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.
Grains setting up for a sale
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.