations and Trade recommendations are totally separate, and may sometimes conflict with one another. It is strongly suggested that Spec trades and Hedge trades be done in separate accounts.
 
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A word to the Wise             

              

Past performance is not indicative of future results. The information contained in this report is intended for informational purposes only and is the opinion of the writer and may change at any time. This information was compiled from sources believed to be reliable to Heartland Investor Capital Management , Inc. but accuracy cannot be and is not guaranteed. There is no warranty, expressed or implied, in regards to this information for any particular purpose. There is SIGNIFICANT RISK of LOSS involved in trading futures and / or options on futures and may not be suitable for all investors. Investors should consider these RISKS and evaluate their suitability based on their financial conditions. No one should ever consider trading futures or options on futures with anything other than RISK CAPITAL . NO LIABILITY  on the part of the author exists for any trading loss you may incur in the use of this information. The information contained in this newsletter is privileged, confidential and protected from disclosure. Any further disclosure or use, distribution, dissemination or copying of this message or any attachment is strictly prohibited.

Newsletter provided by Heartland Investor Capital Management, Inc. a registered CTA with the NFA, of which Eugene Graner is principal. This entity is a separate legal entity from the Introducing Broker Heartland Investor Services.

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Copyright © 2012 Heartland Investor Capital Management All rights reserved




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