Shootin’ The Bull

Offering technical & mechanical analysis of the commodity market, for the improvement of risk management.

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“Shootin’ The Bull”

Commodity Market Comments

by Christopher B. Swift

April 24, 2017

Live Cattle:

All in all, traders took the increase in placements very well it appears.  In my opinion, as long as the numbers don’t overwhelm packing capacity, I don’t anticipate an increase in weights or the numbers to drag cash prices down to the levels currently reflected in the back month futures contracts.  With the  report having no bearing on the June, the process of aggregating the basis continues.  Although the correction is very minor, it may be all that is going to transpire for the time being.  The Moore research suggested buying the June and December live cattle, as well as the spread recommended last week of buying the February ’18 and selling the August ’17.  Not much has transpired on the daily chart to provide any direction.  The hourly chart though shows the oscillator having returned to the zero line, but no overlapping of price just yet with the previous high.  A trade above $115.80 June will lead me to perceive the correction complete.  At the end of this week, the June will have some ground to cover, or will have to sit uncomfortably and wait for cash to drop.  A $17.00 decline in cash in 9 weeks is clearly possible.  Whether probable or not is the question.  At this time, with the grilling season just now starting, I anticipate it to be difficult to send cash prices reeling.

Feeder Cattle:

The hourly chart on the August feeder cattle shows 2 price peaks and 2 oscillator peaks.  This leads me to perceive that wave 1 – 3 are complete and wave 4 in progress.  Upon completion of the wave 4, a minor wave 5 rally is anticipated with an upside target measuring to north of $153.00.  Were the 5th wave to materialize as anticipated, it will be the target desired to reduce exposure for the remainder of the summer marketing’s.  If one wanted to get started on fall production, I would consider that as well.  Recall that this is perceived as going to be the top of a primary wave 3 rally were the $153.00 target realized.  Hence, although a primary wave 5 will be anticipated as well, the primary wave 4 is anticipated to be significant in both time and price.  So, start working on what sales will be made this fall and we’ll see how close traders move price towards target and go from there.  A trade above $142.40 August will lead me to anticipate the wave 4 nearing completion.

Corn:

Seemingly the excessive rain and a weaker US dollar was just enough to keep grains, except wheat, from settling lower again today.


Crude:

Energies didn’t appreciate like other markets did overnight.  It is a weak market, but I am not sure it is going to stay weak for much longer.  The weekly chart shows the price movement as having an upward bias to it and with the length of time crude has traded in this area, it is perceived time for a move out of here.  My analysis suggests this move will be to the upside.

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FutureSource:

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Being a commodity broker introduces me to all aspects of agricultural production.  Crop insurance is one of those aspects and it has been a pleasure watching my son excel in this field.  Although Swift Trading Company is not associated with C & H Insurance, I have no reservation recommending Will’s expertise and the services he provides.
C & H Insurance Commitment
With the recent changes made in crop insurance programs, C&H Insurance is even more determined to provide outstanding service to its clients.  Keeping abreast of the ever changing and challenging agricultural environment, we attempt to expose risk and capitalize on opportunities.  The personal services provided by Will Swift at C & H Insurance are listed below:
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  • Analyzing your current financial situation and taking current breakeven goals into consideration
  • Analyzing your current marketing plan. This includes, your current positions, future sale goals, and how potential market changes will affect your marketing plan.  Then we make the extra effort to make sure the insurance plan you choose now will still be the right choice at harvest.
  • Analyzing land locations to determine what the best unit structure would be for that current year and where your greatest risk lies.
  1. Mapping of your planted acres and record keeping in book form.
Products offered to C&H clients include:
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To discuss your crop insurance options for the upcoming season, please contact Will Swift at 573-472-9948 or email William@cropNhail.com .
I look forward to earning your business.
Will Swift

Futures trading is not for everyone. The risk of loss in trading futures can be substantial; therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Past performance is not indicative of future results, and there is no assurance that your trading experience will be similar to the past performance.

Commodities Brokerage, Commodity Market Analysis, Hedging, Price Risk Management

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