FOR WEDNESDAY: (7/27) S & P up overnight as they are buying APPLE. FOMC days are often filled with surprises, and some cycles suggest as much for Wednesday. Given recent Fed Governor testimony, it’s hard to imagine anything hawkish. We do have Bank of Japan on Friday and another surprise and volatile cycle looming there. We’ll try to play the head fakes and counter-reactions after the announcement but sometimes it’s hard to get your orders in and beat those computer buy programs.
Beans project 990 or 999 before the next sale
FOR WEDNESDAY (7/27) Winter wheat finished down 11 to 14 cents to pull corn down about 2 cents. A big U.S. harvest and talk this week that Russia may have its biggest wheat crop in more than 20 years weighed on wheat. Eyes are on North Dakota, where storms this week could be harmful to the mature spring wheat.
Still, patterns suggested a 3-wave pullback should be bought and we would rather be long wheat. Beans project 990 or 999 before the next sale will come in, and we probably won’t get a decent risk/reward to be selling corn but will keep orders in.
Gold and silver may bottom by Wednesday
FOR TUESDAY: (7/26) Markets are usually pretty dull before FOMC but they do often run up the S & P early and we’re probably open to buying on Tuesday for such an event. Crude should continue lower into the end of the week and that gold and silver may bottom by Wednesday.
Bearish grain cycles this week
FOR TUESDAY (7/26) Weekly progress reports were bearish for corn and beans and we have noted that cycles are bearish this week. We are stuck with very oversold conditions and no risk/reward for selling unless prices can go higher. The wet conditions added to a bearish mood that developed following last week’s 30-day outlook that lacked crop-damaging heat.
Corn finished about unchanged as that market has stabilized after falling earlier this summer as it became apparent the crop would move through pollination unharmed. Hogs have turned the corner on the week so you can buy dips and cattle will be hard to play after going limit up.
Stocks mostly higher next week
FOR MONDAY: (7/25) Mondays in the summer have been doggy and we’re moving toward FOMC on Wednesday. Still, stocks often fall the Monday before FOMC and then are a buy going into a probable dovish announcement. Cycles for Wednesday suggest a surprise announcement, which at this point might be more hawkish than expected but we’ll continue to play patterns and cycles this week, with gold pointing lower into Wednesday and stocks mostly higher next week and the dollar choppy but ultimately higher and crude lower next week.
Higher meat cycles into Wednesday
FOR MONDAY (7/25) Profit-taking finally set in at the close for grains but not after major capitulation. Key support for corn held at 333 and beans went through our lowest target of 976. The latest 6- to 10-day (July 26-30) outlook also lacks extreme heat for the western Midwest and has above-average chances for rain. Data that accompanied this week’s U.S. Drought Monitor said 2% of Iowa’s corn was in a drought area, 4% of Nebraska’s and 31% of Ohio’s. At the moment it seems that the Eastern corn belt will have more problems but then so much more is grown in the West. Cattle on Feed report was better than expected and cycles point higher into Wednesday. Same is true for cold storage and a bounce into Wednesday is likely.
Pre-FOMC congestion ahead
FOR FRIDAY: (7/22) Fridays in the summer have been doggy with long holiday weekends and that often spills into Monday, making the dog days of summer. Pre-FOMC congestion will also now start before next Wednesday’s meeting and they will create muted ranges. Temperatures are running high across the US with a heat dome and let’s hope that doesn’t spillover into more violence.
Lower support targets near for cattle, hogs
FOR FRIDAY (7/22) Thursdays are often lower for grains and even with hot temperatures, the market did not disappoint. This week will be hot with highs of 100 degrees or more in Nebraska and western Iowa and mid-90s elsewhere in the Midwest. But the heat is expected to ease after this weekend with highs dropping into the 80s early next week. In addition, the latest 6- to 10-day (July 25-29) outlook indicates normal seasonal temperatures then. However, it also expects dry weather.
Data that accompanied the U.S. Drought Monitor released on Thursday said 2% of Iowa’s corn was in a drought area, 4% of Nebraska’s and 31% of Ohio’s. Cattle are waiting on the Cattle on Feed report. Time to cover August hog hedges and August live cattle hedges as lower support targets hitting.
Sell the fact on ECB announcement?
FOR THURSDAY: (7/21) Trade waiting on Thursday’s ECB and it can cause volatile spikes all over the place on Thursday. It seems that funds are positioning for ECB already, which means that we will get buy and sell the fact reactions probably on Thursday.
We’re going to stay positioned but ideally may take profits on the Euro before the announcement.
Oversold status for grains
FOR THURSDAY (7/21) We failed to get a grain bounce and we have been patient with July but the failure is really bad news with very oversold conditions. Forecasts showing less intense heat next week sent corn and soybeans lower on Wednesday, with corn setting contract lows in all months and soybeans tumbling near midday after trading higher in the morning. Funds were net sellers in the three crop markets for the second straight day. This week will be hot with highs of 100 degrees or more in Nebraska and western Iowa and mid-90s elsewhere in the Midwest. But the latest forecasts have highs dropping into the 80s on Monday, which should lessen the stress on crops. In addition, the latest 6- to 10-day (July 25-29) outlook indicates normal seasonal temperatures then. However, it also expects dry weather.