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MARKET UPDATE - GRAINS, MEATS, SOFTS


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TRADE ALERT
JUDY CRAWFORD
TRADES FOR MONDAY, JUNE 10, 2019
888-301-8120
jcrawford@zaner.com



FOX IN THE HEN HOUSE. I mentioned the other day the Grain Report coming out this Tuesday and the potential that the crop production portion could be changed for the first time since 1993 when rain was an issue as it is this year. That 1993 report triggered a turnaround and rally. In 1993 a wet spring in Iowa caused a 69% drop in corn yield. This time around we hear farmers are already concerned about the yellow color of corn that is emerging.

But it doesnt end there. From what I hear there is a lot acreage that hasnt even been planted yet. As for corn, the preventive planting program needs to be taken into account too. As one client told me, it costs him $250 an acre to plant corn. The program offers him $285 an acre not to plant. Plus there is no risk then. It doesnt take a rocket scientist to figure out what his decision was. So you have to ask how many other farmers are thinking the same? And what additional impact will this have? Another client told me his neighbor has 8,000 acres and hasnt been able to plant anything yet. My point being, has this evolved into and already a much more serious situation than what we think?

So what do grains do? Sell off. Why? All we hear about in the news is the trade deal with China to the point of over kill. The planting issue has been mentioned but not a focus of topic or its possible severity by the media. But what I hear from farmers is that its much more serious than what the news displays to date. Is the media so wrapped up in the trade deal that the planting issue is being interpreted as not a serious concern? I dont know but it is a question that should be asked. We all know how the media can impact the public. Either way, I take more valid the comments from those with their boots on the ground (the farmers) then a news media whose obsession with China is so great it cant seem to see what is right under their nose: that the fox (rain) is already in the hen house (fields). And according to the farmers that fox is having a field day as the saying goes. No pun intended.

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GOAL OF THE MARKET UPDATE: To give traders a technical explanation of market behavior with the goal to educate and better understand and trade the markets. 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 FOR MONDAY:

Buy July wheat. Buy 514 1/2 stop. Protective stop 501. Potential projection 550. (Potential risk $675. Potential reward $1775). Margin: $1450.
Reasons for the Trade:
1. The monthly chart has a reversal bottom.
2. The monthly chart is triggering a buy this month.
3. The weekly chart has a reversal bottom.
4. The weekly chart has a buy signal.
5. On both long term charts wheat is sitting on support.
6. The daily chart has a reversal bottom.
7. On the daily chart selloffs continue to hold the 490 support on a closing basis.
8. On the daily chart wheat closed back over the 100 avg. today.
9. Friday was an inside day that can trigger a signal and market direction.

GRAINS:

Jul corn it closed under its 10 avg. on Friday but Thursdays reversal bottom is still intact. July wheat I tried to buy it on Friday. The price was not reached. Ill try again on Monday. See Trade Alert for details. July beans they sold off and held at their 38.2% retracement on their daily chart. Not much market support there though. After that the next decent market support is at 845. July meal it sold off to its 100 avg. on Friday that is also a 38.2% retracement too. It is also sitting in market support. July bean oil it triggered another buy on Friday from Thursdays inside day but then sold off. Its holding on support. Keep stops at 26.78.

MEATS:

Jul hogs They failed to hold their 200 avg. on Friday. Stops were reached and they closed down limit. They also triggered a sell on their daily chart from Thursdays outside day. At 83.00 theyll start pushing into extensive market support down to 82.00. August feeders on Friday they triggered a sell from Thursdays outside day. It is now a question of whether they will take out their recent low as hogs have. But hogs didnt have the long term support that feeders are currently sitting on. August live cattle they triggered a sell on Friday from Thursdays inside day. The same issue faces them regarding the earlier low. They still suggest 100.00 on their monthly chart.

SOFTS:

JULY OJ very narrow range on Friday. It needs to close over 108.00 to get going. July cocoa it took out the high of the previous rally high suggesting another wave up instead of further selloff as I suggested in Thursdays Update. If it can follow through it could reach 25.60. July cotton it continued the selloff on Friday but has extensive long term market support at 65.00. July coffee Thursdays inside day triggered a buy on Friday without much follow through. I had mentioned that its macds value line had crossed under the average line a negative development indicating sell mode. That may be holding back a buy attempt at this level? July sugar as of Friday still working on the 12.50 resistance.


CURRENT POSITIONS:

Long July bean oil. Long 27.37 (5.28). Stop 26.78. Projection 28.80.
Exit July hogs. Long 86.05 (6.5). Exit 84.20 (6.7). Loss $795 (including costs).
Long July mini crude. Long 53.400 (6.7). Stop 51.15. Projection 57.00.

Trading commodity futures and options involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources. Opinions are subject to change at any time and are a solicitation or recommendation to buy or sell futures contracts or options on futures contracts. The information contained in this message has been obtained from sources believed to be reliable but is not guaranteed as to its accuracy or completeness. All known news and events have already been factored into the price of the underlying commodities discussed.

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. These recommendations are not a solicitation for entering into derivatives transactions. All known news and events have already been factored into the price of the underlying derivatives discussed. From time to time persons affiliated with Zaner, or its associated companies, may have positions in recommended and other derivatives.



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Trading is not easy. The two major comments I hear from traders is the lack of basic information from their broker to help them trade and that their broker does not spend enough time with them. In my thirty years of working with traders, I have seen all the common patterns that lead to trading failure. So my goal is to help my clients understand what they are doing, give them the information they need and the time they require. Even experienced traders need this. My strongest asset to you is my willingness to help and my experience.

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Toll Free Number:  888-301-8120; 312-277-0133.  jcrawford@zaner.com

BACKGROUND ... Thirty years experience as a commodity broker has given me an insight into the needs of traders that only comes with experience. Originally from Minnesota, I started my career as a stockbroker in New York but moved to Chicago, the center for the commodity industry. I have found that no matter where a client lives in the world, all traders have the same needs.

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