FOR THURSDAY: (2/1) Grain markets are a bit overbought and we have a number of turns due here for a pullback into at least Monday and possibly a bit longer. Not sure if the bull market in wheat will end, and we expect more problems with Brazil later in the month so not sure we should turn bearish grains. The cattle inventory report was as expected but a bit friendlier in some areas so short-covering likely. Hogs look lower a few days into Monday.
MARCH CHICAGO WHEAT (electronic ok)
TRADING RECOMMENDATION: Wait for morning comments.
TODAY’S COMMENTS: (2/1) Wheat projects a 5th wave to 471 but is rather overbought and not quite willing to chase longs up here. It may congest into Monday before going higher. Daily chart patterns would allow 479-83 if weather continues.
OVERALL: End-of-January crop ratings put out by key states this week showed a sharp decline in winter wheat yield potential across the I-70 corridor from Ohio to Colorado, with Kansas and Oklahoma particularly hard hit by drought and winterkill. The ratings suggest the crop lost another 2.5 bushels per acre of yield potential over the past month. While good spring rains could bail out production, as conditions stand now all wheat production could be down from 2017 with average spring wheat yields.
CYCLES OVERVIEW: Lower into Monday.
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