Oliver Sloup was on RFD-TV this morning sharing his thoughts on the grain and livestock markets as we start a busy week.
Transcript: Find that out after that was the report. But how about Oliver Sloup? Oliver is with blue line futures. And there’s so many things we could focus on here Oliver, but I think the big one is just waiting till USDA releases the report.
Yeah, absolutely, it’s just kind of wait and see right now. Unfortunately, the snowball continues to build a bearish news is good. Weather continues throughout most of the Midwest, and thoughts of a big crop getting bigger continue. Will today’s USDA report confirm that, or will we fall short of expectations? We’ll find out here, as you mentioned, within about an hour. So so whatever I say right now probably gets overridden here later this afternoon, but some of the interesting things that we’re looking at you’d mentioned, kind of pre positioning. Is that fun position? We know that the funds have been very aggressively short in the corn and soybeans, but they have been reducing a little bit in the corn market, which you wouldn’t guess by looking at the prices, but I find that pretty interesting. The divergence there last week’s commitment to traders report had them reducing about 52,000 futures and options contracts on the short side, so they’re now in that short 243,000 contracts. And if that becomes a bigger trend, maybe that’s what supports this market. But really need to see some sort of a silver lining and bullish catalyst to get those funds moving out of those positions in a more meaningful way, potentially on the technical side, you can get a close out above $4 to 403, maybe that sparks a little bit of risk adjustment there. And then for soybeans, kind of the same thing. Everybody’s got their eye on that big round number, $10 for that new crop November contract.
Okay, so wheat, France, 40 years since we’ve seen I don’t think disaster is the right word, but that soft winter, we are soft wheat in France. They’re under pressure there. So we do have some positive news out in the wheat market, but the markets can’t hold it.
Yeah, and that’s really disappointing. We often refer to that as a fundamental rejection, where you get news that should be supportive, and price isn’t really reflecting that. On the wheat market, there actually has been a little bit of strength over the last couple weeks, but it really lacks some conviction, and we really stalled out against some big resistance levels in Friday’s trade. And what’s a seasonally a bearish time of year for the wheat market. So the fact that we weren’t able to get any real solid momentum above technical resistance on friendly news is certainly a little bit of a caution flag. And we talked about the fund positioning corn and beans, it’s interesting to note that funds are only short about 70,000 futures and options contracts in the wheat market, which sounds like a lot, but if you zoom out, it’s less than half of the record net short position, which we saw not all that long ago.
You mentioned resistance. I’m going to use that as a segue into the livestock markets. We’ll come back and talk with Oliver in a moment. Look at resistance in live cattle futures. Market Day report continues after this. Trade down seven cents on the October, 7390 that in spite of the port cutout moving up 43 cents on Friday, Oliver slopes with blue line futures. Okay, Oliver, before the break, I kind of tease this finding some resistance in the October live cattle contract. Are we there?
We have hit a little bit of resistance. A key Fibonacci retracement above where we’re at right now would be the 50% retracement at 182 67 for that October contract, and the 50% retracement is just a fancy way, say, in the middle of the range from the recent highs to the lows from the breakdown point here recently. So if we’re able to retest that, I think that would probably act as pretty stiff resistance, and I wouldn’t be surprised to see us try to get back up there. You meant to mention the cash trade being strong and resilient, and that’s certainly a silver lining. Hopefully the futures market can take note and get us a little bit higher. But I continue to be in the camp that these rallies and relief rallies that we see following last week’s sell off are probably going to be meant to be used as opportunities to look to the downside, whether that be from a speculative trade or for protecting downside exposure, not just in the October contracts, but I think you could also go look at the deferred out in December and the next year, February, April as well, in live cattle and feeder cattle as well. So nice to see a strong close on Friday. A little bit of both side two sided action here to start the week. So it’ll be interesting to see if we can’t get a little bit. Higher trade through midweek, and look to re establish some hedges for guys.
Okay, and we didn’t even have time to talk about hog slaughter, 2.3 7 million last week, including projected Saturday kills. Such means we’ll have to do this again later in the week. Oliver Sloup with blue line futures in Chicago, and that’s where we are here at midnight. I’m
Oliver Sloup, Vice President and co founder of blue line futures. Join me on my journey for this year’s Pro Farmer crop tour, August 19 to the 22nd I’ll be on the eastern leg, which starts in Ohio, goes through Indiana, Illinois into Iowa and then up to Minnesota. I’ll be sending out my normal daily grain market commentary as well as special updates from my findings on my route throughout each day. Sign up for these updates by filling out the form on this page, and we’ll send you one of the best looking koozies around. And I love corn koozie because who doesn’t love corn? Thank you, and I look forward to you joining me on my journey. You.