MARKET UPDATE - GRAINS, MEATS, SOFTS

MARKET UPDATE
JUDY CRAWFORD
TRADES FOR FRIDAY, JUNE 16, 2017
888-301-8120
jcrawford@zaner.com

EMOTION is your enemy more than any market will ever be.

PLEASE NOTE: I will be out of the office next Monday and Tuesday. Back to the Cleveland Clinic. Rick Alexander will be covering for me. My phone will be transferred over to him. All orders need to be called in.

BEAN OIL TO TAKE OUT THE DECEMBER HIGH? The monthly chart for bean oil is the most telling. Having been in a relentless bear market since early 2011, it appears it finally had enough in mid-2015. That adds up to over a four year bear. That low in 2015 was never revisited. Instead it established an uptrend. It now has two major rallies under its belt but has been selling off since last December. Does that mean the bear market has resumed? Not quite according to its monthly chart. That selloff appears to be nothing more than a correction to the second rally. In fact the extent of the selloff matched the selloff to the first rally. Now for the last three months it has been consolidating around 32.00 (basis the October contract). Finally this month it is forming a reversal bottom for the first time. So is it setting up for a third rally? It appears so as the other charts confirm what the monthly chart is suggesting. The weekly chart formed a reversal bottom last week. Technically that suggests a trend change from down to up. On that chart it has rallied back over its 100 avg. that it had failed earlier this year. Its weekly chart is also triggering a buy this week. The one hurtle now is its 20 avg. on that chart. It stopped the May rally attempt but with supporting evidence not there in May, the likelihood of finally getting over that hurtle has now increased. And the daily chart is helping out too. The selloff that bottomed June 5, was with a reversal bottom for the first time. All these factors continue to support the potential for another major rally in the bean oil.

GRAINS: They continue to suggest they are setting up for strong rallies triggered by the weather at this point. I have yet to figure out where the USDA comes up with its figures when I repeatedly hear otherwise from farmers. And too often I have heard farmers say that the USDA never came to their area. I think I have finally figured it out. When the USDA sits down to do their survey and if it includes physically visiting certain areas, I strongly suspect that decision is determined by whether that area has a good restaurant or not. I can just hear them deciding their tour route. “Hey, Jim, let’s go through this section of Ohio this time. You remember that great steak super club in Clear Lake?”"Ya, that's a good idea. But if we go closer to Dubuque, we could swing across to East Dubuque and go to the Woodfire Grille." "Ya, Bob, you're right. Let's go to that area instead."

MEATS: I suggested a potential rally in the beef but it was a struggle today. Feeders did better than the live. A rally should be a shorting opportunity.



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GOAL OF THE MARKET UPDATE: To understand market behavior while saving time in the process. Everyone is busy and having the technical analysis done for you is helpful plus it is presented in a way that is educational too. What I convey to readers is not a personal opinion but what the markets are suggesting by their technical formations and action.

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TRADE SUGGESTIONS: All trades suggested are for the day session only. I do not enter trades for the night session.

Buy September OJ. Buy 139.90 stop. Protective stop 133.80. Potential projection 150.00. (Potential risk $915. Potential reward $1515). Margin: $1750.
Reasons for the Trade:
1. The monthly chart is forming a reversal bottom, suggesting a trend change from down to up.
2. On the monthly chart the reversal bottom is being formed at the 130.00 long term support level.
3. On the weekly chart OJ filled the gap down at 129.75 and held, that is constructive.
4. The daily chart has a reversal bottom, suggesting a trend change from down to up.
5. On the daily chart OJ has been trading over both the 10 & 20 avg. for five trading days. Selloffs continue to hold at that support.
6. The daily chart has a previous buy signal that is still intact.
7. Today was an outside day that can trigger a signal and market direction.

Buy September cocoa. Buy 21.15 stop. Protective stop 20.45. Potential projection 22.35. (Potential risk $700. Potential reward $1200). Margin: $1595.
Reasons for the Trade:
1. The monthly chart is triggering a preliminary buy this month.
2. The weekly chart is triggering a preliminary buy this week.
3. On the weekly chart cocoa has rallied over both the 10 & 20 avg. That is constructive and suggests an attempt at a trend change from down to up.
4. On the daily chart cocoa has been in an uptrend since the April 20 low.
5. On the daily chart cocoa rallied over the 10, 20 & 100 avg. and has held that gain since last Friday.
6. On the daily chart the macd is in positive territory.

CHANGE IN OPEN STOPS:
Short August cattle from 125.75 down to 124.25.


GRAINS:

JUL CORN: I had raised the stop to 389 on Monday for those who had bot the December contract earlier. That stop was reached this morning. Corn then immediately rallied. Since the other grains were holding and starting to rally it was apparent the selloff in corn was to entertain stops only. I bought back at 391 making the stop out a day trade for those in the December contract. I have rarely done that but did in this instance. For the Update I have shown the earlier buy in the July contract only. I neglected to include the December buy in Monday’s Update. I exited the July today and am now showing the December position entered July 7.
Position: Long 391 (6.15). Exit 389 (6.15). Loss $155 (including costs).
Position: Long (Dec.) 402 1/2 (6.7).
Position: Long (July) 375 (5.22). Exit 378 (6.15). Profit $95 (including costs).

DEC WHEAT: Wheat took off today and cleared its 100 avg. on its daily chart again. It is over every resistance on its weekly chart. Keep stops at 459. Closed 490 1/2, up 11 1/2.
Position: Long 470 (5.6).
Projection: 500.

NOV BEANS: They are holding long term support. On their daily their recent rally tested the breakout to the downside from that previous consolidation. They then started to sell off again. But that changed today. They rallied and closed right back over both their 10 & 20 avg. on that chart. Plus the 10 avg. is crossing over the 20 avg. – suggesting a rally attempt. This action is making me suspect that beans are going to rally and negate the breakout to the downside. Watching closely. Closed 944, up 5.0.

OCT MEAL: It doesn’t look as technically constructive as beans do. It resumed selling after testing its breakout from its consolidation but has not recovered like beans have. But it may not matter. If bean oil is starting a new rally, beans may follow the oil instead. Closed 304.70, down 1.20.

OCT BEAN OIL: It triggered a buy today and rallied up to its 100 avg. on its daily chart before stopping. It may back off but long term doesn’t have any resistances until higher up. That will make it easier to get over that 100 avg. on its daily chart. The last time it reached that average on its daily chart it not only had that to deal with but its 10 avg. on its monthly chart that intersected at the same level. Too much resistance all at once. Keeps stops at 31.29. Closed 33.05, up .66.
Position: Long 32.68 (6.15).
Projection: 40.00.


MEATS:

JUL HOGS: This market is enough to drive you to drink! What looks great one day, looks like disaster the next. Its constant flip, flopping back and forth is confusing. What does remain constant is that the 83.50 level was resistance again today and stopped the market. Looking at the market as a whole, it continues to suggest a potential top. But to trade it or position in it would be a nightmare. Just watching. Closed 82.05, down .52.

AUG CATTLE: Their low on May 16 was 116.77. Today’s low 116.97. It is attempting to hold but they are now under their 100 avg. on their monthly chart. That average comes in at 117.95 approximately and that is resistance. Plus 118.00 is long term market resistance on that chart too. And they have now failed the 10 avg. on their weekly chart. That is negative and usually suggests an attempt to head lower to the 20 avg. That comes in down at 111.57. But before that is its 100 avg. that comes in around 114.80. Bottom line the technical picture keeps deteriorating. Lower stops from 125.75 down to 124.25. Closed 117.50, down .37.
Position: Short 123.82 (6.7).
Projection: 118.00.

AUG FEEDERS: Unlike cattle, they formed a reversal bottom today on their daily chart. That suggests they may try for a rally. If they do, they will reach resistance at 150.95 on their monthly chart. That is where their 100 avg. intersects that they failed this month. On their weekly chart they are now trading under both their 10 and 100 avg. They haven’t closed the week under them though. As you know when a market fails its 10 avg. after an extended rally, it usually means it is headed for the 20 avg. that is lower. That intersects down at 139.00. Rally or not, their technical picture has deteriorated too. A rally probably would be a shorting opportunity, assuming they gave a decent setup that doesn’t require that you risk your “first born” on the trade. That has been the problem with shorting this market. Closed 174.07, up 95.

SOFTS:

DEC COTTON: Switching to December. Last time I pointed out the negative developments in cotton that suggested lower prices. Supports mentioned last time have been violated. December cotton was holding around 72.40. On Tuesday it failed and it has been relentless since. Its low today 69.03. On its weekly chart it reached the 200 avg. today and is trying to hold. It may try for a minor rally. Long term December cotton will reach support down at 67.00. Just watching. Closed 69.47, down 1.48.

SEPT ORANGE JUICE: It is trying to form a reversal bottom on its monthly chart. It did so in April but it was immediately negated. This one may hold because it finally filled a lower gap on its weekly chart down at 129.75 this time. It has shown strength since then, suggesting this last selloff was to fill that gap and nothing more. Also on its daily chart it has been trading above both the 10 & 20 avg. for over a week. During the failure of that previous reversal bottom, OJ was trading under both of those averages most of the month. A trade could be developing. See Trade Alert for details. Closed 139.75, up 1.70.

SEPT COFFEE: After a new low yesterday of only 10 ticks, it is trying to hold again at 128.00. Nothing new here. Any rally continues to be held down by its 10 avg. on its daily chart. And it keeps fooling around over and under its 200 avg. on its monthly chart. I pointed out before that coffee likes to end a bear move once it has not only reached this average but has traded under it for several months. At least that has been the pattern during the last two major bottoms. So far it is doing the same so the low may still not be in place. Just watching. Closed 128.05, up .30.

SEPT COCOA: I tried to buy it today. The price was not reached. I’ll try again tomorrow. See Trade Alert for details. Closed 20.69, down .06.

OCT SUGAR: Last time it was struggling at its 200 avg. on its monthly chart and giving a buy on its weekly chart. Well, that preliminary buy on the weekly chart was quickly negated. It has now failed that 200 avg. on its monthly chart and appears headed for 13.00 support on that chart. Just watching. Closed 13.68, down .17.


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Past performance is not indicative of future results. All suggested trades are based on technical signals/indicators and do not include slippage or cost. Not all trades suggested are taken. Results are based on what the signal indicates not necessarily an actual trade. Actual results may vary.

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