We’ve seen a bit of ‘backing and filling‘ as they say in the stock market. Prices taking a breather to clear out the froth of the up move. A retracement down to precisely 62%. Pivot points work exceptionally well in the livestock markets, I’ve found. I jumped in today LEN, @ 108.00. My reading of the tea leaves sees a resumption of the climb, expecting new highs with the coming 5/31 to 7/04 holidays pork consumption. Bear in mind the most recent state of the cold storage, that being the lowest in a long time. And we can’t trust the numbers reported from China. (More on that later). The prices responded as expected to the penetration of the upper breakthrough of the Bollinger Band and now perhaps the rise will resume. I will add soon the next level in the 110 area.
I‘ve seen in the past where July goes insanely vertical and this may replicate those moves. How high? Haven’t a clue yet. But if the hot weather settles in and the other markets respond appropriately, Lord only knows what’ll transpire.
Trade on!
Good call Stomper ! I've been long since last November on a few contracts. I was afraid the party was over !
Thanks, bowyer.
I had a resting GTC order for the next level at 110.20 figuring it wouldn’t get filled unless and until the market showed sufficient drive. Well, it took all of two minutes after the open today to get filled, over a hundred points higher. The hogs traded quickljy up to the 2nd resistance point and held. Interestingly, the hogs climbed to the 3rd resistance—118.80 and stopped again. This time it occurred RIGHT AT THE CLOSE. Up almost 300 points on the day. Remarkable. But not unique. Pivot points are like the Oracle of Delphi, giving data out but not telling how to use it. A haven for day traders and scalpers. It’s one of the tools I look at before entering or exiting a trade. I remember back in the 80’s a research firm I was well acquainted with sold the daily numbers to the boys in the pits.
I haven’t done my analysis yet as to what to anticipate, look for and prepare for. I like to use GTC orders. You know—“Plan Your Trade and Trade Your Plan.” Helps to ward off those pesky fear and greed thingies. But as I implied earlier, things seem in place for a return to, and maybe break through the earlier highs. WARNING—Jesse Livermore, I think, opined ”Trade what you SEE, not what you think’s going to happen.”
Fundamentalists look at what IS, technicians look through a rear view mirror. Not to totally discredit their craft because while history doesn’t repeat itself, it often rhymes. Valuable insights can be and are gleaned through their tools. I try to use ‘em both.
Trade on!
p.s. Almost forgot. I’ve got a resting order to buy the next level of CN @ 672.00. Came close today during the irrational exuberance but thankfully didn’t fill. Woulda been uncomfortable watching corn dive to unch later. Part of my thinking was that if the , market got 22 to 24 cents higher it would have the strength to go. It didn’t and it didn’t today. My earlier entry at 6.38 feels real good. Point of fact, I was watching and never saw the market trade my price and was pleasantly surprised to hear the bell informing me of the fill.
Thanks again for the reply and your analysis. I farm and trade a little on the side. I've always been intrigued with trading hogs, maybe because I used to raise them and don't miss them at all! Added a July early this morning
Thanks for the great posting from an active trader in real time!
Keep it up the great work.
Yesterday’s action induced me to add another layer, not the best of prices, but I wanted to have some distance from the earlier contracts. Got in another HEN at 113.75.
Today’s run up to limit, not accompanied by the Q or M, and with the pool fluctuating less than 500, and it being a Friday, discretion took over. I’m out at limit up. Nearly a 10k gain for the week. I’ll take it and sleep well this weekend. HOWEVER—
If the N comes off limit substantially, like a hundred points or more, I will probably put ‘em back on, turning the trade into a nice day trade. I would expect to see some kind of pullback in the first of the week allowing me, one way or another to continue on with the plan. That being to ride the run up.
Trade on!
Congrats stomper!
Thanks for sharing.
I too took profits on one July at limit up. Pretty good wages for one day. I'm not good at getting in and out, so I usually try to just hang on. My most profitable trade is Oct. Not sure how much upside is left. Tempted to cash in.
Friday didn’t give me the opportunity to re-enter but the hundred plus point dip on Monday, as anticipated, did and I did.
I put the first level back on with a limit order at 115.325. Didn’t try to pick a bottom, just wanted to get back in. Wasn’t disappointed that the market closed just about there.
This morning, shortly after the open, added the next level at 117.20.
One thing I neglected to do was to run the numbers after Monday’s close so we‘ll see how this turns out.
The cold storage numbers confirmed my opinion that the summer grilling season is going to put upward pressure on the prices. Typically ribs et.al. are accumulated and frozen for release when the season demand leaps. I mean, who grills butts and ribs in November and January?
Today‘s price action looked healthy, especially at the close. Orderly, not too frenetic. And I don’t like to see a new high at the close. Weak hands, panic buying leading to price instability.
We also have to keep in mind that the rapid price escalation plays hob with the retail pricing structure. The whole supply chain has to be very quick on its feet to deal with big, fast price changes in the underlying goods. This goes for all these consumable ag products.
A lot of ‘ifs’ coming that can trigger negative responses. If the stock/bond markets swoon, oil prices spike, crypto’s tank, COVID re-emerging and on and on, may have a negative impact on the meat prices.
I‘ll keep an eye on the picture and will keep you apprised.
Trade on!
Thanks much stomper!
What happened to your recent long BO/corn trades?
mike, I was fortunate to not getting my fill on the long CN order that sat at 6.72 and was approached twice. Thankfully. The 6.38 was covered for a loss of $700. I’ve been in and out of bean oil a couple of times, the latest buy was on the contract high day :( making it a second tier. Interestingly, I experienced a “butt dial” sell this morning just before the night session closed. Closed out one contract. I put it back on after the market re-opened but at an elevated price.
The vigor and extent of the sell off took me by surprise and so I’m keeping them for the time being. I haven’t seen in the fundamentals a solid reason to abandon ship just yet. And though I’ve got a short player bent, I can’t short a market that seems to have a bullish scenario. If the rains come, I’ll hop on the short side willingly.
In 2004 I was short 2 beans at around 10.15. It went against me for a bit but I felt good about the trade. I’d placed a gtc sell stop for2 more contracts at 9.77. Well, the market traded up to10.35 and I told myself if it hit 10.37 I was out. For 15 minutes it traded 10.35, 10.36. Back and forth. Then bingo, 10.37. As God is my witness, no more than 90 seconds after I placed my order the market crashed. All the way to 9.72, of course filling my gtc 9.77. Now I’m in a quandary. Just took an $1800 hit and I’m short down near the bottom. Not wanting to get double whacked, I closed out the 9.77’s. Poker tilt ensued. Beans proceeded to drop into the FIVES! Almost non stop. I never got back in. The way I scale in and out, I figure that it woulda been a $750k winner. Oh well. Chit happens.
Thanks much for sharing that stomper.
There's just been too much rain for me to be long on any grain trades this month.....other than for the pop higher on last nights open for MN wheat(based on the horrible 45% initial rating for the HRS crop).
That trade lasted 1 minute and it was a miracle the MWE opened near unch then spiked over 10c higher in 1 minute.
If the rains this week stay just south of ND, then we stay dry in the week 2 forecasts, the Minn wheat could get back above $7 in a flash.
We're at 6.81 right now, down a tad.
The record HRW in KS is a drag on prices. However, there is a chance for some excessive rain events in early June for KS, which could spike us higher.............let's say it rained 6+ inches in C/E KS in 1 day, for instance.
We are working on potential reversals higher in beans and old crop corn........if we can keep the strength/buying going that kicked in around an hour after the open tonight.
The Northern Tier of states could miss the best rains and that would be bullish the HRS price.
Old crop prices don't have to follow the weather like new crop prices. The very low stocks/supplies of old crop corn are still looming over the market. This will not be resolved until September at the earlier, when early harvest kicks in.
Maybe the beans have been more bullish than corn recently because there is still much more beans to plant-25% than corn-10%. And this wet weather will hold up planting in many areas.
Also, beans usually fair much worse with extreme rains than corn. So this potential reversal higher could be just a short term spike from too much rain in the C/S Plains as well as the WCB and SCB to CCB.
Re: Re: Re: Re: Re: Re: Re: Weather 5-19-21
https://www.wunderground.com/maps/radar/current
7 Day Total precipitation below:
http://www.wpc.ncep.noaa.govcdx /qpf/p168i.gif?1530796126
Rains falling this morning in some very dry areas of the ECB and funds still liquidating more of their massive longs, right from the day session open have resulted in another wave lower of selling.
However, the weather looks like it could finally turn bullish in week 2 with a major heat ridge POTENTIALLY building into parts of the cornbelt.
There is TONS of rain before that though.