FOR WEDNESDAY: (9/21) Grains could hold up one more day and rarely fall strongly on Wednesday. By Thursday we have a number of forces that should finally create a strong harvest reversal. Continue to accumulate shorts. Cattle should hold up 1-2 more days but feeders are struggling and not selling Dec. hogs without a price completion.
Stocks, dollar lower on Tuesday
FOR TUESDAY: (9/20) Not expecting a lot of action on Tuesday but stocks and the dollar point lower one more day and gold higher one more day. At the moment, our bias is thinking that stocks will go higher on Wednesday and Thursday and the dollar will recover and gold will go lower into Thursday. That suggests no hike but maybe a nod for one for sure in December. We also have Bank of Japan on Wednesday and then Draghi on Thursday so more fun and games coming. Continued coilings are starting to drive everyone crazy.
Cattle should hold up a few more days
FOR TUESDAY: (9/20) Storms over the weekend focused on the southern half of the growing region, while rains early in the week return to the upper Midwest before another front moves in from the west. Maps for the next seven days keep the eastern Corn Belt mostly dry. Official 6- to 10 and 8- to 14-day forecasts out yesterday remain wet with a cooling trend in the west though the latest updates this morning are warmer for the period. Grain patterns to the upside would still look more complete if 342 on Dec. corn, 993 on Nov. beans at 416-8 on Dec. wheat came in. If you need to sell or hedge, we will hold out the next few days for those areas. Cattle should hold up a few more days and then congest into the COF report. Waiting for higher hog prices to be selling and that may take a few more days.
Bounce on gold next week, dollar/stocks lower
FOR MONDAY: (9/19) We’re getting close to FOMC-Day and that means more sickly congestions. Cycles are more volatile than usual the next few days and so we might get larger ranges than expected. Trouble with European stocks and Deutsche Bank may start meaning more than another expected decision on Wednesday not to raise US rates. We do see a bounce on gold this week and a fall on the dollar and lower stocks. Sunday is a transition day and we’ll see what develops into Monday.
More short-covering to set up sales
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.