MARKET UPDATE - GRAINS, MEATS, SOFTS

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


BEEF FINALLY AT A BOTTOM? There is no need to elaborate on the selloff both live and feeders have endured since the April high. They both tried to bottom in May only to fail to new lows on their daily charts. At the end of May, both feeders & live attempted to bottom again but failed to finally find another bottom a month later at the end of June. Then everything started to change technically.

During the entire selloff repeated attempts to rally over both the 10 & 20 avg. failed again and again on their daily charts. But finally, at the end of June, that all changed and feeders and live not only closed over them for the first time but have held that gain since. Keep in mind that any market needs to be above those averages in order to start an uptrend. They need to be under them in order to start a downtrend.

With an entirely different picture evolving on the daily chart, the monthly chart was showing support for this change too. Both live and feeders had reached the 200 avg. on their monthly charts and had held it for two months. That average was a key to the market bottom in 2016 when the major bear move ended for both. And now the weekly has put its two cents worth in too. It formed a reversal bottom in late June for the feeders, a double bottom for the live. Both technical formations signal a trend change from down to up. Since then the weekly has confirmed those bottom formations plus more.

Considering the positive technical developments the major ones outlined above occurring in both live and feeders on all their charts in the same time frame is unusual. Such technical agreement simultaneously, you dont always see, increases the probability that this is a market bottom and a buying opportunity.

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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 WEDNESDAY: None.

GRAINS: They continue to suggest more selling, however, both beans and meal suggested (by todays action) that they may need a near term rally to set up for another wave down on their daily charts. One has to keep in mind that the U.S. & China have resumed trade talks today. So that could change everything overnight. But if the technicals are allowed to follow through more of a correction will occur.

Sept corn it is backing off from the resistance area (441-445) that I referred to. If the recent rally attempt was the setup for another wave down since the June 17 high, the potential for the selloff could bring corn down to a 61.8% retracement that I referred to before. Thats approximately around 400 to 397 and a potential buy area. Sept wheat it took out the previous low made last week. I said yesterday to resume the uptrend wheat needs to get over 528 to 530 with follow through. That is where both the 10 & 20 merge and any uptrend/rally (in any mkt.) requires a structure of the market being above them, not below them as now. Wheat continues to suggest more selling to 490 at least. Aug beans today they recovered back over their 38.2% retracement. They also formed an outside day. If they take out 886 1/4 tomorrow, they will be triggering a near term buy. They have resistance at 890 on both the daily and weekly charts. Just watching. Aug meal it recovered back over its 50.0% retracement. It is now suggesting a near term rally to set up for third wave down to fill the gap. That should then set up a buying opportunity. Aug bean oil it triggered a buy today from yesterdays inside day. Keep stops at 27.60.

MEATS:

Aug hogs yesterdays outside day triggered a sell today and then the market turned around and negated it. Hogs are now testing the 20 avg. above the mkt. again. Since the selloff started in April they have done this more than once with an end result of a turnaround either the same day or the next one and new lows. So if hogs dont do that again this time, this rally attempt could try for 83.00. But on both long term charts hogs are still pushing into resistance. I prefer to watch. Aug feeders they rallied/closed back over their previous 142.00 market support today. Their next market resistance is between 145.00 and 146.00. Keep stops at 137.30. Oct live cattle switching to October since that is the month the buy was in. They broke out over their consolidation today. The high end was around 108.00. They consolidated under that level for over a month. Keep stops at 106.95.

SOFTS:

Sept OJ yesterday it closed over both the 10 & 20 avg. on its daily chart. Today it closed back under the 20 avg. but held the 10 avg. Watching closely. Sept cocoa after its performance yesterday, cocoa sold off today. A further correction could set up a buy. Just watching. Dec cotton even though it was trying to bottom, it was still in a downtrend as of yesterday as was pointed out. Today it broke out to the downside from that bottoming attempt. Long term the next support is 62.00. Sept coffee as of yesterday I said there was some support at 105.00 but technically it may try for 104.00. So far its attempting to hold around 105.00. Watching closely to buy. Oct sugar an inside day yesterday triggered a sell today on its daily chart. It has been consolidating and this sell signal pushed it down to the 12.25 support and held. It then rallied to close back up into the consolidation Just watching.


CURRENT POSITIONS:

Long August bean oil. Long 28.10 (7.9). Protective stop 27.60. Projection 29.25.
Long August feeders.
Long 139.25 (7.8). Protective stop 137.30. Projection 145.00.
Long October live cattle. Long 108.55 (7.9). Protective stop 106.95. Projection 112.00.

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