FOR THURSDAY: (7/14) Quick 2-day pullback on S & P should be over quickly here and the push higher should continue into August 1 so the party isn’t over. We’re still waiting for retracements from Tuesday’s wild action and then can get positions in play for next week with most swings suggesting trending action between July 18-27 next.
We’re wanting to short gold and silver on retracements.
FOR THURSDAY: (7/14) Forecasts put 90 to 100 degree temperatures in key soybean areas next week, which could hurt crop development. Corn closed higher, although gains were pared late, on lingering support from Tuesday when USDA raised this year’s exports, partly because of an expected smaller crop in Brazil. Soft red winter wheat finished about 2 cents higher and hard red winter near unchanged. USDA confirmed on Tuesday there will be plenty of wheat in the world, with the United States, Argentina, Australia, Canada, Russia, and Ukraine all expected to harvest more.
Still, much of corn pollination should be done by the time the heat arrives but concerns still remain that a stretch of above-normal heat with dry conditions could still affect yields. Cycles aren’t giving us too many clues. We have had a bias toward a bearish reaction by Monday but those forecasts flip so easily it’s hard to gamble on unless you get in at good levels with big pockets.
FOR WEDNESDAY: (7/13) The potential impact of the new PM in the UK caught us napping on Tuesday. Yes, now suddenly the UK is fixed and there are no potential problems for Europe, or so the market reacted today. Sometimes these news events are followed by the trend as usual, and that may again be the case with the recovery in the dollar late.
We’ll give our original cycles the benefit of the doubt for a few days and see what happens but T-notes issued a breakdown signal and so did gold so the other markets might follow so be cautious.
FOR WEDNESDAY: (7/13) Not sure what we learned from the reaction to Tuesdays reports other than the funds will buy overbought conditions if they think there is any hint of prices going up. We’re open to higher prices into Friday and if the weather changes it looks like the market could dump early next week. If not, beans might get carried along the path of least resistance.
Cattle are still a sale on bounces and hogs may need to be higher for 1-2 days. Soybeans were helped by new forecasts showing hot weather moving into the Midwest.
FOR TUESDAY: (7/12) The 6- to 10-day forecast (July 16-20) shows hot, but seasonal moisture for the Midwest. Soybeans last week rated 71% good/excellent. On Tuesday, the USDA releases the monthly WASDE report with the trade largely expecting an increase in 2016/2017 corn ending stocks.
Tuesday’s WASDE report is expected to raise 2016/2017 soybean ending stocks from June’s 260 million. While rain has slowed the winter wheat harvest, custom harvesters continue to report big yields. There has been some slippage in test weights because of the rain, they said. The harvest moves into Nebraska and South Dakota next week.
Excess rain has hurt the crop in France, Europe’s key producer. Harvest starts there this month, with forecasts showing more rain. Last week, the EU estimated the wheat harvest at 144.6 million metric tons, down from the previous estimate of 145.1 million.
FOR TUESDAY: (7/12) Cycles may turn more volatile on Tuesday with Tuesday/Wednesday having the best chance for lower stocks–and if we don’t get anything or much, we’ll know how strong this market is and we shouldn’t fight the trend or the primary 6-week cycle higher.
Treasury auction not going well at the moment and that may keep us from nibbling on longs. We do like long gold the rest of the week and short crude and long dollars the rest of the week.
FOR MONDAY: (7/11) Oversold conditions on Friday led to short-covering and weather reports change every 12 hours. For now, the trade wanted to take profits but cycle seem lower Sunday-Tuesday for grains unless we get some new weather forecasts turning hotter and drier. Meats still look under pressure early next week but may do some short-covering into the end of next week.
FOR MONDAY: (7/11) Hard to put out orders for Sunday night given that world weekend events are still rather crazy so we’re happy to go home flat and consider new positions on Monday. If we get a pullback on the dollar Sunday, we’ll want to buy and we still like stocks for at least one more day but risk/reward may be gone by Monday morning. Crude looks lower next week and Friday’s bounce was rather wobbly.
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