FOR FRIDAY: (5/19) Cycle lows for grains dominate the next few days and not sure the market can turn up until after May 25. We would continue to favor shorts until then. Short-covering on cattle may continue one more day but the market will probably stay under pressure through next week, and overall seasonals are lower into June.
JULY CHICAGO WHEAT (electronic ok)
TODAY’S COMMENTS: (5/19) Wheat held up well. We would rather sell closer to 439-441 but may not get there in this erratic market. At best, this market may hold 420 and retest 432. Five waves down back to trading to 412. Will look for new weather forecasts in the morning for directions.
FUNDAMENTALS: Wheat faced headwinds from the lower soybeans and ample world supplies, even as more storms threatened this year’s harvest. Severe storms and rain could be a problem today and tomorrow for winter wheat in the Plains. HRW wheat in Kansas needs to recover the late April snowstorm and recent rain, while Illinois SRW wheat also needs a break from rain and flooding. Weekly export sales were up from a week ago, with new-crop business on the high side of trade forecasts.
OVERALL: Seasonal pressure is always on winter wheat into late May and it can sometimes extend into mid-June. Three waves down on the weekly continuation chart project 3.99 and the USDA has given 3.85 as the lower end for where prices may go and they figure the market will not get above 465. Hard for us to see wheat getting above 438-440 again and given the downside potential to 399 or 385 on July wheat, we have to continue to sell rallies. First place July wheat will fall is 418 and then 410-2.
CYCLES OVERVIEW: May 18-19 (mixed); lower into May 24.
