This is a sample entry from Tom Dosdall’s newsletter, Technical Ag Knowledge, published on Monday August 15, 2016.
**Commitment of Traders (futures only as of Aug 9) CORN -141,495(-34,727 since Aug 2); SOYBEANS +99,425 (+2,404) SRW WHEAT -120,312 (+10,159)**
Ag Markets
Dec ’16 Corn
Corn may have carved out a significant low following Friday’s bearish USDA report/reversal into the close to finish higher on the day. A close today above 336’2 will confirm a more mildly bullish technical picture for the week ahead on the charts. We have a well defined area of supply/resistance at 348’4. Funds are holding a large net short futures position (-141,495 as of Aug 9) so a short covering technical bounce cannot be ruled out.
Nov ’16 Soybeans
Similar to corn, beans show impressive technical price action following Friday’s bearish report. Has the market now priced in peak estimated supply? We continue to view the 950’0 area as a strong base of support and entry area for re-ownership strategies. When trading below 999’0, the market is in a neutral/fair value trading zone. A close above 999’0 tilts the scales more bullish and in favor of a possible run toward the 100 day SMA at 1028’6.
Sep ’16 Wheat
Net short fund position (futures) is reduced by over 10K in Friday’s report, confirming the spec trade may have been as short as it was going to get a week or so back. Technical price action is strong on Monday morning on the back of bean and corn strength. The key today is watching for a close above 424’4 to signal a more meaningful shift in trend in favor of bulls. Should this occur, and given the size of the remaining net short fund position, I would not rule out the possibility for a rally to target 447’0 (1). The charts show a strong base of support at 402’0.
Dec ’16 Cotton
Cotton is out of balance/bearish when trading below 0.7294. Initial demand level this week comes in at the 0.7000. I expect the weak USD could help to support in this area. When trading above 0.7294, trend looks more friendly for the bulls and a possible rally toward the top of the value zone at 0.7672.
Oct ’16 Live Cattle
Cattle looks to potentially struggle again with the 10 month bear trend line resistance near 115.850. Producer looking for an area to hedge production might consider hedges in this area. Lower trend line support is all the way down at 104.000. A close below 112.900 sets up the bearish picture once again.
Oct ’16 Lean Hogs
The hog market could finally be getting ready for a recovery bounce after trading 15 cents higher just two months ago. TAS Boxes put in a good base of demand at the 58.00 level. Navigator indicates bear trend exhaustion and a potential shift in favor of more buy interest. A close above 60.600 confirms technical shift in trend to bullish. Short term target would be 64.250.
Outside Markets
Sep’16 US Dollar
The Dollar has a mildly bearish setup to start the week but we see a demand level nearby at 95.121 which should help to support the market (TAS demand intersects with 50 day simple moving average). Short term rallies toward 96.400 are viewed as selling opportunities.
Sep ’16 Crude Oil
The strong up trend in crude oil helps to support commodities last couple of weeks. Producers will want to take note of the convergence of moving averages nearby at 46.40 for a potential reversal area. The uptrend is supported near 43.33.
Subscribe to Technical Ag Knowledge – Paid Edition – Monthly
Technical Ag Knowledge – Paid Edition – Monthly - Whether you’re a producer, end user, or trader in the agricultural commodity markets, “Technical Ag Knowledge” will provide you with a crucial awareness of key technical price levels each week so you can manage your positions with conviction and confidence.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
