FOR MONDAY: (2/27) Cycles are complicated going into the end of the month. Patterns suggest a bit more to the downside with bottoming and basing action and then probably a buy setting up by Wednesday. We’re not going to rush and buy July without a secondary low and we have to continue to move stops down and take profits on any remaining grain shorts. We still like hogs to the upside until at least Wednesday and see cattle up this week if you want to bottom pick the neutral report.
MARCH CORN (electronic ok)
TODAY’S COMMENTS: (2/27) Continue to look to take profits. We have moved stops down to breakeven and would continue to peel profits off all shorts and hedges at 359-360. Not willing to start buying until we get firmer bottoming and basing.
WEEKLY CHART: (2/10) Taking out the weekly chart trendline at 351 will be important to allow for something more dramatic to the downside and unlikely to happen with firming exports and hopes for China. At this point 358 on March corn will hold. With 2.3 billion bushels likely leftover Sept. 1 from the huge 2016 crop, it’s hard to forecast a big rally without weather. But July futures appears to be adopting the pattern seen in yields of rising prices, and December is following the path normally seen to post gains into March/April. Fundamental value could get up to $4.20 to $4.55. The bottom end of the range could come in by April but we will need weather problems in June—and they are coming to get up to 4.50.
CYCLES OVERVIEW: Bottoming into Sunday/Monday/Tuesday.