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.
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.
FOR WEDNESDAY: (7/20) Trade waiting on Thursday’s ECB and it can cause volatile spikes all over the place then but may be very quiet again on Wednesday.
We’re going to stay positioned but ideally may take profits on the Euro before the announcement.
FOR WEDNESDAY: (7/20) We warned you how these bullish forecasts can quickly change. The NWS’s latest weekly and 6- to 10-day (July 24-28) outlooks indicate this week’s hot weather of 90 and 100-degree highs will be brief, likely lasting through Friday, with next week’s highs expected in the 80s.
Also, rain last week and through the weekend put crops in good position to weather this week’s heat. Patterns suggest very oversold conditions for Dec wheat at 438 and Nov. beans at 1021 and Dec. corn to max. 342 so that some short-covering may develop and maybe the reality of the heat in Chicago will get those traders short-covering. Meats are moving toward congestion ahead of monthly reports.
FOR TUESDAY: (7/19) Failed Turkey coup rebound was easy to predict but summer trading was so muted not sure we learned much. Usually by Tuesdays the trade is back from long holidays and ready to re-position so let’s see if volume picks up and confirms weaker metals this week and weaker crude over the next week and hoping for a secondary low on stocks to buy.
FOR TUESDAY: (7/19) I suspect that markets are oversold enough that we’ll get a bounce if we can get in from lower levels at pattern completions. Corn, soybean and wheat closed higher on Monday as traders await the severity and duration of this week’s Midwest heat wave.
For the Midwest, forecasts put 100-degree highs from the Mississippi River and west and 90-plus east of there. The 6- to 10-day outlook (July 23-27) has above-normal temperatures in the Midwest and Plains then, plus dry conditions for the western Midwest. Reports from the field say Midwest corn made it through pollination in good shape and widespread weekend rain should help the crops make it through this week’s hot weather. Winter wheat moved higher with corn and soybeans despite harvesters reporting good yields as the winter wheat harvest moves into Nebraska and South Dakota. Protein content has slipped with readings of about 10% common versus the normal 12%.
FOR MONDAY: (7/18) Cycles are a bit more optimistic for Monday for a bounce for stocks but still think some downward congestive action could dominate for a few days.
With the background noise changing with French terrorism, we can give the dollar a better chance to reach higher but we still want to sell gold on Monday if we can. Crude still looks under pressure next week.
FOR MONDAY: (7/18) Rains last week focused south of I-80. That’s expected to change into early next week, according to maps for the next seven days, as milder temperatures begin to give way to heat from the Southwest. Official 6- to 10 and 8- to 14-day forecasts out yesterday show the warmer and drier pattern extending into the last week of the month, though the latest updates this morning dial back the extreme conditions some. Lately the more bearish forecasts tend to manifest over the weekend and cycles suggest as much going into Monday.
Still, we’re open one more recovery but at the moment we think the market will be lower the next few sessions. Gaps on Sunday night are very difficult to trade.
FOR FRIDAY: (7/15) A serious truck bomb in France could change action for Friday and we have to scramble out of short gold and long stocks until we are sure how markets react. This week has been too news driven with too many surprises for holding any trade very long and we will continue to stay on top of it as best we can.
Our heart goes out to that country again at this very troubled time.
FOR FRIDAY: (7/15) We warned you how fickle these forecasts are how they can quickly turn. Soybeans made a sharp turn lower at midday and closed sharply lower as new forecasts apparently favor rain next week for the Midwest crop and indicated the heat wave then may not last long.
Previous hot, dry forecasts for the Midwest helped drive corn and soybeans higher this week with some help from Tuesday’s USDA report that increased exports for corn and soybeans and lowered Brazil’s corn crop.
