FOR TUESDAY: (6/6) Everything revolves around Thursday’s British elections and the ECB and then we have FOMC coming up on June 14. We should get congestion of last week’s gains for a while and this may lead to boring trading. Can do quick trades from key numbers as they set up but most didn’t set up on Monday.Continue reading
Focus on weather, planting progress
FOR TUESDAY (6/6) The trade was watching the U.S. planting pace with a mixed forecast for the Midwest and Plains over the next few days. As of Sunday, 83% of U.S. beans are planted, compared to the five year average of 79%, and 58% have emerged, compared to 59% on average. No states have officially wrapped up planting activity. Corn was also watching planting, and re-planting, weather, along with on the ground conditions ahead of the weekly USDA crop report. According to the USDA, 96% of corn is planted and 86% has emerged, both 1% slower than the respective normal paces. 68% of the crop is in good to excellent condition, up 3% on the week. Wheat was watching the weather as well with concerns about spring and winter wheat conditions, but the supply side of the market is bearish, especially for Chicago and Kansas City. For winter wheat, the USDA says 87% of winter wheat has headed, compared to 85% typically this time of year, and 10% is harvested, compared to 7% usually in early June, with 49% of the crop in good to excellent shape, 1% less than last week. For spring wheat, 90% has emerged, compared to 85% on average, and 55% of the crop is called good to excellent, a week to week drop of 7%.
Next week may be congestive, spurring range trading
FINANCIAL MARKETS OVERVIEW FOR MONDAY: (6/5) There are a lot of big events for next week with ECB, the UK elections and we’re approaching FOMC on June 14; all of this may lead to congestion and profit-taking rather than acceleration as everything got unleashed on Friday and then will continue to finish on Sunday. We have to remember to chase markets on these report breakouts but too many years of whipsaw-action has given us too many war wounds. That means next week may be a bit congestive, spurring lot of range trading. .
Hogs a buy on dips
FOR MONDAY: (6/5) Wheat harvesters this week said yields in Texas and Oklahoma were lower than expected and some fields were grazed by cattle instead of allowed to mature.
Forecasts keep scattered showers and cool weather in the Midwest the next few days. The latest 6- to 10-day outlook (June 8-12) is dry but cool for most of the Midwest. Market may do minor highs into Monday and then congest before the USDA report on the 9th but we do see June cycle highs due into June 12-13, which means we may get some more Eastern wet weather to take the market up.
Starting to look more like a year where the market bottoms into late June and early July and then has no where to go. Cattle still look higher next week but hard to buy and hogs are a buy on dips.
S&P 2520 could come in early summer
FOR THURSDAY: (6/1) First-of-the-month action if usually a buy for fund managers but in June they have to be a bit cautious given prices at S&P 2400. Still, we think 2520 could come in early summer before this market corrects into October. Wondering how much sideways congestion will happen or if no one really cares about the employment report for a market that goes straight up.Continue reading
Cattle too strong to sell
FOR THURSDAY: (6/1) Usually meats and grains are lower on Thursdays but not clear on grains this week. First-the-month fund buying may lift some oversold conditions for bargain hunters. Hogs aren’t done enough to sell and cattle are too strong to sell.Continue reading
Open to congestive action, minor break into Sunday
FOR WEDNESDAY: (5/31) We had one of those days when people aren’t quite back from vacation and now we move to the end of the month. Will we get end of the month profit-taking so they can buy it back up? We’re open to congestive action and a minor break into Sunday of next week but not sure it means that much unless S&P 2375 comes out–and not likely. One more day lower for gold and silver and then higher into Friday.Continue reading
Ag markets moving toward position squaring
FOR WEDNESDAY: (5/31) Corn opened sharply higher as the ping-pong match continues between 376 and 366. Markets were overdone on Tuesday and a bounce here is healthy. Downward patterns weren’t quite completed for wheat and beans so we’re open for another thrust lower. Cattle liked news out of China but still may be in trouble overall and look lower on Thursday. Markets moving toward position squaring for the end of the month by funds and that often distorts everything so continue to bank profits and move stops lower.Continue reading
Sideways action after holiday likely
FOR TUESDAY: (5/30) Quiet markets on Monday didn’t tell us much. The Fed’s Williams said three rate hikes in 2017 made sense and balance sheet normalization should begin this year. The pound posted the biggest gain among G-10 currencies, though the bounce wasn’t enough to erase Friday’s plunge when polls showed the coming election may be closer than expected. Oil trades back under $50/bbl as boost in U.S. drilling activity threatens OPEC’s efforts to reduce a global supply glut. On Friday Baker Hughes revealed U.S. explorers added 2 rigs to 722, highest level since April 2015. After the market was unimpressed with accord Thursday to prolong output limits, Saudi Arabia’s Energy Minister Khalid Al-Falih said the strategy is working, global stockpiles will drop faster in 3Q
As Bloomberg notes, despite the longest winning streak for U.S. stocks since February and record highs posted by equities globally, the ongoing bond rally hints at an undercurrent of investor caution. With the fate of the Trump administration’s pro-growth stimulus plans uncertain, the dollar is one of the weakest-performing major currencies this year, even as the Federal Reserve prepares for more rate hikes. Gauging the ability of the global economy to withstand rising borrowing costs will be key for traders.
“The U.S. economy is about as close to the Fed’s dual-mandate goals as we’ve ever been,” Federal Reserve Bank of San Francisco President John Williams said in Singapore on Monday. “With the attainment of our dual-mandate goals close at hand, it’s more important than ever for monetary policy to work toward what I like to call a ‘Goldilocks economy’ -– an economy that doesn’t run too hot or too cold.”
Three-day holidays can be crazy but not enough news to create that. We often can see sideways action as people come back late from the holidays. Still, the first day of the trading week before employment report can be a big-range day.Continue reading
Friday’s rallies may begiven back early in the week into May 31
FOR TUESDAY: (5/30) Will the trade focus on the wetter Eastern corn belt which pushed the market up last week or the drier and warmer weather by the end of the week? I suspect that Friday’s rallies will be given back early in the week into May 31 but it does seem that prices may go higher into mid-June based on wetter and cooler weather in the East. Cattle on Feed report came out early during trading hours because of the holiday and left us all with no risk/reward if we left early for the holiday. Still may be able to get something on. Few more higher days for hogs we think.
JULY SOYBEANS (electronic ok)
SWING TRADING RECOMMENDATION: Hold July bean shorts from 957 with a 945.50 stop. Exit more partials at 906.00.
TODAY’S COMMENTS: (5/30) We do see lower prices the next few days into the end of the month. We took more partial profits at 933.50. Support is at 922.75 and 905. The solid break below 930 opens the door for eventually seeing 897-905. Rallies may have trouble taking out 935.50 now. We had suggested partial profit at 945 and that came in and the break below 938 easily project 933.
OVERALL: Daily chart suggesting 895 and if acreage increases, it’s possible.
NEAR TERM: (5/12) Five waves down projects 895 or 904. Cycle lows could continue into May 31. We should get a recovery into June 12 and June 16 and the lower into the June 30 USDA reports.
CYCLES OVERVIEW: May 29-31 low.