FOR MONDAY: (9/19) Corn and soybeans closed higher on Friday and wheat followed as a steady parade of rain showers in the Midwest raised concerns about harvest delays. The corn and soybeans still finished lower for the week as the market continues to price in the big crops that USDA had forecast on Monday. Short covering was likely in play ahead of the weekend and after the post-report losses. Rain moves across the Midwest the next few days. Both the seven-day outlook and the latest 6- to 10-day outlook favor rain for the Midwest, with the 6- to 10-day also showing above-normal temperatures. We expect short-covering to continue for a few more days and set up more sales and hedges. Cattle looks higher next week and hogs should be higher 1-2 more days and set up a sale.
Volatile cycles next few sessions
FOR FRIDAY: (9/16) Michigan Sentiment may be the key on Friday. Cycles are very volatile the next few sessions and while we would like to get end of the week congestive slop, there are likely to be big news events the next few trading days that increase volatility. With all of these trades now, you have to exit quickly and pick your spots carefully.
Grains lower Friday, recovering Sunday/Monday
FOR FRIDAY: (9/16) We did more cycle work and more likely to see grains lower on Friday and recovering Sunday/Monday and then generally lower much of next week. Given seasonals and harvest pressure, hard to see much of a rally coming the next few weeks. We would continue to favor shorts there. Rain moves across the Midwest this week with severe storms expected today in Nebraska. The seven-day outlook puts rain in the Midwest and the latest 6- to 10-day outlook favors hot weather there then and above-normal chances for rain.
Stocks oversold, need a bounce into Friday
FOR THURSDAY: (9/15) Lots of reports on Thursday but will the trade pay attention to them or continue in triangular congestive patterns before next Wednesday’s FOMC and Bank of Japan meetings? We have to continue to do quick trades but at this point stocks are oversold and need a bounce into Friday.
Targeting 323 for Dec corn on Thursday
FOR THURSDAY: (9/15) Rain this week may slow harvest and one forecast puts moderate rain amounts in the next week from Iowa to Indiana. USDA late on Monday said the national harvest was 5% done, with Illinois’ at 3% and Iowa’s at 1%. Illinois crop sources on Tuesday, said harvest should gain traction this week if fields stay dry. Winter wheat markets closed a few cents higher helped by the lower dollar. Forecasts keep rain in the central Plains this week, which should help the winter wheat that will be planted this fall. USDA on Monday said 6% of the winter wheat was planted as of Sunday, compared with 7% a year ago and the 7% average. Thursdays are often weak for grains and we should easily see 323 for Dec. corn.
Choppy congestion triangle probably starting early
FOR WEDNESDAY: (9/14) We’re probably going to start choppy congestion triangle early as we’re 5 sessions out from the FOMC meeting. This makes trading more precarious since you have to get in and out very quickly, which has been the case anyway lately. At least the last of the Fed cheerleaders and detractors is over with the blackout period but the market is taking profits after Brainard’s dovish comments again did another hockey-puck save to Friday’s huge fall. Skittish behavior will require quick in and out movement to bank profit quickly.
Deflation cycles still at work this week for grains
FOR WEDNESDAY: (9/14) Deflation cycles are still at work this week for grains until at least Thursday with some short-covering possible on Friday. Hogs with new lows are in trouble for a few more days and we don’t think cattle are weak enough to get caught too short and will wait for an oversold condition to buy.
Can buy dips on stocks into Friday
FOR TUESDAY: (9/13) Not much news this week until Thursday and we do have the start of the Fed Governor Blackout so at least we can stop dealing with their absurd games for a week. We just hope these markets don’t move into pre-FOMC paralysis mode but that may be the case. For now we can buy dips on stocks into Friday and be short next week and see what develops. Other than that we may see a lot of chop-city.
Grains lower into at least Thursday
FOR TUESDAY: (9/13) Rain is moving across the Midwest this week with severe storms forecast for Nebraska and Iowa today. Concerns are that such weather could hurt the mature corn and soybeans. The 6- to 10-day outlook (Sept 17-21) favors rain in eastern half of the Midwest and dry conditions for the west. We generally favor lower grains into at least Thursday and aren’t in a rush to be buying until they are very oversold and now we are dealing with harvest pressure. Cattle look lower a few days and in case more happens, we should get short a bit and hogs look higher on Tuesday but then be in trouble.
Metals getting hit by the deflation cycle
FOR MONDAY: (9/12) Finally breaking out of the doldrums as stocks had their biggest move in 7 months and it is all too welcome. We are thinking another flourish to the downside and then recovering the rest of the week for a sucker punch and then lower into FOMC. Crude will be a sale on a bounce for a few days and the dollar may retrace from Monday’s high for a few days. Metals are getting hit by the deflation cycle which goes on another week and we will not buy them even if we get a sucker bounce for a few days after Monday.