Grain and livestock markets were weaker to wrap up the week, Oliver Sloup revisits a chart from previous videos to discuss what could be next.
Grain Recap
Corn and soybeans made new lows to wrap up the week while wheat hung on to small gains. At the close December corn was 4 ½ cents lower to settle at 392 ½, for the week that was 2 ½ cents lower. November soybeans lost 11 ½ cents to settle at 957, that was a whopping 45 ½ cents lower for the week. December wheat, which is now the most actively traded contract was 2 ¼ cents higher to settle at 552 ½, that was still 13 ¼ cents lower on the week.
Managed Money added to their bearish bets in this week’s CoT report, but are off of their record net-short positions established earlier in the year. Funds added 6,462 contracts to their net-short position across both futures and options now totaling 249,007 contracts (record net-short 363-983 contracts). In soybeans, managed money was reportedly net-short 174,447 contracts, which is 5,431 contracts higher than last week (record net-short 185,750 contracts). Fund activity in wheat was nominal as funds reported a net-short position of 73,288 contracts, just 1,956 more than last week (record net-short 132,327 contracts.
Livestock Recap
Livestock markets got hit hard to wrap up the week. At the close October live cattle were 2.45 lower to settle at 178.30. For the week that was 2.85 lower. September feeders were 4.17 lower to settle at 239.50, that was 2.10 lower for the week. and on the snout side, it was a lower day as well with the front month October contract leading the way lower, settling at 75.07, that was down 1.42 for the day, trimming gains for the week to 1.10.
This mornings boxed beef report was firm with choice cuts 59 cents higher to 317.53 and select cuts 1.05 higher to 303.08. Yesterday’s 5 area average price for live steers was reported at 187.63, on the softer side of what we’ve seen recently. Daily slaughter was reported at 120k head, which puts the week to date total at 476k head.
The updated Commitment of Traders report showed Funds were net sellers of 8,910 contracts through August 13th, shrinking their net long position to 44,892. For Feeder cattle, funds were sellers of 1,955 contracts which puts them net short 2,639 contracts. And for lean hogs, funds were net sellers of 12,370 contracts, putting them net short 2,269.
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Transcript: Good afternoon. This is Oliver Sloup with blue line features. Today
is Friday, August 16, which means it is your last chance to get signed up for our updates from Pro Farmer crop tour. I’ll be on the eastern leg driving down to Ohio Sunday night, and then on Monday, we go through Ohio and then work our way into Indiana, through Illinois, into Iowa and up to Minnesota. I’ll be sending out the normal daily grain and livestock commentary each and every morning, along with special updates from my route each and every day. So if you want to get those updates emailed directly to you, head over to Blue Line futures.com From there, you can select markets and research that drops you down to crop tour 2024 and from there, submit your information, get signed up for the updates, and we’ll send you a free koozie as well. Because who doesn’t love corn and who doesn’t need that I love corn koozie to keep their favorite beverage cold this summer. So head over to Blue Line futures.com get signed up, and we’ll get that koozie sent out to you, and those updates will start coming to you Monday morning. Now that we got that plug out of the way, we can go over some of today’s price action, which was mostly lower across the board, grains and livestock, with the exception of the wheat complex, we’ll start with the closing prices for grains. At the close, we saw December, corn futures, four and a half cents lower to settle at 392, and a half new crop. November, soybean futures, 11 and a half cents lower, settling at 957,
and on the wheat side, again, it
was slightly higher. September, Chicago contract, one and three quarter cents higher. We had the hard red wheat and spring wheat contracts also higher on the day. On the livestock side of things, it was very, very red. October, live cattle, $2.45 lower to settle at 178 30 September, feeder cattle, $4.17 lower to settle at 239, 50 and on the south side, it was the October contract leading the way lower $1.42
down on the day to settle at 7507
what are we going to talk about with all that negativity? Well, at least the the cattle complex is offered a little bit more of a two sided trade over the last couple weeks, as opposed to grains, which have just been a slowly lower so we’re going to touch on the October live cattle contract. We’ve got this pulled up here. And I also want to kind of bring to light the livestock roundup that we send out each and every morning as well. This is more of an update of what we’re looking for each and every morning. Now we talked about the market being really, really oversold here at the first week of August, and looking for a potential relief rally towards the 50% retracement. We
nearly kissed it yesterday. We
came about 12 cents away, which really raised a little bit of a caution flag that we took out the previous day’s highs, we’re right near the 50% retracement, and then finished near the lows of the day. And we talked about support in this morning’s report, coming in at 179 35 to 180 50. And we noted, if this support pocket gives way, we could see selling momentum pick back up in a more meaningful way, with the next downside objective coming in from 176 35 to 177, 22 which is really right where the market got to. So again, these these morning reports, they aren’t the Bible by any means, but it’s a good way for us to put our thoughts on paper and at least have some price objectives out there and downside targets or upside targets to kind of keep an eye on. So you’re not reactive. You have a plan in place ahead of time. So where does that leave us going into next week’s trade? Can we get a little bit of relief from here? Do we continue to make new lows for the move to be determined, I
don’t have the magic eight ball. My
concern is that we have seen the shift take place, and we’re going to continue to see the path of
least resistance be lower. That
doesn’t mean there aren’t going to be tradable opportunities to the upside, but we’ve been in the camp that rallies are meant to be sold for a while now, and continue to believe that. My concern is that we break and close below these lows and we go retest these lows from back in April for October. That might be a little bit of a stretch. Those lows come in near 171 but in those deferred contracts, they think you’re going to want to be a little bit more proactive again, especially if you’re looking at it from a hedger standpoint. And really, the same can be said with the feeder cattle market. And if you want to, you know, reach out to us and talk about different ways to play for the downside or protect the downside. Feel free to reach out. We’ve got a great team on hand that is ready, willing and able to help, whether that be with the future side, or options, or a combination of futures and options to help mitigate some risk. And again, my concern is that we saw what we saw last at the end of last year, where we just continued to make a series of lower highs and lower lows with intermittent relief rallies. There’s the fundamental landscape really changed much. It hasn’t as of yet, but it seems like the futures market is trying to price something in. There’s a lot of headline risk still lingering out there from everything that’s going on overseas to the economy to the election, etc, etc, and I think that’s going to continue to at least limit the upside potential in some of these markets. So that’s what we’re looking at going into next week straight. Again. If you have any questions, feel free to reach out and do not forget to head over to Blue Line futures com and get signed up for the crop tour updates in your free koozie. So that’s all I got for today. Next time you see me, I’ll probably be in a corn field. I’ll be sending out video updates as well as written updates. So again, get yourself signed up. Remember, trading futures and options involves substantial risk of loss, and it’s not suitable for all investors. Hi. 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.