FOR THURSDAY: (5/11) USDA report is out of the way and now it is matter if a flooding rain front pushing across the Midwest spooks traders. Given warm and dry in the 10 days, this last storm may not mean much. Can wheat really recover much given harvest pressure? While 9% of the crop is lost, there is still a lot of world wheat out there. Cattle cycles are weaker a few more days along with hogs but cattle is a bit overdone now.
JULY CORN (electronic ok) start here.
SWING TRADING RECOMMENDATION: Hold July corn shorts from 368 and 369 with a 377.65 stop. Exit partials at 370.50.
TODAY’S COMMENTS: (5/11) Market should pull back to 373.75 or 370 the next few days but a push up to 377.50 wouldn’t be shocking given the reaction and the failure to fall apart. Is this move a game changer or are we just completing the sickly range between 380-360. Probably the later. Still think we’ll get a 2-day pullback but will exit ½ in case.
FUNDAMENTALS: Corn futures closed up about 7 cents after USDA cut this year’s ending stocks to 2.295 billion and next year’s to 2.11 billion. Next year’s reduction was the result of an expected smaller harvest this fall due to fewer acres and smaller yield. Weather also may have provided support as maps show more rain this week in the Midwest including severe storms and flash flooding. However, the 6-to 10-day outlook appears hot and dry for much of Midwest.
CYCLES OVERVIEW: May 11-12 low.
