FOR WEDNESDAY: (2/1) Still waiting for bounces into Thursday to short grains and so far they are cooperating. Cattle inventory was bearish as expected but does it become another cattle on fade report? Cycles suggest a recovery into Friday for those wanting to fight the new fundamentals. Hogs should top out within a few days and we can be short until at least the 9th if not longer.
TODAY’S COMMENTS: (2/1) Beans were really sickly and didn’t get to 1016 but they didn’t rally enough to negate a new low. Major channel support at 1003 if we get a major breakdown but that price may come in later in Feb. Channel resistance to 1044-5 is the most likely target if the bounce is weak but more is possible but we would need some news, and for the most part bean weather is done unless we get weather problems at harvest—and that is very down the road. Open to selling a rally into Thursday but will be patient before that.
OVERALL: We won’t give up on 1100-1120 but it may not come for a while into March and if beans do not implode more drastically.
WEEKLY CHART: (2/1) 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: Recovering into Thursday; lower Friday.
