FOR MONDAY: (9/12) Grains continued to short-cover before USDA report and are setting up a sale, as even a surprise report would lead to sell the overbought condition going into Sept. hedges. Continue to use strength to get rid of cash and hedge, as this market could quickly fall apart and now is getting a bit overbought. Cattle continue their volatile ways but think that Friday’s rally was a fake-out.
Stocks a clear sale on rallies
FOR FRIDAY: (9/9) Not a lot of reports scheduled for Friday. Big event is rollover to Dec. currencies and stock indices and that always creates some juggling and profit-taking. Metals and currencies continue to trade rather erratically. Stocks continue to be a clear sale on rallies for at least one more day.
Continue to use strength to get rid of cash and hedge
FOR FRIDAY (9/9) Grains continued to short-cover before USDA report and are setting up a sale, as even a surprise report would lead to sell the overbought condition going into Sept. hedges. Continue to use strength to get rid of cash and hedge, as this market could quickly fall apart and now is getting a bit oversold. Hogs are holding up well and look up Monday so we’ll exit on Friday and cattle still look to be in trouble.
Tread carefully on ECB day
FOR THURSDAY: (9/8) ECB D-Day. It’s not expected to be a big deal but somehow Draghi says something in inflammatory and the computer ALGOS go into overdrive more than employment and FOMC days. If you’re not positioned properly, you can get killed. We will trade lightly from key numbers and pattern completions and wait for the dust to settle and logic rarely works after the head fakes and triple-head fake reversals.
More pressure for grains
FOR THURSDAY (9/8) Storms are moving across the Midwest this week with flash flood warnings posted for parts of Iowa and Illinois today and for Kansas, Missouri and Illinois on Thursday and Friday. The 6- to 10-day outlook (Sept 12-16) favors normal to above-normal rains for much of the Midwest with below-normal temperatures for western two-thirds of the country. As we move into Friday, we do expect more pressure to the downside unless trade is afraid of too much rain in the Midwest, and that seems unlikely. Meats had a strong recovery day as we expected. We do expect them to move lower on Thursday and Friday as deflationary cycle is due to hit.
More choppiness ahead
FOR WEDNESDAY: (9/7) ISM services was the worst since 2010 and computer ALGOS dumped the dollar and took pressure off of the hawks. Expect some Fed Governors to set it right again so as to continue to chop us to death. Breakout on gold is very real but have to buy pullbacks and then gamble with ECB. We may better be able to do that with the mini and may have to switch back there.
Grains still under pressure
FOR WEDNESDAY (9/7) Storms moved through Iowa and eastern Nebraska later on Tuesday, with local forecasts in Iowa calling for 2 to 3 inches of rain overnight. The 6- to 10-day outlook (Sept 11-15) favors normal to above-normal rains for the Midwest with below-normal temperatures for Iowa and normal to above-normal heat for Illinois and east. Progress reports were bearish and market now a bit overbought and at key pattern completions. As we move into Friday, we do expect more pressure to the downside and it probably will start Wednesday unless trade is afraid of too much rain in the Midwest, and that seems unlikely.
Not seeing too many set-ups unless key numbers come in on Sunday
FOR MONDAY: (9/5) Three-day weekends are hard to trade. We have a bias with certain patterns and cycles going into the weekend but always are concerned about bizarre news over these long weekends. Not seeing too many set-ups unless key numbers come in on Sunday for buys in notes. We will put out a Monday morning report only if the markets are overactive and updates are needed. Our next report will be published on Monday afternoon for markets for Monday night and Tuesday. Have a great and safe holiday weekend!
Grains could congest into Sept. 12 crop report
FOR TUESDAY (9/6) Grains continue their rebounds and may hold up into Monday night. Weather forecasts remain favorable for corn and soybeans with drier weather in the Midwest the next few days. Hot, wet conditions are forecast there next week. Tropical storm Hermine is moving across northern Florida and is expected to track north along the Eastern Seaboard and bring heavy rain to the Carolinas. Ample global wheat supplies have kept pressure on prices. Forecasts keep rain in the central Plains next week, which should help the winter wheat that will be planted this fall.
Trade could congest into the Sept 12 crop report but so often final harvest pressure hits it thereafter. We are bearish most of next week. Hogs may hold up if Carolina rains inhibit marketings and that state and Iowa contain 43.1% of the United States hog inventory. Cattle needs to bounce a few days and hit key support.
Thin, pre-holiday conditions ahead
FOR FRIDAY: (9/2) Another employment report day with no one there as the everyone heads out of town or will do so by 9:30 am Central time. The problem with these Friday reports is that you get the news, the head-fake and then the weekend profit-taking and it’s almost not worth playing unless you can outbid computer algos on a mission. We’ll do our best to play but we’ll continue to focus on the trends that we see developing next week rather than reactions happening on news and surprises.