Gran traders will continue to keep a close eye on South American weather through the remainder of the year as it could have big implications on near-term price action.
TRANSCRIPT
Because I like to invite my guest in, Oliver Sloup, this morning. he’s with Blue Line Futures. And however, we know that we’re wrapping up this year and getting ready for next year and there’s not going to be a great deal happen the rest of this week. But tell us what we’re looking forward to the next week.
Well, yes, yes. You’re mentioned kind of wrapping up the last few weeks of the year here. You’re starting to see a little bit of weakness in the grain markets, but nothing overly concerning. You’re still seeing some of these volatility levels at their lowest point since the start of the year, specifically for that corn market that March contracts specifically.
It just kind of seems to be a stick in the mud near four eight. You can’t really have much conviction on either side of that. Seasonally. We can try to carve out a low here in the corn market in the middle December, but I’m not so sure that that’s going to be able to happen this year. I wouldn’t be surprised to see us turn the calendar over before any fund managers decide that they do want to do any repositioning and talking about fund managers and the commitment to traders.
Report went up on Silk Net chart about 151,000 futures and options contracts. They’ve been that short for a while. They haven’t had good reason to exit those shorts for the time being. So I guess the path of least resistance there is is still lower, but I don’t really see us rolling out of bed. I think where my concern is, is in the soybean market.
We know that there’s a lot of concerns down in South America with regards to weather and the crop potential down there. But with that, in the back of our minds, along with the fact that we’ve gotten a string of flash sales over the last two weeks, this market has not been able to trade higher decisively. And if you can’t trade decisively higher on the back of bullish news, that raises a caution flag, in my opinion.
And we’ve seen funds liquidating for the last three or four weeks in that commitment to traders report they’re now net long, only about 31,000 contracts. So my my caution flags are definitely up. And soybeans, if we get some rains down in South America, I wouldn’t be surprised to see this market break lower into the new year. Yeah, and I had a really good question posed to me last week on about the maize when they were asking about the export sales.
And we saw 125,000 bush times share, 125,000 times sell to some unknown destination. And they said, how much is that? Well, I did a little mastering and and equates down to about 860 to Bush excuse me 862 contracts is what they did. So when we put it in our terminology, you know, and we think cash is a lot and, you know, they tried it out in about every 35 to 40 minutes on the market.
So when we look at those export numbers, it kind of helps to turn it down just a little bit to to kind of in the numbers where you and I are used to looking at. And that would be in bushels or in contracts there. So I tell you what. All right. Stay with me. We’re going to go away and take a real quick short break and come back and talk some livestock.
But all the slogans, stay with it. I like to invite my guest back in all of our sloping in and all of we’ve seen all kinds of activity in the cattle market. But now of I’ve heard some things and I’ve heard that the cash market a little bit better than what I thought. We’ve got the weight so increasing just a little bit.
Anything really specific we need to be looking for for the first of the year? Well, I think over the last couple of months, the market’s obviously just been beaten and battered. And I really don’t think this holiday season could have come at a better time where you start to see maybe some participation thinned out in the last couple of weeks of the year.
And that offers a little bit of support and maybe can see some consolidation and chart recovery mode here in the cattle complex. As we looked at the end of the year, the cash market obviously, you know, firming up a little bit would certainly help. And looking at the fund positions, they weren’t that long, you know, 120,000 plus contracts and the middle of the summer, summer, they’re now down to just net long, about 22,000 futures and options contracts.
So their exposure is very minimal. And if we do start to see some of these fundamentals firm back up once we turn the calendar over, I wouldn’t be surprised to see that invite some more participation back into this market and help us go a little bit higher. Now, does that mean we’re going to go retest the highs? I wouldn’t stick my neck out and say that, but I do think that we can continue to work higher.
There’s going to be pullbacks here and there. I, I ultimately next couple weeks and at the end of the year, I think we consolidate, we turn the calendar over. I think you can probably see a little bit more upside potential, but again, this holiday trade is going to be probably like watching paint dry here towards the back half of the week.
Yeah, I don’t doubt that at all. And I know we’ve got our bases now in the feeder cattle market back to a negative, but it’s still fairly tight. It hasn’t really spread out yet. Does that give the futures strikers some room still to grow? Yeah, I think it does a little bit. The feeders are certainly a different animal and looking at the fund positioning like we do in other markets, you can see the participation just really isn’t there.For a lot of fund managers. So that market can fly around quite a bit more than what you see in life cattle or corn or soybeans for that matter. So it’ll be interesting to see how these funds kind of position end at the end of the year, kind of with live cattle. I wouldn’t be terribly surprised to just see some consolidation, a little bit of back and forth.
Obviously a great way to start the week, but I wouldn’t be surprised to see that kind of turn to a muted response midweek to the back half of the week. Absolutely. And get cattle on feeder forward, if I’m not mistaken, towards the end of this week, too. All of a sudden, it’s taking the time to be with us.
Absolutely. Appreciate you taking the time, all of us, Lou, is with the blue line trading. That’s exactly who he’s with. So it’s interesting talking about all these reports still to come. So we’ve got numbers coming. abs. All this week. Yeah. There’s really not going to be shops. I just have to deal with a little bit of everything.
Thank you, Chris. With Chris Swift trading appreciation after decades of service to the Tennessee Farm Bureau.