Shootin’ The Bull

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

“Shootin’ The Bull” is a market commentary written end-of-day, recapping the days market activity. The Mid-Day Cattle Comment is a market commentary written during trading hours, providing subscribers with pertinent, real time information to help readers make a more informed trading decision. In today’s volatile trading environment, access to real time information is perceived advantageous in an ever changing market. Our Mid-Day Cattle Comment has a free 60 day trial, then $150 annually. This service is free for active clients and comes with the added benefit of having a broker just a phone call away to answer your questions. (Click either link above to subscribe.)

“Shootin’ The Bull”

Commodity Market Comments

by Christopher B. Swift

January 17, 2017

Live Cattle:

Further evidence of the subtle changes came today.  The ice storm wasn’t as damning to cattle as anticipated.  In the recent past, this would have been anticipated to have produced a near limit down day.  However, due to the subtle changes, not only were cattle not lower, but they closed higher.  Of the most interest today came from the creation of a “Morning Star” candlestick chart pattern.  From Wednesday to Thursday of last week, prices gapped lower, traded Thursday and Friday before gapping up today.  This left air between Thursday and Friday’s trade.  This leads me to anticipate further upside movement.  To what extent, I do not know yet.  A move to $122.00 February is anticipated as the most likely place considering Fibonacci extensions.  With the markets having provided the price rally, and time to execute trades, there shouldn’t be too much “woe is me” this spring.  Using the options will keep expenditures low and protection adequate until we wait for further information to decipher.

Feeder Cattle:

Only $.13 from a new high close in the March contract.  Even more evidence of the subtle changes is the strength found in the feeders.  Recall that previously, most comments on strength were cash and front month fat cattle futures led, that pulled the feeders higher.  Today, the feeders appear to be standing on their own four legs.  Recent sales have been noted as exceptionally good.  The ability of the feeder cattle index to sustain its gains lends credence to that.  Missing from the feeder market is clearly volume and an increase in open interest.   I continue to anticipate that when, or if, the fat market begins to lose some steam, the feeder market will fall faster and further than the fats.  However, I continue to not anticipate a new contract low.

Corn:

The flicker of light at the end of the tunnel grew a little brighter today.  I was struck by how quickly memories of the ’03 – ’07 time frame came back to me.  The US dollar was falling like a rock and commodity prices were moving in tandem with one another.  With all but one or two being the exception, commodities and currencies were higher while the US dollar and equities were lower. Corn, wheat and beans were all higher today.  Corn was able to set a new high on the weekly continuation chart.  This, coupled with the break out on the daily chart leads me to anticipate some continual firming in the corn.  Wheat is moving higher as well, but beans and meal are the stellar performers today.  Both set new high above their respective end of November highs.  Technical indicators are pointed due north and I anticipate the up trend to have resumed in beans and bean meal.


Crude:

Crude continues to hover at the upper end of the trading range.  I anticipate crude to break out of the trading range to the upside and move towards the $60.00 area soon.

Bonds:

Bonds remain forming a correction.

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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:
  1. Help determine the level of coverage and type of insurance plan by:
  • 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:
  1. Catastrophic insurance
  2. Yield Protection
  3. Revenue Protection
  4. Revenue Protection Harvest Price Exclusion
  5. Group Risk Protection Plan
  6. Hail & Fire Insurance
  7. Livestock Risk Protection
  8. Livestock Gross Margin
  9. Pasture Range and Forage
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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