FOR FRIDAY: (8/19) We went into the week with a bias for a retracement into the end of the week and we could easily get profit taking. Still, cycles may be inverting and if the grains hold up into Sunday, they may start retracing early next week. Cattle will do short-covering before Cattle on Feed, and hogs have no risk/reward until we get a 3-wave rally that may not come in.
Selling dollars, buying metals
FOR THURSDAY: (8/18) Markets are tricky with schizophrenic FOMC governors playing games and jerking markets around. FOMC minutes seemed more hawkish than expected but the market took it the other way. We’re hoping jerky markets stop but for now they’re challenging. Getting to a point where we can be selling dollars and buying metals over the next few days; stocks continue to act toppy.
Grain cycles turn lower Thursday/Friday
FOR THURSDAY: (8/18) Severe storms may develop in South Dakota and Minnesota on Thursday and then in Nebraska and Iowa on Friday. Midwest weather turns cooler next week with rain likely. Rain lingers in Louisiana then but the heavier amounts move north. Recent rain and flooding in that state slowed exports as it slowed vessel loading.
Grain cycles turn lower Thursday and Friday and profit-taking may set in markets are near pattern completions at 1027 on Nov. beans and 342 on Dec. corn. Cattle still look lower into early Friday but COF report should create some short-covering. Hogs may also do short-covering into their reports.
Gold lower for a few days
FOR WEDNESDAY: (8/17) Stocks acting toppy with Bullard’s surprise hawk attack and could be any secondary highs on Wednesday for stocks may need to be sold as market looks like it’s running out of steam, and we had it lower next week. Dollar may hold up a few days on Bullard and push gold down a bit for a few days. Oil is running out of steam but one more new high and a pullback would set up a buy.
Pullback for grains
FOR WEDNESDAY: (8/17) Weather turns cooler next week in the Midwest with rain likely. Rain in Louisiana appears to be abating, which may ease flooding there and allow boats to be loaded with grain. Cash corn bids at the Gulf dropped about a dime late last week as rain and flooding disrupted export loadings. A lower dollar provided some under lying support to Tuesday’s crops. China bought 4.37 million bushels of 2016/2017 soybeans.
Cycles suggest that grains could pull back a few days here and we’re not in a rush to chase longs up here and have suggested continued profit-taking on multiples. Cattle look like they will stay in trouble and hogs look lower on Wednesday and offer no new risk/reward for shorts.
Grain cycles still friendly on Tuesday
FOR TUESDAY: (8/16) In the weather, current forecasts favor rain and mild temperatures this week. The seven-day forecast keeps rain in Indiana and Ohio, but the heaviest amounts are north and over the Great Lakes. The 6- to 10-day outlook (Aug. 20-24) has cool, wet conditions for the western half of the Midwest. Normal to above-normal temperatures are favored for Indiana and Ohio.
Motivation for the rally appeared tied to a batch of daily export sales since August 1 and a monthly crush report that showed tight supplies of soybean oil. Soybean oil jumped more than 3% in Monday’s trading after the National Oilseed Processors Association said stocks in July were 1.743 billion lbs, much less than the 2.0 billion the trade expected and the 1.985 billion a year ago. Cycles are still friendly on Tuesday but a pullback mid-week is likely. One would think some profit taking may set in after the strong rally since Friday.
Stocks’ cycles still look higher on Tuesday and Wednesday
Stocks’ cycles still look higher on Tuesday and Wednesday and this market will keep frustrating bears. Gold seems lower into Wednesday and oil is due for a pullback but the trend is up now. Dollar should be higher for a few more days but lately we’ve been getting a lot of surprises with currencies so be cautious.
Four major cycles hitting over the weekend
FOR MONDAY: (8/15) Four major cycles hitting over the weekend may create more volatility and news for Sunday/Monday than usual. Favoring higher dollars into Wednesday and lower metals and higher stocks and lower oil. X-factor is whether Russia/Ukraine tensions increase. For now, enjoy the summer weekend. Volatility cycles are peaking now but may not decrease until after Wednesday.
Grain cycles more bearish Sunday than Monday
FOR MONDAY: (8/15) In typical fashion the trade took profits on the bearish report and the worst may be over now. USDA expects a record 15.15 billion bushel corn crop, a 4.06 billion soybean crop and 2.32 billion bushels of wheat. The corn and soybean numbers topped all forecasts in some pre-market surveys and sent corn futures to contract lows before they recovered. National Weather Service notes current forecasts favor rain and mild temperatures through next week. Heavy rain is expected in the Ohio River Valley the next few days and has the National Weather Service posting flash flood warnings for southern Indiana and Ohio.
The 6- to 10-day outlook (Aug.16-19) has normal to above-normal temperatures for the Midwest and northern Plains with above-normal chances for rain for much of the Midwest. Usually grains recover in August and cycles are a bit more bearish on Sunday than Monday, that may give us a chance to get in.
Stocks may hold up another week
FOR FRIDAY: (8/12) We did extra research, as cycles and patterns are getting more bizarre. We decided that stocks may hold up another week unless we get a major break below 2164 quickly on Friday. Dollar may retrace on Friday but looks higher next week and gold also needs to go to 1330 next week. Oil is bizarre for the moment and can be left alone.