Ira Epstein reviews the days trading in the agriculture markets
The Dale I raps Tina blendin associates with your agricultural wrap-up and this is for Wednesday and we’re now at the 9th of October 2019. Just after 4:15 in the afternoon that’s p.m. Central Daylight Time.
In the grain market we’re all getting ready now for the USDA report the supply demand that’s going to give us some final acreage numbers some new updates on yield. And you know I never believed in this report you get your final final acreage. I think November’s a better report for that. But as you can see you got a mixed bag with the beans up a little bit the wheat unchanged in the corn down a penny and a half.
In the energy markets a very mixed bag we already see that seven people have died in Syria as the Turks are moving over the line. They’re doing what they said they would do. We’ll see what the president says about that. I just saw a news conference.
And in terms of agriculture, just so you’ll know he said he’s still looking at a deal. That there’s got to be the right deal for the US and no he doesn’t believe that on this deal the US and China are 50/50 said they’d. Taken advantage of the US for so long that this deals got to be more balanced more balanced. Cannot be you’re just going to do 10 million extra tons of soybeans and make a trade deal. If that’s it I am lost as to what this whole fight has been about and why we’ve been going through this the whole time. You still haven’t addressed those other key issues and that my point is not politics. I want to make that clear; my point is as a grain trader. I’m looking and saying to myself will that do the job now.
We had an office meeting today about soy beans who they were saying. Let’s assume that they do that deal it’s about 337 million metric it’s about 337 million bushels of soybeans. That’s what it was. And as we looked at that we are all going okay that’s a big part of the carryover. The problem is what China takes on one side. You’re not gonna get European or other business on the other. Maybe net its a hundred million bushels is what the office was saying. Okay, so I’m looking at the market. You see how the chart has been coming up and we’ve certainly into and cleared this resistance area but we haven’t gone anywhere. You you’re next up leg is really back here for resistance and I can argue let me step back over here. That the 960 level if you come across the chart 940 960 this break that you had here might be an area the market has some resistance at. In terms of the support its back at the 18 week moving average and that comes in now at 882 and ¾. When we go to a daily by our chart and what I’m doing now is shifting the chart up so you’re not getting these low prices back here. Well, as you can see the markets cleared a lot of areas if I turn to the side here. We’re back into this resistance zone. There’s a difference on the weekly and daily charts. So we’re back into a key resistance area of going into this report.
And going into the Chinese trade deal you’ve got two elements here that’s going to make it hard to grab control of this market.
The swing line is still got a pattern of higher lows higher highs. Bullish the market is over. The 18 day average of closes it is finding support at the 200-day moving average on brakes. So where’s the resistance? Well, when I put on the Bollinger Bands you hit it today that number came in at 928 and 3/4 you got as high as 931 and a half and by day’s end you had backed off to 923 and ¾. So I do think the pros took money off the table again as the market hit the Bollinger Band hit it back here backed off and again. It has done that.
What about momentum?
As I told you we have an embedded reading, until the red number closes back under 80 on pull backs maybe tomorrow – I expect to see the buy support now,
why do I say maybe? Tomorrow – instead of normally me saying with an embedded reading, I look for the pros to be there. That’s because two elements can happen certainly we’re going to know at 11:00 in the morning what the government report is saying on supply yields acreage and so on and that gets digested that step1
Step2 is obviously the US Chinese trade talks. We know what the Chinese want to do is that enough for our president. That’s really the key. So that’s going to tell us how this market reacts. You’ve gotten up to the first challenge of the hundred day average and I’m gonna pull back to yesterday cuz I know we talked about this. The upper Bollinger Band the hundred day average that was what I was looking for for the first resistance in the meal market. You can see the market got up there got to 309 70 on the close so it’s under the Bollinger Band but over the hundred day average. got it? So not a bad action as I’m seeing the market.
Soybean oil flip flopped. We had talked that in bull markets when they’re real and they’re gonna hold up normally. It doesn’t mean it’s all the time but normally meal leads the soy complex and you’ve had that if you look at the meal another gain today of 280. But look at the soybean oil it’s been backing off. So the soy oil is the one you’ve got to keep an eye on. If being start breaking tomorrow when surprised me if soy oil gets a bit. If beans get something real bullish out of all this watch out this market could follow, but it’ll be the laggard as my guess.
In the corn market back up to new highs for this move. Now that’s important too. And the market is now trying to really get an idea as to what’s going on from three elements? From for this you know, I should have also brought in the weather elements into all of this. Because we are seeing that the first really hard freeze is going to hit the Dakotas big snow they’re talking there by the way South Bay and North Dakota Minnesota and then coming down into parts of Northern Iowa and so on for the freeze factors this could be I’m not a weatherman. Because we’ve seen so much fail on these hurricanes and so on. But this could be the official end and it’s not out of sync right where we’re at at the at this point knocked over of the growing season many of the corn and soybean areas. The question will be of course how much snow you get in the Dakotas in Minnesota? How do you get to the crops if they get a tremendous amount of snow on them? We’ll see what happens they. And when I say tremendous I read a report for a record amount of snow at this time of the year in the Dakotas so we’ll find out what goes on there.
When we look at the wheat market you’ve got higher and lows higher highs. You came right into the resistance zone today of and you did it yesterday he went to the yesterday the upper Bollinger Band today you said hello hundred day average of closes and the market ran out of momentum there. Again flip a coin, everything tomorrow is going to be those three elements that I told you as to what the market does.
Sugars not impacted with that. Sugar is now three days in a row fighting at the 18 day average of closes it peaked out at the combination of the upper Bollinger Band and hundred-day average it has not been in a downtrend with today’s close it entered that why did it enter it? Well, because you closed under the 18 day of it so the bias is down the swing line is down momentum is down. Until this market takes out 12 59 it’s only 18 points away but until it takes it out you’re still pointing to the downside. Take that out and then the question is did you first take out it 1231 or you just turn from there and go back up? Believe it or not if you want back up here without taking out 1231 you could turn the trend back and say you got higher lows higher highs. Gonna be an interesting day tomorrow.
In the coffee market you’re still accelerating to the downside. So people that thought a low was in place here we are back into this area on the chart. You had bounced as you know from here all the way up and this is the first sizable correction back into there.
Now the cocoa market. I read an interesting article that you have to understand what’s going on. There’s a cocoa fund that we had talked about back in July and the farmers have now gotten together. I think I believe it’s in Africa and what they’re saying is okay we’re gonna price cocoa in a certain way money. A certain amount has to go to the farm community a certain amount of prices go higher going to a fund for them. But the hedgers don’t know how to price that in because unless they’re willing to pay this price which initially drags up other prices with it. Just the way that it’s going to go if you don’t get your Coco from a key area. You see it coming here now. In New York where the ice has and that’s odd the IntercontinentalExchange has some warehouses for cocoa they are pulling forward and drawing out a lot of cocoa ahead of time. Because people don’t want to deal with this yet .They’re gonna have to because as those supplies drop now you come here. Now if cocoa prices were to stay up and this I guess is part of what this rally was in reading that article. Well, then you’re gonna get more cocoa production remember high prices baguettes what you’re gonna get those prices and low prices you get rid of supply, so we’ll see what happens here. But at least they have a better understanding of what some think is going on.
In the cotton market going into the report you neutralized this market you now have a higher high with a lower and low in sideways action going into the USDA report, so we’re gonna find out what people think we’re going to find out where harvest starts coming in there’s a lot of numbers that we’re going to be seeing over the next two three weeks and especially in cotton crops.
In the cattle market you’re continuing with the uptrend. As I said I expect as long as you have an embedded reading that on the pull backs the market stays bullish and finds buying support. Now what it did is it took out the past couple of days go at least until got yesterday’s low. As we see yesterday’s long to market was one on one 11 22 and a half the day before 110 90. today’s low turned out to be 110 45 and then the market went up. What’s the number you don’t want to see taken out tomorrow? I don’t want to see today’s loaves taken out. It probably means you get more of a break into support maybe at the hundred day average of closes would be a target. The embedded reading still rules the day though. So until that’s gone even though if you take that out I’d get very worried as a Chartist. That momentum indicator is the number one part of the hierarchy.
In the feeder cattle, you got up today to 140 145 50 and a half. so the Bollinger tops 145 60. I think its close enough. I wouldn’t be surprised if pros took some money off the table there. Now I know our firm I’m talking linen associates they’re quite bullish on these markets they they think kettles an important road where these feeder cattle especially some further out are still having good value in the hog market. No surprise here to see the market go further up now yesterday if you look at the market you’re up 300 points the day before you had been down 300 up 315. So today was important. What we talked about is first resistance the 18 day average which the market was respecting next resistance point the 100 day average and you can see you’re making a run for that.
Now if you can can continue and again I don’t know what’s going to come out of China in the US. We know they need pork. By the way Smithfield, which is the largest pork producer in the world I don’t know if you’re aware of that. They’re saying that 2020 is going to be one of these year worth bacon everything gonna be in short supply us they’re gonna do their best to keep us well supplied. But China’s gonna be taking a lot of the product. China hones wh group out of Hong Kong own Smithfield. So if you buy their products just understand. it nothing wrong with that a great company. Resistance here next resistance 70 to 57
So that’s where I’m gonna leave you today. No offerings or anything else let’s just leave it at that and I’ll see you all tomorrow.
This news has been published in Ira Epstein YouTube channel without modifications to the text. Only the headline has been changed.