| Corn | Soybeans | Soymeal | Wheat | Live Cattle | Hogs |
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| Cotton | Class III Milk |
| Weekly Corn |
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| Corn: December futures are due for a Level 3 intra-month cycle low this week (not shown but discussed at Posson Profit Watch). This helps to explain the pullback at the start of the week and it is normal business within developing larger uptrends. Support is the uptrend near $3.74. Prices are forecast by the business model to work higher into late December to mid-January. Current upside objectives begin at $4.13. The oversold five-week stochastic is close to a buy signal. The five-week average near $3.79 5/8 is nearby resistance and we should also keep track of 40-, 100- and 200-day moving averages (not shown), which reflect economic levels. Basis has improved, which is a reflection of light farmer sales. Funds have been of a slow sell side characteristic. A close above last week’s high at $3.87 ½ would be additional bullish evidence as would a buy signal from the five-week stochastic. The 10-year seasonal is up into March. Open interest rose the past two weeks alongside modestly higher prices suggesting new demand via futures. Gulf export bids rose this morning. South African prices made a new high for 2015 on rising drought concerns. China’s PMI turned up suggesting a slowing pace of contraction and it is not in a recession relative this study. The JP Morgan Global PMI turned up to a seven-month high, which suggests exhaustion of a slowing trend since early 2014. A chart of the economic indicator along with use of the business cycle model leads me to call a cyclical bottom. The same is likely for the U.S. indicator and economy. |
| Weekly Soybeans |
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| Soybeans: TrendlineMarch futures are within a time and price objective (window of reversal) for a Level 2 business cycle low. And the five-week stochastic trends toward oversold. Funds stayed with recent purchases despite the current correction within a developing Level 1 business cycle uptrend into January. The trend of weekly export sales is still up. The Pro Farmer soybean dollar index is struggling to maintain an uptrend since last year and a cyclical forecast offers a pullback this month. Trade above last week’s high at $9.02 ½ would be a sign a leg higher into the future Level 1 top is underway. The Level 1 trend reversals occur two to three times per year and reflect the more important fluctuation of demand/buyer interest. Other resistance to watch is the five-week average near $8.95 1/8. The 10-year seasonal trend should be up into March. |
| Weekly Soymeal | Back to top |
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| Soybean Meal: December meal bumped its head this morning near the five-week average around $306.80 and close above it would be bullish. A close above last week’s high at $308.30 would also be a bullish sign. The business cycle model seeks a Level 1 low that was likely placed last week and it should lead to a rally into January for a related top (see the Level 1 window of reversal on the chart around $330.00). Funds were on the sell side last week, but note that prices mostly recovered suggesting buyer interest from other participants. European rapeseed prices show relative strength to soymeal. Various global markets show signs of buyer interest. It is only a matter of time for meal to get over seasonal factors. The 10-year seasonal suggests rising demand/prices into March. | |
| Weekly Wheat | Back to top |
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Wheat: Futures are trending lower into a Level 3 cycle low due this week, which would ideally trigger a bottom for the more important Level 2 business cycle. The small blue box is a time and price objective for a reversal higher. The lowest for support for this study is around $4.99 for the December SRW. The five-week average near $5.04 7/8 is a potential support level. The five-week stochastic is trending higher from a buy signal made last week. The Level 2 bottom is to be part of a hesitation within a larger Level 1 uptrend that was revised into January for its peak. Upside objectives begin at $5.53. Funds were buyers last week. Although of a ratchet process the overall trend of open interest and prices is up since early September suggesting demand/buyer interest via futures. Demand is mostly domestic alongside reluctant sellers, but exports were recently higher with featured buyers as South Korea, Thailand, Philippines and Malaysia. Some of improved exports relate to concerns over El Nino impacting Australian wheat production and some of Asian crops. A senior state weather forecaster said on Monday severe drought for half of Ukraine could sharply reduce their 2016 harvest of winter wheat. The drought was said to be the driest in 50 years and may lead the sixth largest producer to a 20% reduction in harvest. El Nino concerns in South America continue and Brazil has seen wheat damage to wet conditions in the south. A positive weekly reversal for U.S. wheat futures will likely be a sign the next leg higher is underway. | |
| Weekly Live Cattle | Back to top |
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| Live Cattle: Futures likely peaked last week for a Level 1 business cycle. A close below last week’s low at $140.05 for the December contract should be a bearish sign. The overbought five-week stochastic is rolling toward a sale. Funds were modest sellers into the final stage of the retracement rally. And volume was non-supportive of bulls during the upswing. Choice boxed beef started to rollover last week. December futures appear to be rolling over following trending into the time and price objective for the Level 1 top. Cycles offer insight into how demand/supply or buyer/seller interest fluctuates. If the contract finds support around the five-week average near $140.55 then watch for major resistance from $146 to $150.00. Prices should decline into a related low due near month-end to next with potential for $135.00s to $132.00s. | |
| Weekly Lean Hogs | Back to top |
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| Lean Hogs: Hogs have fallen as expected from a Level 1 top and are due for a Level 2 low. Support may be as low as a tentative trendline near $55.00, but the December contract is at the low-side of a time and price objective shown on the chart. And the five-week stochastic is oversold, albeit with wide range. Once the Level 2 low is placed prices should retrace some of the rout and into a Level 2 top due near year-end to early January. The down turn in the hog index is bearish and pork cutout values warn of a cyclical slump in demand. | |
| Weekly Cotton | Back to top |
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| Cotton: ICE launched a world contract Nov. 2. It may take a while to build data to assess trends of the contract. For the December U.S. contract prices are to work higher into a Level 2 top. The five-week stochastic is rolling toward a sell signal, but is not overbought. Open interest rose during the recent rally suggesting demand via futures. But late-harvest hedge pressure may limit upside potential. The business cycle model offers still higher prices in early 2016 for a Level 1 top. And the long-term three-year business cycle may be up into next summer. A related low was placed early this year. The 10-year seasonal trend is up from November into March. | |
| Weekly Class III Milk | Back to top |
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| Class III Milk: March and nearby C3 futures mark time. The continuation chart is due for a Level 1 low as are cheese prices. A Level 2 cycle low is due for March and farther out contracts. Prices should bounce into December for a related high. Long-term analysis continues to call for a bull market into, if not through 2016, which is in line with the forecast for the economy of net growth into 2017. But supplies of milk remain adequate at this time. | |
