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Fresh news in the grain/soy complex is rather sparse this morning, as I do not think these markets really give a hill of beans about the conclusion of the Mueller investigation and would rather hear news of the conclusion of the U.S./Chinese trade negotiations, ideally with a positive outcome. Of course, that is not the case just yet and Treasury Secretary Mnuchin and Robert Lighthizer should be busying at work in Beijing right now. Regardless, our markets do have a slightly positive undertone to begin the week, but I suspect with month end approaching rapidly, this could wane soon without some positive reinforcing news.
While it would be premature to say anything definitive, it appears that help may soon be on the way in the form of a weaker U.S. Dollar. It is not as obvious on this monthly chart, but when the Federal Reserve met last week, they changed their tone rather significantly from last December and instead of additional interest rate hikes this coming year, it would appear that they lean toward leaving rates unchanged and some believe could even possibly lower them if the economy begins to stumble. This shift in attitude put the dollar on the defensive and we could be staring at what will turn out to be the highs for the year. From a purely technical standpoint, we appear to have lost the upward thrust against the 61.8% retracement and have indicators close to overbought and losing momentum. I am not one that tries often to read “technical formations” per se, but it does also appear that we may have a head and shoulder top being carved out.
We need to remain patient to see if this comes to fruition or not, but if correct, it could be just the elixir that our markets need to provide a little more upside excitement this summer. For now, we will have to rely on the wet conditions and late spring for support.
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