Cycles still suggest that grains should top out the first few days of the week and turn lower into Friday and probably early next week. Cattle on Feed report was negative and there probably is a little room for it to fall yet but could be a “cattle on fade” situation, as we think they will buy dips for the rest of the week. Hogs should hold up until at least Wednesday.
MARCH SOYBEANS (electronic ok)
TRADING RECOMMENDATION: Wait for morning comments.
TODAY’S COMMENTS: (1/30) Three minor waves up project 1055 with key resistance at 1060. A full 62% retracement higher would go to 1165.75. We may have to consider sales by Monday night but in case weather hits, we’ll give the market a chance.
OVERALL: We can’t rule out higher prices later to 1107 or 1120 but it will require new problems. We can’t always count on Feb. sales anymore like past seasonal patterns so we have to consider hedging and selling from value.
WEEKLY CHART: (1/30) Three waves up projects 1120 but wondering if it has a chance now without new weather or whether it will happen as early as early March. Major weekly chart resistance is at 1157 but it would take another weather crisis to get it higher. 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. The market has gotten ahead of itself with funds jumping on flooding in SA but somehow Mother Nature finds a way to rebalance. Cycles are weak in February. Beans will pull back to at least 1000-992 into late February.
CYCLES OVERVIEW: Generally higher into Jan. 27-30; lower into Feb. 1.
