FOR FRIDAY: (5/25) Fridays before 3-day weekends are usually quiet. Usually by 9:30 am everyone who came in is gone. Not sure if GDP will mean much. Markets are open Sunday night and usually until 10:30 am-12:00 pm on Monday so check with your broker. Asian and European trade can be brisk sometimes. Cycles over the weekend do have a high terrorism alert and there might even be some major domestic violence. Be safe with holiday driving particularly this weekend. Continue reading
Focus on weekend weather
FOR FRIDAY: (5/26) Fridays before long weekends can be rather sideways. We have to wait for Monday’s weather to get any new surprises out of the market and while we have weekend rain, not sure the market cares that much more given that it only could push corn up to 375 earlier in the week.
JULY CHICAGO WHEAT (electronic ok)
TODAY’S COMMENTS: (5/26) Not much action here. Wanting to take profits at 422.75 on partials but wondering if we’ll have to wait until Monday night or Tuesday to get it. First support at 422 and then 416.50.
FUNDAMENTALS: (5/25) The lower crude oil, technical factors and possible corn acres being switched to soybeans may have been selling factors. Soybean planting has gone well so far, with 53% done as of Sunday, 1% better than both the five-year average. Planting was ahead of the state average in Iowa, but behind in Illinois and Indiana
OVERALL: Seasonal pressure is always on winter wheat into late May and it can sometimes extend into mid-June. Three waves down on the weekly continuation chart project 3.99 and the USDA has given 3.85 as the lower end for where prices may go and they figure the market will not get above 465. Hard for us to see wheat getting above 438-440 again and given the downside potential to 399 or 385 on July wheat, we have to continue to sell rallies. First place July wheat will fall is 418 and then 410-2.
CYCLES OVERVIEW: Higher into May 26; May 29-31 low.
Stocks may take profits after Thursday’s high
FOR THURSDAY: (5/25) Will the trade go flat before the long holiday weekend already on Thursday? It will thin but Thursday will be a better day to trade vs. Friday. We have the markets open most of the holiday weekend in electronic trading and have outlined cycles for the weekend. We think stocks will take profits after Thursday’s high and that the dollar will do short-covering from a new low on Thursday, and that will pull gold off after a secondary high on Thursday. Looks like crude will get stuck with sell the fact but we won’t play until OPEC is clear but it looks like a sale Friday-Tuesday of next week.Continue reading
Hogs not done until 8290-8300
FOR THURSDAY: (5/25) We had a bias toward higher grains on Thursday and they usually are not higher this day. Cattle in transition and have to leave it alone and if you want to gamble on a weak reaction to the report for Friday, get in on Friday. Hogs not done until 8290-8300 comes in.Continue reading
Gold and silver higher into Thursday
FOR WEDNESDAY: (5/24) We looked closely at cycles this week and not seeing anything to knock stocks down, and the trade is blowing off the latest scandal rumors and is more interested in increasing end of the month profits. Dollar looks lower into Wednesday/Thursday and gold and silver higher and oil looks higher into June 3, and there is enough of a breakout that we can probably buy dips.Continue reading
Could see short-covering Thursday
FOR WEDNESDAY: (5/24) We usually don’t want to be short grains on Wednesday so watch carefully and take partial profits and move stops down. We could see short-covering on Thursday before the long weekend but market looks lower after the holiday. Corn and soybean futures closed lower as USDA data late yesterday showed farmers successfully dodged most of last week’s rain showers to stay current on spring planting. Wheat futures slipped as USDA data also showed some improvement in the winter wheat crop and good planting progress for spring wheat.
JULY CHICAGO WHEAT (electronic ok)
TODAY’S COMMENTS: (5/24) Break to 428 means we’re on the right side of this market. First support at 422 and then 416.50. Market may bounce on Thursday but I think we can be short into the weekend. While the weather remains troublesome for winter wheat, with more rain forecast later this week for the Plains, USDA said the crop improved 1 point to 52% good/excellent last week, contrary to forecasts for a small slippage in ratings. However, Illinois wheat lost ground with USDA rating it 44% good/excellent compared with 52% the prior week.
OVERALL: Seasonal pressure is always on winter wheat into late May and it can sometimes extend into mid-June. Three waves down on the weekly continuation chart project 3.99 and the USDA has given 3.85 as the lower end for where prices may go and they figure the market will not get above 465. Hard for us to see wheat getting above 438-440 again and given the downside potential to 399 or 385 on July wheat, we have to continue to sell rallies. First place July wheat will fall is 418 and then 410-2.
CYCLES OVERVIEW: Lower into May 24; higher into May 26; May 29-31 low.
Dollar looks lower into Wednesday/Thursday
FOR TUESDAY: (5/23) We looked closely at cycles this week and not seeing anything to knock stocks down, and the trade is blowing off the latest scandal rumors and is more interested in increasing end of the month profits. We can’t be bearish but we are sure where we can get an entry. Dollar looks lower into Wednesday/Thursday and gold and silver higher and oil looks higher into June 3, and there is enough of a breakout that we can probably buy dips.Continue reading
Expecting lower grain prices for a few days
FOR TUESDAY: (5/23) Bean plantings were below expectations for 56% but still average for this time of year. The 29/30 day cycles are lower on Tuesday and are inclined to expect lower prices for a few days now. Need to see wheat break; otherwise we would be concerned. The cycle into Thursday is often rather bearish for many markets and we would rather be short cattle and grains.Continue reading
Stocks look like a buy on Sunday
FOR MONDAY: (5/22) We are always nervous about putting out orders over the weekend break given the political circus going on but it does look like stocks are a buy on Sunday if nothing happens.
JUNE E-MINI S & P 500
S&P ANALYSIS FOR MONDAY: (5/22) Support at 2376.50 and 2374. Market did fail at the 78% retracement area of 2388. Next push up projects 2400. Much under 2370 and the market may be doing a congestion triangle. The more bearish pattern would to be that if we do get the 78% retracement, it would set up a huge congestion triangle pattern between 2350-2380. Bears who missed Wednesday’s fall have to remember that funds and cheap money will come to the rescue—because that’s what they do. We feel that chills and spills may be happening from mid-June into October but we usually get complicated topping energy in late May and early June. We did get technical sell signals on Wednesday but that doesn’t mean the market has to go straight down right away again.
Cycles for Monday look particularly friendly so unless NYT or WaPost come up with new scandals, the trade will go back to buying the dips In fact, we looked at cycles for next week closely and probably only next Friday into Memorial Day does the market start looking really vulnerable again so we should look at this as a sucker punch. We had thought about early June as a secondary high. We’re not quite ready to go for new highs but there are some patterns that can be read that way and nothing about this market will surprise us. So I think we have to forget about Wednesday and see what develops on recoveries into next week.
As for the rest of the day, if the market cannot fall much below 2375, then I suspect the market is going to recover higher. Complicated political crosscurrents are going to increase volatility.
There a patterns that would allow 2400 and then a push to 2340 and they are not out of the question.
LONGER TERM: (4/26) Expecting that 2150 is the most likely first downward target into September/October if the market can close below 2300. May not get the sell signal until June.
CYCLES OVERVIEW: Higher Monday; generally lower into May 24.
Grains higher on Monday
FOR MONDAY: (5/22) Corn futures closed higher for the day and for the fourth straight week as rain and cold weather may impede the last of this year’s planting and possibly cause some fields to be replanted. Soybeans finished higher for the day but lower for the week. Investors are watching action in Brasilia, Brazil’s capitol, where President Michel Temer is being investigated for bribery. The Real on Friday recovered about half of what it lost yesterday when the allegations were first reported. Wheat had big daily gains with hard red winter wheat recovering nearly all that it lost earlier this week. Severe storms and flash flooding are expected in the plains today and in the Midwest tomorrow, where winter wheat needs dry conditions.
We can see grains higher on Monday if they react to the weather but that may be higher for the week so if you’re short, you have watch stops.