FOR FRIDAY: (10/7) Farmers in the Midwest will dodge rain the next two days while harvesting corn and soybean, but should have drier weather after that. The latest 6- to 10-day outlook (Oct. 11-15) is for a warm and drier pattern for the region. Corn came off a bit more than we expected but we have higher prices on Friday. Looking to sell beans at 989 but it may take until Sunday to get up there. Cattle cycles suggest lower early and recovering on Friday.
Cycles look weak Thursday and Friday
FOR THURSDAY: (10/6) Trade waiting on Friday’s employment report. Cycles look weak for Thursday and Friday and we expect stocks to sell off. Other markets may be more congestive waiting for the news. Still, we wonder if the trade will ignore a weak number and rally the market and indications are that we will get a weak number if ADP and ISM service meant anything today.
Willing to buy key support on wheat
FOR THURSDAY: (10/6) Not sure we learned too much on Wednesday except people are willing to buy key support on wheat near 390 and there is value there. Otherwise it was a wash day of non-significance. Rain will plague the Midwest corn and soybean harvests this week, with severe storms expected on Thursday from Kansas to Iowa, but the 6- to 10-day outlook favors a warm and drier pattern for the region. Traffic on the Mississippi River should return to normal as the Army Corps of Engineers on Wednesday reopened the only lock that closed due to the high water that spilled out of Iowa. Wheat was sharply higher on Moroccan purchases.
Wednesday best day for a stock market bounce
FOR WEDNESDAY: (10/5) Lots of tensions building as in Russian/US relations over Syria and Deutsche Bank insolvency and now the EU wants to start letting go of QE. Guccifer released more damning Clinton Foundation data but you will have to dig to find it in a media that is owned and operated by the oligarchy. S & P already at lower end of the trading range increases the chances for much lower prices into Friday/Sunday. Wednesday seems like the best day for a stock market bounce. Unclear what kind of fun surprises are coming but fear and tensions cycles do peak over the weekend so expect a climax around Syria and other tensions.
Grains and cattle rally to continue one more day
FOR WEDNESDAY: (10/5) Commodity Weather Group reports that rain continues to plague the Midwest harvest with forecasts putting severe storms in Kansas and Nebraska today and flash flood warnings from Oklahoma to Minnesota. Rain lingers on Wednesday with more storms in Kansas on Thursday and flash flood warnings from Kansas to Iowa. So far there have been only minor disruptions to Mississippi River traffic. The Army Corps of Engineers on Tuesday said the one Mississippi River lock that is closed should reopen tomorrow.
Inclined to think that the rally for grains and cattle will continue one more day. Hard to do countertrend buys on the grains and have to bank profits on cattle longs as things disappear quickly in that market.
Sloppy week ahead
FOR TUESDAY: (10/4) China is gone all week for Golden Week and while Germany will come back and trade will wander back from the Jewish New Year, we still may have a sloppy week. We’re very open to a crisis meltdown toward the end of the week but we never want to use the word crash. The oligarchs are good at keeping their fingers in the dike and a recent article noted that they have enough cash to keep the game and QE going another 4 years! By next Sunday we will favor a seasonal buy on stocks and at the moment they’re not giving us much of a pullback to play.
More rain in Iowa this week may support grains
FOR TUESDAY: (10/4) Monday’s violent rally was a bit of a shocker. We had cycles up for a few days and funds sometimes buy Oct. 1st for a week or so before the next USDA report but this was a bit much. Some announcement of the USDA not allowing flooded grain onto the market was a bit of a scare. Harvest in the Midwest was slowed by rain this past weekend, but should gain some traction under clear skies. More rain arrives on Tuesday and Wednesday, plus the weekly and 6-to 10-day forecasts favor rain for the western Midwest.
Stock cycles positive for Monday
FOR MONDAY: (10/3) Seemingly confirming the rumor, Agence France Press reports that Deutsche Bank is nearing a $5.4 billion settlement with the US Justice Department. This has catalyzed another leg higher in Deutsche Bank stock and lifted the whole market as it would appear that unconfirmed sources have ‘fixed’ the world’s most systemically dangerous bank (despite the fact that short-dated counterparty risk is soaring). Giving DB some breathing room is the fact that Monday is a banking holiday in Germany and that will leave traders in limbo.
The first of the month is often an up day for the stock market and cycles are positive so the market likely to accelerate and throw the bears under the bus. Given how rumors and problems so often erupt with these matters and given that cycles are messy next week for financials, we doubt we will get a clear-cut resolution. Moreover, we then have to deal with choppy trading ahead of the Oct. 7 employment. No rest for the wicked. Hard to make recommendations here on Friday and the first day of the new month tends to be a big-range volatile day anyway so have to see what unfolds.
Cattle look higher on Monday
FOR MONDAY: (10/3) Corn closed higher for the day after USDA reported smaller-than-expected Sept. 1 stocks of 1.74 billion bushels. The change in the stocks and other factors were enough to push December past resistance at the 20- ($3.34) and 50-day ($3.34) moving averages and higher for the week.
Going into October, attention will focus on the weather and harvest progress. Iowa should be dry the next few days to allow harvesting there, while showers linger in Illinois, Indiana and Ohio. The 6- to 10-day outlook (Oct. 5-9) favors more rain for Iowa. We are open for grains to recover a day but beans are a safer sell and corn could hit 340.50 and wheat 414 first. Hog and Pig report was bearish but how much more can it go before we get a bounce? Cattle look higher on Monday from limit down and key 119 level reached for Dec feeders so what to do but be patient.
Deutsche Bank climax by Oct. 9
FOR FRIDAY: (9/30) Deutsche Bank continues on the tilt-a-whirl, suggesting a Lehman moment, and of course they’re spouting rhetoric of how all is OK in the same kind of denial that Lehman spouted days before they collapsed. Some investors are starting a minor run but ultimately the government will come in and save DB. Starting to think climax by Oct. 9 so it continues to seem safer to be short overnight for a world and market on edge. Still, we won’t discount the power of the oligarchs to keep their world going and richer so those expecting the end of the world with DB or a Trump win will be disappointed. One of my favorite movies by Luis Bunel, The Discreet Charm of the Bourgeoisie, is a reminder of that: whatever the ups and downs and craziness of this group, they continue to grow and prosper and rule.