(2/23) Our sources say that the Ag Outlook report will be released at 8 am EST but may not be posted completely to their website until 3 pm EST. Over the years, the market has usually reacted to this report early in the morning. We haven’t taken a heavy position with anything, as this report can be like the quarterly reports and can create huge moves. Farm Futures expects corn acreage at 90.49 million vs 2016’s 94 million; soybeans at 90.52 million vs 83.4 million and wheat at 45.68 million vs 50.2 million. Based on cycles, we expect a bearish reaction but the impact may be more on new crop which we are not even covering yet. We’re getting close to end of the month seasonal lows and we should be out of short March grains by early Monday and will roll to the May and July contracts. Hogs broke hard but are close to a key cycle low and cattle look lower on Thursday.
MARCH SOYBEANS (electronic ok)
TRADING RECOMMENDATION: Wait for morning update.
TODAY’S COMMENTS: (2/23) Too late to sell now although we see this market lower on Thursday to 1014. We didn’t even get close enough to 1034 to get something short. Once 1019 comes in, it will be hard to chase.
OVERALL Breakdown under 1038 opens up Pandora’s Box before 5 waves down projects 1014.
WEEKLY CHART: (2/2) Selling 90% of old crop in the 1100-1120 region makes sense given a huge acreage coming. While we see problems in June with this market, any trade problems with China could lead to a plunge to 920. We wonder now if beans will go back to 1000-992 into late Feb. given weak cycles.
CYCLES OVERVIEW: Generally lower into Feb. 23; recovering Feb. 26.
