Ag Financial Strategies Ag Financial Strategies ag-financial.com 1-877-580-AGFSMarket Commentary 11/18/09
¥ Weather- RFP Chicago Precip index model suggests a long term peak was placed in June and trend is for less precipitation
into late 2010 with potential to evolve into outright down trend. The RFP Chicago Temp index suggests the correctly forecast cool trend for 2008 to 2009 should come to an end now but can delay until
spring to allow for a cold winter. This trend is assumed to be a correction of larger global warming trend so temps will rise 2010 to 2012, once the current cool trend is reversed. There are sunspot and
cosmic radiation trends that are turning now and could lead to increased global warming into 2012.
¥ Trade- Harvest is near over for soybeans and also for harvest hedge pressure, demand market now and demand seems strong for commodities
as the global economies grow. Corn harvest is still one of the slowest past 30 years and may never be totally complete. Inflationists return to the commodities sector as seasonal trends turn up into summer.
¥ Model summary- Bullish commodities 2010. Economy and other markets- The DOW stock index model states long
term trend is up from 2009 into early to mid 2010 and then should turn down for late 2010. There is a mnodel script that states the decline could be very limited in that the DOW did not place decadal business
cycle top in 2007 and will return to near current record high and ideally will make a new record high no later than 2012. Preferred script at this time paints a slower momentum picture for stocks and any serious bearish
forecast is now down to 5% probability. We have seen a buy of a life time. The current 3yr business cycle trend forecast states that breach of the 10.236 level, which was honored albeit on a very short
term basis, creates a forecast for 10,600 to 10,800 and then 12,000. China and Brazil stock indexes could add 13% for 2010, Russia 24%, Israel 14%, India 16%. Goldman Sachs commodity index can add 25% for 2010. The US dollar is in a bear market into June 2010 although the lowest value may arrive earlier. The dollar is due to trend lower per intermediate trend into
late December to early January. There is an objective for a 4% decline to near 72. Agriculture Energy Markets-Corn- A long term trend
is up into summer 2010 (perhaps later) with minimum objective of $5 per the annual corn report and now there are updated studies suggesting the ideal is $5.50 to $5.80. The intermediate trend turned up from November's
low and this trend should last into late December to mid January with potential for $4.50 to $4.80. A short term trend is up into next week with potential for $4.30s to $4.40s.
Wheat- The long term trend is up with potential for $8.00 to $9.00. The intermediate trend is up into late December to early January with objective of $6.50 to $6.75 MAR. The short term
trend is up into next week with potential for $6.10s to $6.30s MAR Chicago. Soyoil- The long term trend is up into summer 2010 with potential for 46
to 55 cents. The intermediate trend is up into year end if not early January with potential for 42 to 45. The short term trend is up into next week with objective of 41 to 42.
Agriculture Protein Markets-Soybeans- A long term trend is up into summer 2010 and allowed to extend to year end with potential for $14.00 to $15.00. The intermediate trend
is up into near yearend to early January with objective of low $11.00s and next objective the low $12.00s. The short term trend basis MAR is up into next week with objective of $10.40 to $10.60s.
Soymeal- A long term trend is up into summer 2010 with potential for $360 perhaps higher. The intermediate trend is up into late December to mid January with $320s objective basis MAR. The short term
trend is up into next week with potential for $306 but there are alternate model scripts that allow for higher than this and if this occurs the intermediate objective may be raised. Past results are not necessarily indicative of future results. This document is met for informational purposes only.
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