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Well, that's a wrap. Grain futures, they were seen limping into the long weekend with corn and soybeans managing to squeeze out modest gains while wheat futures went home a touch lower.
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Underneath the quiet, though, the charts are starting to whisper a little bit.
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And corn futures, they were stuck squarely in no man's land in the back half of the week as it seemed that nobody really wanted to stake a flag of conviction ahead of the extended
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weekend. But that does leave us at an interesting price point on the chart into next week's trade. Soybeans, that's where I think the more interesting tape
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is right now with the potential head and shoulders formation starting to take form. We'll get into that chart in a minute, but first let's cover these uh
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corn markets. We'll start with the July old crop contract. We've talked about this a million times now. We've got 480 to 487 is a just a stiff wall of
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resistance that we were not able to get out above. We obviously came well off of that here over the last couple weeks.
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Broke below these moving averages this week again, which leaves us kind of eyeing this downside support between 456
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and 458. You've got a few different things that converge within that pocket, including trendline support from these lows in January as well as the 200 and
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the 100 day moving average. So for the bulls, that's going to be a mustold area in the July contract. If you've been bearish against resistance, this would
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be a spot to potentially reduce. If you want to be bullish, this is a spot to be potentially looking to the long side and expressing that opinion. With that in
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mind, it's a good riskreward setup down here for the bulls. You know where you're wrong, right? You take out these lows uh from last Friday and all this
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support down here and you rip the band-aid off and reassess. So, the risk seems to find a little bit lower in that July contract. December futures, they've
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held up a little bit better. We're still not down to trend line support. That's just a stone throw away though. Uh coming in near 480 to 481. That's going
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to be the mustold pocket for December futures. A failure there. And you're looking at the 200 and 100 day moving average below the market 467 then 474
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and 58. The concerning thing here is that we're marking lower highs. We've tried to be optimistic on December.
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Remain optimistic on December on a longer term basis, but short term a little bit of turbulence with what's going on in the crude oil market and
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just what's going on with the weather as well. Obviously, the planters have been flying around. Planting's ahead of pace.
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Weather's been pretty good. So, uh some some headwinds uh since the start of the week, but we'll see if this trend line can hold and if it can, I think we can
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continue to work up and to the right over time. Now, over on the soybean side of things, I had mentioned that uh we were looking at the potential head and
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shoulders formation in this July contract. As you can see it here, here's the left shoulder, the head, and the right shoulder. And we're right back at
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that 50-day moving average, which below that, and we're right back into this congestion zone. So, if if we break below that 50-day, that's at about 1190,
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then we're probably looking at a potential pull back to the bottom end of this range, 1168, 1170. And this is kind of a similar setup to what we saw back
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in October, November where you got this head and shoulders formation here. It was almost textbook and it played out just as you would think. I'm not going
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to say that we're going to see that exact same thing where you see that type of decline, but you do have the technical weakness and certainly it seems like ALOS are playing a little bit
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more of a role here in the recent modern-day a trade. So, a failure at that 50-day moving average probably
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drops us back into this zone. 1168 1170 if that gives way. I I think there's probably quite a bit more air underneath
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the market. So, not super optimistic on those July soybeans. New crop November beans. A little bit more optimistic as we have been for quite some time. The
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chart remains intact up and to the right trend line support. The 20-day moving average still holding. So, that looks good. a failure here on this trend line
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and potentially that's when you start to see the the tides turn a little bit and the the bearish flows take over. Over on the wheat side of things, it was kind of
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a hoham week uh July futures, they settled right above the 20-day moving average. Again, uptrend largely still
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intact for this market. The KC contract that's gotten a lot more attention over the last couple of weeks as it looks uh kind of similar to to soybeans in terms
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of the head and shoulders formation forming there. So, a couple caution flags out there despite uptrend still being intact in these grain markets.
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Now, jumping over to the livestock side of things. It was obviously a wild wild day. Uh big limit down day in August
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feeder cattle yesterday that gave us expanded limits in today's trade for live cattle and feeder cattle. They weren't used. They were getting close to
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being used in the feeder cattle market uh but just avoided it. There were just a a number of different things thrown at this market this week with regards to
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lockout at the Cargill plant in Fort Morgan. You had President Trump kind of chirping the market again, saying beef prices will come down. But outside of
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that, something we've been hitting on is just a big disconnect between what the futures market has been able to do in the midst of a surging cash market. We
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had cash reaching all-time highs and here futures were three weeks removed from a contract high. So, the fact that futures were not able to rally on good
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news was a big caution flag and probably sounded like a broken record if you're a client talking to us over the last 3 or 4 days. It looked like a gift to anybody
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that's not, you know, familiar with the futures market, but the market does not give you gifts. It sets traps. And that's exactly what we saw take place
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over the last 24 48 hours in this cattle complex. We broke and closed below the 50-day and trend line support. That potentially opens us up to a little bit
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more weakness. You've got this little box here that seems to be like an onoff switch ever since that gap lower back in October. That was resistance in
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February. And then the breakout point in March, support in April. And here we are right there again. A failure here. And that coincides with a 100 day moving
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average now between about 235 236 and a half. And you could continue to see long liquidation regardless of what the cash
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market does. So, what a lot of people forget when you get funds so lopsided on one side of the market, when there's a technical breakdown and they're all
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looking for the exit doors, they're all looking for the exit doors. They're all already long, there's no one really left there to buy it. So, that's why you get some of these big moves in the cattle
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market. Uh, feeder cattle probably an even better example of that. Obviously, a big technical breakdown. We're sandwiched between the 20-day moving
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average as resistance and the 100 day of support that gave way and boom, right down to that 200 day moving average.
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came off that a little bit into the close. We'll see what next week brings.
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Over to the lean hog side of things and wrapping things up. Finally squeeze out a day of green. Snapped a six-day losing streak in the lean hog market, which was
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a little bit of a bright spot. Still a technical graveyard. The bulls have a lot of work to be done. We need to see consecutive closes back above these uh
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the 20 and the 100 day here. 103 to 104 above there. Potentially start to see some momentum build in this market.
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Seasonally, the tides do turn a little bit more friendly um after this long weekend. So, hoping for some seasonal strength. As far as the um the
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commitment to traders report go, we've seen long liquidation ensuing. Funds are probably about neutral right now. Uh about as neutral as it could possibly be
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be. So, the risk of long liquidation, unlike live cattle, is really no longer there in this hog market. So, potentially that at least lessens the
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blow if we do continue to grind a little bit lower in the near term. So looking for some opportunities in the long side of July lean hogs based on seasonal
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tendencies and based on some overbought oversold conditions with funds relatively neutral. We'll see uh what next week brings though. We hope you have a good happy and safe long weekend.
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