Market Analysis & Strategy

www.powerlinegroup.net
specializing in Managing Price Risk Margin Protection Budget Security OTC Product Structures Powerline Group #7 Dunlap Court Savoy, IL, 61874 Darren Dohme Office: 888-605-6051 Office: 217-351-9030 Cell: 217-840-7938 darren@ powerlinepetroleum.com David Chatterton Office: 888-605-6051 Office: 217-351-9030 Cell: 217-898-5320 dave@ powerlinepetroleum.com Bethany Dowling Office: 888-605-6051 Office: 217-351-9030 bethany@ powerlinepetroleum.com

Tuesday, November 29, 2011

March Corn: Technical price pattern reading. Technically, the corn bull market ended back on August 29th at $7.89 on the March futures. March corn sold off $2.03 per bushel and then bounced up on a 38% retracement in that $6.70 area. The inability for the market to hold and then retest the low is further conformation that the bear trend has resumed. Technically, March corn should not be able to rally back up into the $6.40 area. Visualize this. This market is like a bouncing ball that reached its apex bounce on August 29th. We are now starting the downward bounce cycle of lower highs and lower lows. The only difference is, this ball is bouncing on a table top. That table top is at $5.88. Technically the corn ball wants to bounce up maybe to the $6.20 level and then bounce down again. The problem is the corn ball is headed to the end of the table. This downward bouncing price pattern is forming a descending triangle pattern. In charting text books, when you break out of the triangle you go the distance measured from the highest bounce to the floor. These descending triangles breakout in the direction they are headed in at over 80% of the time and normally reach their price measurement objective 60% of the time. (Google descending triangles). That measurement is $2.00 per bushel. As we bounce along this table top, the triangle gets smaller and smaller, to the point we are about to bounce off the table. People, that downward bounce measures $2.00 per bushel below the support of $5.88. That downward measurement scares everyone to death and fundamentalist start throwing out all the bullish fundamental support talk they can to say that $3.88 corn is out of the question. So lets soften up the measurement and lets just measure from the smaller triangle of $6.75 down to $5.86. This is roughly half the distance down to 86 cents below the support line. Downside measuring objective is $5.00. I am not going to gloss over the downside measuring price objective. It is what it is. China and the weather can change this price pattern. But right now, when we get two closes below $5.86, let that be confirmation that we are headed down to $5.00 March corn.

March Corn Chart: This daily chart has support at $5.88 area. This is a must hold area or the corn market is head much lower. Right now, only a close over $6.70 will negate the bearish formation.
$2.00 triangle Apex

86 cents

$5.892

$5.86

$5.882

The chart below is a weekly continuation chart for corn. Even this chart measure down to $4.00. 2008 high

This could be the 2012/2013 trading range for corn. $2.90 low $2.96 low

Farmers/ producers, it is strong advised that you step up your corn sales and or get corn option hedges strategies in place ion this correction rally. Call us for corn option strategies that will best fit your needs. Fundamentally, this corn market only has 3 things it can hang its hat on and they are 1. Ethanols strong margins. 2. Strong cattle feeding margins and record beef exports. 3. Strong hog feeding margins and record pork exports. The USDAs corn export projections for December August of this marketing year would be the lowest in 14 years. Our two best corn buying customers, Weekly chart on March Japan and S. Korea are buying corn from the corn. You can clearly see Ukraine because it is substantially cheaper. China the breaking support at will continue to buy corn from S. America. If you $5.88 will open the were China and you just had a record crop and you downside to $5.00. knew the US was going to plant 94 mln acres of corn and have ending stocks next year close to 1.4 bln bushels, you wouldn't be a buyer until later next year. China is importing cheaper feed wheat right now from Australia to replace corn usage. World wheat stocks are almost burdensome. We are going to plant close to 94 mln acres of corn next spring. The odds of having a 3rd consecutive year of below trend line yields are very low. Corn ending stocks are forecasted to jump from this years 800 mln bushels to 1.4 billion bushels. Some are predicting 1.6 bln bushels. That alone suggest sub $4 corn. The European financial crises is going to worsen before it gets better. If the Euro collapses, traders will rush back into the US Dollar. The dollar will rally up into the 90s making all our US commodities to expensive to export. The strong dollar will undo the weak dollar commodity rally. December 13th FOMC meetinglook for QE3 possible bullish wild card to support the markets..The end of my bearish
forecast???

(c) 2011 by Powerline Petroleum, LLC. Reproduction or electronical transmission to other companies or individuals in any form is strictly prohibited without written permission of Powerline.
Commodity trading is risky. Powerline assumes no liability for the use of any information contained herein. Past financial results are not necessarily indicative of future performance. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any examples given are strictly hypothetical an no representation is being made that any person will or is likely to achieve profits or losses similar to those examples.

Corn exports projections by the USDA for the December through August time frame is looking to be the lowest in 9 years and would also be the 2nd lowest in 14 years. Japan and South Korea, two of our best corn buying customers have recently bought corn from the Ukraine and China continues to be a buyer of S. American corn. There are only 3 things hold our corn prices up at current values and they 1. strong ethanol margins. However the ethanol blender tax credit is set to expire in 30 days. Will this effect ethanol demand? 2. Cattle feeding margins are still very strong being held up by a record export demand. 3. Hog feeding margins are also very strong, being help up by very strong export demand. Oh I could go on about Chinas new year approaching , slower demand, S. Americas great start for their crops and a much large corn crop expected their.

Italy's borrowing costs hit a euro lifetime peak of nearly 8 percent on Tuesday as pressure on euro zone finance ministers intensified to staunch a two-year-old debt crisis that is blighting the world economy. Rome had to offer a record 7.89 percent yield to sell 3-year bonds, a huge leap from the 4.93 percent it paid in late October, and 7.56 percent for 10-year bonds, compared with 6.06 percent at that time. Midwest corn and soybean growers could see savings of $2 to $3.50 an acre on their crop insurance premiums next year after USDA's Risk Management Agency re-rated the two crops using a new formula. RMA on Monday announced the results of re-rating states actuarially, using a 20-year rolling average (currently 1990 through 2010). "On average, these new rates should reduce corn farmers' rates by 7% and soybean farmers' by 9%," said RMA Administrator Bill Murphy. Given most Midwest farmers pay between $30 and $50 an acre for crop insurance, they could see savings of $2 to $3.50 per acre. American Airlines, Inc., the world's fourth largest airline in passenger miles transported and operating revenues, said on Tuesday that its parent company, AMR Corporation, and certain United States-based subsidiaries have voluntarily filed for Chapter 11 reorganization under United States law. The bankruptcy filing by American has been anticipated by the market for many months. American took this action in order to achieve a cost and debt structure that is competitive in the airline industry so that it can continue delivering a world-class travel experience for its customers. American expects to continue normal business operations throughout the reorganization process, and the business will continue to be operated by the Company's management.

(c) 2011 by Powerline Petroleum, LLC. Reproduction or electronical transmission to other companies or individuals in any form is strictly prohibited without written permission of Powerline.
Commodity trading is risky. Powerline assumes no liability for the use of any information contained herein. Past financial results are not necessarily indicative of future performance. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any examples given are strictly hypothetical an no representation is being made that any person will or is likely to achieve profits or losses similar to those examples.

We are Wall Street. Its our job to make money. Whether its a commodity, stock, bond, or some hypothetical piece of fake paper, it doesnt matter. We would trade baseball cards if it were profitable. I didnt hear America complaining when the market was roaring to 14,000 and everyones 401k doubled every 3 years. Just like gambling, its not a problem until you lose. Ive never heard of anyone going to Gamblers Anonymous because they won too much in Vegas. Well now the market crapped out, & even though it has come back somewhat, the government and the average Joes are still looking for a scapegoat. God knows there has to be one for everything. Well, here we are. Go ahead and continue to take us down, but youre only going to hurt yourselves. Whats going to happen when we cant find jobs on the Street anymore? Guess what: Were going to take yours. We get up at 5am & work till 10pm or later. Were used to not getting up to pee when we have a position. We dont take an hour or more for a lunch break. We dont demand a union. We dont retire at 50 with a pension. We eat what we kill, and when the only thing left to eat is on your dinner plates, well eat that. For years teachers and other unionized labor have had us were too busy working to notice. Do you really think that we teaching 3rd graders and doing landscaping? Were going to jobs with tenure and 4 months off a year and whine just like so-o-o-o underpaid for building the youth of America. Say your overtime and double time and a half. Ill be hitting grounschool baseball team for $5k extra a summer, thank you very much. So now that were going to be making $85k a year without upside, Joe Mainstreet is going to have his revenge, right? fooled. We are incapable of take your cushy you that we are goodbye to ders to the high

gocar, we

Wrong! Guess what: were ing to stop buying the new 80k

(c) 2011 by Powerline Petroleum, LLC. Reproduction or electronical transmission to other companies or individuals in any form is strictly prohibited without written permission of Powerline.

Commodity trading is risky. Powerline assumes no liability for the use of any information contained herein. Past financial results are not necessarily indicative of future performance. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any examples given are strictly hypothetical an no representa-

arent going to leave the 35 percent tip at our business dinners anymore. No more free rides on our backs. Were going to landscape our own back yards, wash our cars with a garden hose in our driveways. Our money was your money. You spent it. When our money dries up, so does yours

Open interest of our set of 43 listed commodity futures ($976 billion) has fallen back to the 2008 peak (Exhibit 23). The global listed open interest of these commodities is equal to only 9.8% of US M2 (Exhibit 28). Commodity velocity is below the mid-cycle normal (Exhibit 24). Capitalization of the NYSE is 21.8 times the open interest of the listed commodities group (Exhibit 25). Capitalization of the S&P 500 is 14.0 times the size of the listed commodities group (Exhibit 26). Capitalization of the Bloomberg World Equity Index is 48.6 times the size of the listed commodities group (Exhibit 27). Using current prices, global physical production risk in 29 commodity markets (the associated physical markets with the futures markets in Exhibit 23) will alone likely exceed US$9.5 trillion in 2011 (Exhibit 29).

Dave Chatterton, Darren Dohme Powerline Group - Champaign, IL (217) 351-9030

dave@powerlinepetroleum.com darren@powerlinepetroleum.com Keith Gehling, Kurt Koester AgriSource, Inc (866) 472-4678 keith@agrisourceonline.com kurt@agrisourceonline.com Kenneth V. (Ken) Dunn RBC Wealth Management (903) 579-0863 Direct kenneth.dunn@rbc.com Cy Monley, Tyler Silveus Silveus Insurance Group (800) 531-9909 cy.monley@cropins.net tyler.silveus@cropins.net Jack Wooldridge JJJ Commodities, Inc. (817) 491-0088 jack@jjjcommodities.com
(c) 2011 by Powerline Petroleum, LLC. Reproduction or electronical transmission to other companies or individuals in any form is strictly prohibited without written permission of Powerline.
Commodity trading is risky. Powerline assumes no liability for the use of any information contained dicative of future performance. Information conherein. Past financial results are not necessarily intained herein was obtained from sources believed to

Garrett Toay AgTraderTalk.com

(c) 2006 by Powerline Petroleum LLC. Reproduction or electronicallytransmission to other companies or individuals in any form is strictly prohibited Reproduction or electronical transmission to other companies or individuals in any form is strictly prohibited without written permission of Powerline Petroleum.
Commodity trading is risky. Powerline assumes no liability for the use of any information contained herein. Past financial results are not necessarily indicative of future performance. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any examples given are strictly hypothetical an no representation is being made that any person will or is likely to achieve profits or losses similar to those examples.

Compared with Gasoline Think a gallon of gas is expensive? This makes one think, and also puts perspective. Diet Snapple 16 oz $1.29 .... $10.32 lon Lipton Ice Tea 16 oz $1.19 ....... per gallon Gatorade 20 oz $1.59 ... $10.17 per Ocean Spray 16 oz $1.25 ........ $10.00 lon Brake Fluid 12 oz $3.15 ........... per gallon Vick's Nyquil 6 oz $8.35 .. $178.13 per Pepto Bismol 4 oz $3.85 ... $123.20 Whiteout 7 oz $1.39 ...... . $25.42 per gallon Scope 1.5 oz $0.99 $84.48 per gallon

things in per gal..$9.52 gallon per gal$33.60 gallon per gallon

And this is the REAL KICKER... Evian water 9 oz $1.4 9..........$21.19 per gallon?! $21.19 for WATER - and the ers

buydon't even

know the source. (Evian

US EIA Inventory Estimates for week ending Feb. 23rd Crude +1.0 mb Gasoline -1.4 mb Distillate -3.0 mb Runs +0.8% Nat Gas

spelled

-130 bcf API/DOE Avg. Trade Guess, Pre-Report Crude Gasoline +0.5 Distillate +0.5

-1.0 +/US EIA Inventory Estimates for week ending Nov. 17th Crude +0.8 mb Gasoline -0.7 mb Distillate -0.9 mb Summary DOE API Runs +0.8% Crude +2.5 +4.9 Nat Gas -10 bcf Gasoline -0.8 +1.2

Distillate +0.6 +2.9

Runs -0.8% -0.1%

(c) 2004 by Powerline Petroleum LLC. Reproduction or electronical transmission to other companies or individuals in any form is strictly prohibited without written permission of Powerline Petroleum.

Commodity trading is of any information necessarily indicative of

risky. Powerline assumes no liability for the use contained herein. Past financial results are not future performance. Information contained herein

Market Analysis & Strategy

www.powerlinepetroleum.com
specializing in Managing Price Risk Margin Protection Budget Security OTC Product Structures Powerline Group #7 Dunlap Court Savoy, IL, 61874 Darren Dohme Office: 888-605-6051 Office: 217-351-9030 Cell: 217-840-7938 darren@ powerlinepetroleum.com David Chatterton Office: 888-605-6051 Office: 217-351-9030 Cell: 217-898-5320 dave@ powerlinepetroleum.com Bethany Dowling Office: 888-605-6051 Office: 217-351-9030 bethany@ powerlinepetroleum.com Visit us on the Web at:
www.powerlinepetroleum.com

Tuesday, November 29, 2011

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DAILY QUOTE

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Cash Price Summary ULSD NYHarbor Gulf Coast Chicago Group 3 L.A. Nymex +3.00 -2.50 +1.25 -1.00 +6.25 UNL +5.00 -26.25 +2.75 -4.00 +9.00 S&P Dow

Market Overview Last 1271 11642 7932 1421 9221 463 627 1385 236 1073 1421 3197 1.3200 Chg. +18 +128 +27 -6 +83 +22 -2 -9 0.1 +250 -27 +159 -.25 S&P Dow

Market Overview Last 1177 10986 79.65 1374 80.91 4.120 5.215 12.17 2.065 100.88 11088 26.04 1.2025 Chg. -20.75 -180 +917 +161 -84 -.076 +6.50 -4.25 -2.10 -50 -1105 -46 2.75

Dollar Gold Crude Nat Gas Corn Soybeans

Dollar Gold Crude Nat Gas Corn Soybeans Ethanol Cattle Cotton Sugar Propane

2.2936 2.1096 Ethanol

Argo, IL 2.4550

CBOT 2.3770

Ethanol Cattle Cotton Sugar Propane

Propane Conway 1.2300 Belvieu 1.2800