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.
Negative report could create oversold conditions
FOR FRIDAY: (8/12) Forecasts keep rain in parts of the Midwest the next seven days with the largest amounts in the dry areas of Indiana and Ohio. Severe storms move through Iowa today and rain could linger in the Midwest on Friday. The 6- to 10-day outlook (Aug.16-19) has hot weather in the northern Midwest and northern Plains then with below-normal chances for rain for much of the Midwest.
A strong rally in crude is supportive for the complex but it may give back gains next week. Grains will most likely have more of a negative reaction on Friday and that will give us oversold conditions to buy for the rest of the month by early next week.
For Friday’s USDA report, private firms expect expects corn crop of about 14.59 billion bushels at 168.6 bpa and a soybean crop of 3.865 billion at 46.65 bpa. USDA currently has corn at 14.54 billion bushels and 168 bpa, and soybeans at 3.88 billion at 46.7 bpa.
Cycles likely to trigger deeper falls Thursday
FOR THURSDAY: (8/11) The dollar’s sharp fall on Tuesday night created a bit of a panic for us and we had one of the worst trading days of the year as we didn’t see it coming. Regrouping here. Stocks continue to act toppy. Cycles are more likely to trigger deeper falls in many markets on Thursday and stocks may finally issue a deeper sell signal.
Cycles volatile for Friday’s report
FOR THURSDAY: (8/11) Forecasts keep rain in parts of the Midwest the next seven days, with the largest amounts in the dry areas of Indiana and Ohio. Severe storms move through parts of the eastern Dakotas today before dissipating. The 6- to 10-day outlook (Aug.15-18) has hot weather in the northern Midwest and northern Plains then, with below-normal chances for rain for much of the Midwest.
For Friday’s USDA report, private firms expect expects corn crop of about 14.59 billion bushels at 168.6 bpa and a soybean crop of 3.865 billion at 46.65 bpa. USDA currently has corn at 14.54 billion bushels and 168 bpa, and soybeans at 3.88 billion at 46.7 bpa.
Not much to do on Thursday. Cycles for Friday seem volatile so will stay open to see lower pattern completed with a very bearish report.