FOR WEDNESDAY: (7/12) The later we get each day into July, the more the market seems vulnerable. USDA report days are often turning points for the month. While we can see the market holding up as late as Friday, we could get volatile corrections here which would be 4th-wave before final highs. We foresee a cluster of turning points into Sunday/Monday, which means that even if the hot weather is there, the trade may start selling the fact. Trade waiting on USDA report for Wednesday but may not mean much if weather shifts. Usually by the 2nd week of July you have to be short corn. We watch patterns to keep us out of trouble and corn needs at least one more high to 424-7 on Dec. and beans to 1092-6. Wheat might get dragged to 590-600 and has the worst fundamentals. Cattle not happy with higher feed prices for now.
DEC. CORN (electronic ok)
SWING TRADING RECOMMENDATION: Hold Dec. corn longs from 410.25 and 409.50 with a 399.25 stop. Exit partials at 416. Exit more at 422.
TODAY’S COMMENTS: (7/12) We bought corn on dips, as we expect that another push up is coming. The market did fall a bit more than we wanted, having a 10-cent range overnight, but the 407 gap needed to be filled and we gave up on it too quickly. While the daily chart could get a 4th wave as low as 401, the chances for 425-7 continue to look good. We have to beware of a 13-15 cent pullback coming and it should stay above 401. Under 400 and this market is in trouble.
OVERALL: We could see Dec. corn hit 424-7 if wheat keeps going and it would be a gift but now it’s early July and the crop will pollinate soon and the forecast is hot and dry. Luckily we had banked great profits on July corn shorts last Tuesday. Given the size of the crop, hard to imagine 450. Corn will have to take out 387 to issue a sell signal.
WEEKLY CHARTS: Continuation charts had pointed to 405 earlier in the year and that is still 35 cents higher which would take Dec. corn up to 424. We have to hedge with these prices but have to watch the crazy funds with eyes behind our head. Continue to use strength and buy Dec. puts to withstand the volatility.
CYCLES OVERVIEW: Volatile Wednesday; lower Thursday; higher Friday; recovering July 17.
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