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LEQ8: .775 at 103.50, trading in a range of 1.675
LEV8: .80 at 106.95, trading in a range of 1.40
GFQ8: 1.025 at 146.80, trading in a range of 2.10
GFU8: .825 at 147.30, trading in a range of 1.975
Cattle Commentary: Cattle futures finished the day on higher ground but with little conviction. The market made it’s high for the day at 9:30cst, which we have been noting as a time where volume dries up and the market comes back frequently over the last month. For clients who are more active, this is a trading opportunity to capitalize on a bounce from technical support. If the market clears 103.75-104.00, we could see an extension towards 105.35-105.50. That is the top end of the range, and we would look to be sellers on the first test. Cash trade continued to come in today, ranging anywhere from 105-108.
PM Boxed Beef / Choice / Select
Current Cutout Values: / 213.24 / 200.66
Change from prior day: / (2.06) / (.22)
Choice/Select spread: / 12.58
Live Cattle (August)
Resistance: 103.75-104.00**, 104.90**, 105.375-105.525****
Support: 101.65-101.90***, 100.05-100.40****
Feeder Cattle (August)
Resistance: 147.95-148.425**, 150.275-150.75***
Support: 144.90-145.50**, 142.175-143.00****
Lean Hog Commentary and Technicals (August)
Resistance: 76.90-77.25***, 77.70-78.30
Support: 73.275-74.00****, 70.10-70.55***
Yesterday’s Close: Corn futures finished yesterday’s session down 7 cents, trading in a range of 7 ½ cents. Funds were estimated sellers of 13,000 contracts.
Fundamentals: Today is the day! We will get new news from the USDA at 11am cst, regarding planted acres and quarterly stocks.
Range of Estimates: 85.5-89.4 million acres
Average Estimate: 88.4 million acres
March Report: 88.0 million acres
Range of Estimates: 5.004-5.500 billion bushels
Average Estimate: 5.276 billion bushels
March Report 8.888 billion bushels
Once we get this report behind us, attention will turn right back towards weather and trade.
Technicals: Yesterday’s selloff into the close was gut wrenching for the bulls left in this market. Though we are stabilizing in the overnight and early morning trade, we would not be surprised to see the market soften, shaking out the weak longs. The chart is a technical graveyard, and the bulls have A LOT of work to do before they can begin feeling comfortable. A conviction close back above 376 ¼-379 ¼ would be one small step for bulls, one giant leap in repairing the chart.
Resistance: 376 ¼-379 ¼****, 387 ¾**, 397 ½-399 ¼****
Support: 359-360 ½****, 345 ½-350****
Yesterday’s Close: November soybean futures finished yesterday’s session down 4 ¾ cents, trading in a range of 10 ½ cents. Funds were estimated sellers of 5,000 contracts on the session.
Fundamentals: Bullish market participants are hoping for a repeat of last year’s report where we saw beans rally $1.05 ¼ in the 12 sessions following the report.
Range of Estimates: 89.1-90.6 million acres
Average Estimate: 89.7 million acres
March Report: 89 million acres
Range of Estimates: .965-1.305 billion bushels
Average Estimate: 1.204 billion bushels
March Report 2.107 billion bushels
Once the market digests today’s numbers, attention will turn back to weather and trade talks with China. We are expecting to hear something more concrete within the next week regarding trade.
Technicals: This is one of the uglier charts out there, there’s no doubt about it. The inability to garner additional short covering after last Friday’s close was a big caution flag that has prompted a buyers strike this week. The market remains in oversold territory with an RSI (relative strength index) of 22.35. We are expecting a volatile trade on the release of the report and would not count out the possibility of a stop hunt below the June 19th lows of 864 ½. Bulls need to reclaim the $9.00 handle from a psychological perspective, but the more significant pocket comes in from 921 ¾-923 ½. If the bulls can achieve a close above this pocket in the next week, we would expect that to spur additional short covering.
Resistance: 897 ¾-901 ¾***, 921 ¾-923 ½****, 935-939 ½***
Support: 882 ½**, 857-864****, 844 ¼**, 825****
Yesterday’s Close: September wheat futures finished yesterday’s session down 5 cents, trading in a range of 10 cents on the day. Funds were estimated sellers of 4,000 contracts.
Fundamentals: All eyes will be on this morning’s USDA report, out at 11 am cst. We will also be watching the reaction of corn and beans as there could be some spillover price action.
Range of Estimates: 46.7-47.7 million acres
Average Estimate: 47.2 million acres
March Report: 47.3 million acres
Range of Estimates: 1.042-1.200 billion bushels
Average Estimate: 1.101 billion bushels
March Report 1.494 billion bushels
Technicals: The market is consolidating near the low end of the range as traders wait for new news to give us a technical breakout or break down. Our support pocket from 175 ¾-480 remains intact, a close below could open the flood gates for a swift move lower, our next support pocket comes in at 450 ½-454 ¾. On the resistance side of things, the bulls want to reclaim ground above 496 ¼-500 to encourage another move higher. This pocket represents a key Fibonacci retracement and the 200 day moving average.
Resistance: 496 ¼-500***, 510 ½-513 ½****, 523***
Support: 475 ¾-480***, 450 ½-454 ¾****
If you have any questions about the commodity futures and options markets, trading or opening an account please let us know!
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