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

August 21, 2018

Live Cattle:

It has come to my attention that the Mid Day Cattle Comment sign up sheet has been malfunctioning.  I sincerely apologize to those who have attempted to sign up the past several days.  Please note that this issue is being worked on and if you have not received the MDCC since you signed up, call me and we will do so manually.  Thank you, Chris Swift

I’ve tried to find a better word for today’s action than lethargic, but it appears to be the proper one.  Nothing happened today.  With no movement such as today, it is no wonder participants are leaving in droves.  I anticipate cattle prices to drift lower.  There is nothing bullish, and having seen the excellent movement in boxes and at higher prices, with no firmer fat prices, there still isn’t anything bullish.  I think the cattle market is fixing to go into a time frame in which marketing inventory will be on the forefront of everyone’s mind.  Not, will there be a rally to hold on for, or anything changing much economically to suggest a rampant increase in demand or draw down in supply.  I’ve seen the guesses for the on feed report.  Still elevated above last year.  The tail end of the expansion is lingering.  It may continue to do so for another month or so.  At least until we begin to see lower numbers placed.  That may be here in August, but most won’t know that until closer to the end of September.  At this time, the need to sell appears greater than the need to buy.  I say that due to knowing of the increased box movement and price and still no higher fat cattle prices.  The need to sell is greater than the need to buy.

Feeder Cattle:

Traders couldn’t even map out a dollar range today.  If there is any clue that nothing is transpiring, this would be it.  I continue to anticipate a lower feeder cattle trade as yards have 5% more on feed than last year, apparently abundant offerings of inventory, and seemingly feeding them longer as shown on the Daily Livestock Review today.  So, there appears to be good demand, but not enough to go “bid” for inventory.

Corn:

Bears appear to be making the most of the wave 2 corrections in corn and wheat.  I continue to believe that is what is transpiring in the corn and wheat and have seen nothing to change my analysis.


Crude:

Energies were firmer today, but not enough to warrant writing home about.  The US dollar index is beginning to reverse.  Maybe this will cause some changes in price movement as the combination of a strong US dollar and high tariff rates seems to be stifling exports.  I would watch this closely to see if it unfolds as anticipated.  Were the US dollar index to close under $.9518, it would lead me to believe the US dollar is in for some selling pressure.

US Treasury Bonds:

Bond traders pushed prices away from the top end of the 146’00 level.  I’m not sure this is the top.  I still anticipate an attempt at the 146’00 area.  From the most recent trading, this is not far away.  Were you to be using this information to help secure refinancing at a lower rate, I would begin the discussions today.

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FutureSource:

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Closing Comment:

 

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.

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