FOR WEDNESDAY: (8/31) Grains didn’t turn up yet but are still in a place for a short-covering rally although at this point it will not mean much. Weather forecasts remain favorable for corn and soybeans, with showers moving across the Midwest this week. Hot conditions arrive next week along with rain across the western portion of the belt. The tropical storm in the Gulf of Mexico is expected to track north along Florida and remain clear of crop areas in the Delta. Cattle finally reversed and should be up a few days now until Friday and hogs continue to hold up and could be up one more day but can be sold on Thursday into Friday in case they come off strongly.
Stocks, gold, crude turning lower
FOR TUESDAY: (8/30) There is a cycle that often causes changes of trend for markets on Tuesday. We think some of the movement on Monday was just retracing Friday’s craziness, and gold and stocks should turn lower again and also crude. Dollar cycles point higher, and that may be the case if we are right on gold. We will be patient.
Grains due to turn up on Tuesday
FOR TUESDAY: (8/30) Grains are due to turn up on Tuesday from overnight lows. Buying is countertrend but something to do if you’re looking to play that way. Hogs still look higher for a few more days and cattle lower at least one more day. Weather forecasts remain favorable for corn and soybeans with showers moving across the Midwest this week. Hot conditions arrive next week along with rain across the western portion of the belt. The tropical storm in the Gulf of Mexico is expected to track north along Florida and remain clear of crop areas in the Delta.
Treacherous week ahead
FOR MONDAY: (8/29) There was really nothing in Yellen’s speech to cause that much volatility but nothing has happened for 2 weeks and the markets unwound and bet on a sooner rate hike. Next week we have volatile action before the employment report. We’re crunching cycles for Sept. and are more bearish stocks and T-notes now and have to be friendly the dollar for a few weeks. Volatility cycles and surprise cycles increase into Thursday so expect a treacherous week.
Grain cycles lower one more day
FOR MONDAY: (8/29) Weather forecasts remain favorable for corn and soybeans with wet conditions this week in the Midwest and hot conditions next week with some rain. The National Hurricane Center says there is a less than 40% chance that a storm building in the Caribbean will reach Louisiana. There had been talk earlier in the week such storm could disrupt corn harvest and impede river traffic there. Grain cycles look lower one more day but should short-cover into Friday and we don’t know on what news.
Do we have to jump on rallies into Friday for new hedging and cash sales? Probably. Might get away with waiting on the USDA report but we will know more next week. Cattle are in big trouble now and still could be lower 1-2 more days before a bounce. Seasonals are against feeders in Sept. but turn up for hogs and we are out of hog hedges and spec. sales.
Metals unraveling
FOR FRIDAY: (8/26) We often get point/countertpoint reactions when Yellen unleashes. Sometimes you get a quick reaction and then end of the week profit-taking sets in. Usually it’s difficult to outsmart computer ALGOS but we can take positions at key place in patterns. We think stocks have finally issued a sell signal for the 4th wave and doubt there’s more than 2140-48 for the S & P. Metals are unraveling and are still vulnerable into Monday so it may be much worse than expected. Dollar is so subject to surprises and has become a bit crazy but we’ll hold out with a big stop and see if the downward pattern unfolds.
Weather, crop tour pressure grains
FOR FRIDAY: (8/26) Soybeans headed south in a big way on Thursday after crop scouts inspecting Midwest fields found big pod counts in Illinois that led to speculation actual production may exceed USDA’s current forecast. Corn and wheat futures also closed lower, with corn moving down with soybeans. Losses in corn were kept in check by today’s big new-crop export sales and by the tour estimating Illinois yields under USDA latest 200 bpa forecast.
Weather forecasts remain favorable for corn and soybeans with wet conditions this week in the Midwest. Next week is expected to be hot and wet. Attention is on a possible hurricane developing the U.S. Gulf that could move into the Mississippi River delta and disrupt corn harvest there. Forecasters should have a better idea of the storm’s development and path in the next day or so. Need something like that to create another move up into early September to allow more hedging and cash selling before harvest pressure hits.
Time to take profits on short hogs. Cattle need a 2-3 day bounce for us to have any risk/reward to be selling.
Stocks finally issue a sell signal
FOR THURSDAY: (8/25) There is a trigger cycle for the fear cycle of the week on Thursday but will it get delayed until Friday because of Janet? We think stocks have finally issued a sell signal for the 4th wave and doubt there’s more than 2140 for the S & P. Metals are unraveling and are still vulnerable into Friday so it may be much worse than expected. Dollar is so subject to surprises and has become a bit crazy but patterns and cycles point lower into Friday.
Hogs still weak a few more days, cattle an aggressive sale
FOR THURSDAY: (8/25) Wire reports say the scouts found healthy Illinois corn and soybean crops with yields and pod counts above last year. Crop tour findings will be scrutinized to determine if USDA’s big crop and yields are doable. Stress from dry conditions hurt corn in Indiana and Ohio. Wire reports say Illinois surveys found a good, but not great, crop. Weather forecasts remain favorable for corn and soybeans with cool, wet conditions this week in the Midwest, but warm and wet conditions next week. Severe storms move through southern Iowa, northern Missouri and western Illinois today before dissipating by Thursday. However, rain lingers in the Midwest.
We are ready to take profits on shorts but thinking that markets may be down even through Friday–and if there is a buy, it will be Monday. Hogs still look weak a few more days and cattle are an aggressive sale as they are rather oversold but still probably down at least 1 more day.
Dollar lower into Friday
FOR WEDNESDAY: (8/24) There is a key 29-year cycle that is rare peaking overnight. It has often been correlated with major world catastrophes and last time we saw it in 1986, it was connected to Chernobyl but there was a delayed reaction. For now the trade is focusing on Janet and more free money. We crunched cycles carefully and T-notes seem higher into Friday and suggest Janet will be dovish. The dollar seems clearly lower into Friday, and that correlates but will the trade be that happy to get free money for the stocks so close to 2200 on the S & P. We’re now thinking metals are lower into Monday.