It was a better day for the grain and livestock markets relative to the start of the week, are better days ahead?
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Transcript:
Good afternoon. This is Oliver Sloup Blue Line futures. Today is Thursday, July 11, we just closed up in the grain and livestock markets. And it was certainly a little bit better of a day for both of those relative to what we saw in the first half of the week. Before we get into today’s price, action. And charts, I do want to remind you, if you have not signed up for a free trial of our daily commodity commentary, head over to Blue Line futures.com. From there you select the sign up button and select the markets that you want to read about each and every day, we’ve got a great team in house that puts that content out if you’re newer to futures and options and they’re just looking for a little bit more educational information, we’ve got a great educational platform here, select the education drop down head straight over to the university is what I’d recommend get anything from introduction to futures, all the way down to kind of hedging with grain and hedging with livestock futures and options as well. If you’re interested in other markets, like interest rates, metals, Bitcoin, etc, a lot of great information there as well. So again, check it out blue light futures.com. Now that we got that out of the way, we can jump right into the charts. Now, as mentioned, it was a slightly better day in the grain complex. And what we saw, in the first half of the week, we saw December corn trading up into our kind of pivot pocket, which we’ve outlined in our daily commodity commentaries for 12 to 413. And as you can see here on the chart, we’ve got a four hour chart. This has been you know, an inflection point, the bulls really want to get back out above here to spur some additional short covering to propel prices, maybe upwards towards at 420 level. But again, it’s 412 Before 13, this is the low from the quarterly stocks report, the breakdown point here on July 8, and then it’s been resistant since then. So again, we want to see a close out above there to spur additional short covering until then it’s just kind of a whole hump sideways trade. Now weekly export sales for corn this morning, came in at 538,000 metric tons that was up 51% from the previous week, but down 13% from the prior four week average new crop sales that came in at 116,000 metric tons, which was at the lower end of expectation. So maybe that was kind of muted the strength that we saw through the bulk of the overnight price action. Now moving over to the soybean chart again, we’re going to zoom in here on the four hour chart, I think it just gives you a little bit better representation of where we’re trading through today. And the early morning trades. So you can see these big, big red bars are right at the 830 open so you get a little bit of strength in the overnight trade. And then they just slam it on the open through the bulk of the trading session. Again, the fact that we haven’t really gotten any significant rise in demand is still a dark cloud over this market. This morning’s export sales for soybeans, again, very lackluster came in at 208,000 metric tons that was down 9% from the previous week and 40% from the four week average. And that crap for news, our net sales for new crap came in on 191,000, which was the inline expectations. But again, nothing really to write home about now, from the technical perspective on the soybean chart, you know, typically we like to look for previous interaction between buyers and sellers to really give us points of support and resistance. But with the market basically here at new lows, there isn’t that previous interaction to go off so it comes more of a momentum, trade and money flow situation. So you want to kind of see the market stabilize and potentially buy on strength if you’re looking to be long the market or to cover shorts. And there’s obviously still in full control ahead of tomorrow’s report, which does remind me I’m not really expecting a whole lot and tomorrow’s report. But we do have the expectations posted on the Facebook group ag chat, traders hitters and producers so you can go check out that and if you’re not a member of that, go ahead. Sign up post a lot of great content throughout the day charts, fundamentals, estimates, reports, etc. Again, that’s
the Ag cat Facebook group. So
all right now moving over to the wheat market wheat market had a nice pop higher in the early morning trade yesterday in our video we talked about 550 to 560 as a potential value zone for the wheat market. And that looks to be a pretty well, you know well played out in the overnight early morning trade with a nice bounce trading up near 580. However, following that 830 Open prices drifted mostly lower and finished the day kind of near the lower end of the regular trading hours range. So we’re still upbeat that we can get a nice little pop from here but the overall price action from 830 into the afternoon was somewhat disappointing. Weekly export sales over the previous two weeks were really strong this week. Not as strong On, came coming in at 240,000 metric tons, and that was just a hair below the low end of expectation. So, a little bit of a cause for pause there on our recent optimism and the wheat market, cattle futures, they were able to gain some ground today. But all in all, not a whole lot has changed on the technical landscape. As we continue to kind of drift near and linger near the low end of trendline support. My concern continues to be that if we break and close below there that could potentially open the floodgates, you’re starting to see some concerns grow or softer economic data, we saw it again. And this morning CPI report we saw stocks kind of roll over following that. And potentially that keeps the would be buyers at bay, ie the funds and cash does remain mostly strong. Like we were seeing 188 down in Texas which is about $2 softer than last week. So we are starting to see the cash market comment a little bit it’ll be interesting to see if the cash market continues to come down to the futures market or if they can work together either way, I kind of am in the camp that the upside is probably going to be limited at this point. And the same can be said for the feeder cattle market. Here we’ve got the August contract pulled up here and we’re again we’re just kind of layering near trendline support which I guess is from a risk reward standpoint is a decent opportunity to the to the buy side. But again breaking close below there and there could be some air underneath the market so that would be my concern. Now on the hot side of things, boy what a yo yo have a market that has been limit down the August contract yesterday. Now because August was the only contract limit down. We did not have expanded limits. It was at 375 limits for today’s trade we did open lower, but had a nice rebound in today’s trade. And the upside objective for anybody that wants to be long the market is this trendline resistance the 20 day moving average and the gap net all comes in near 88 and a half if the markets able to get back out above that 88 and a half level potentially that spurs a little bit more of a relief rally going forward. And then lastly, I want to touch on gold and silver. We talked about that yesterday. Being on our radar is kind of the the bright spot or potential bright spot in the commodity world. And we saw it today following the CPI report that was softer than expected gold back out above 2400 bucks with some conviction and that opens the door for potential retested back to the contract highs and you’re 2475 Sober also looking very constructive. We do have more economic data out tomorrow morning. 7:30am Central in the way of PPI so again, expect some volatility there but softer than expected data. I like these metals to the long side going forward. Knock on wood so that’s what we’re looking at again. Remember, trading futures and options involves substantial risk of loss and it’s not suitable for all investors.