Where's the low for grains!?

Grain markets continued to bleed lower in Tuesday's trade despite oil continuing to show strength.  Lean hogs had an impressive reversal, is the low finally in?  Senior Market Strategist Jason Gehler breaks down today's action. 

Grain and Oilseeds Wrap Up

The bleeding didn’t stop for the grain markets with corn and wheat hitting fresh lows for their respective downturns while soybeans could be on the brink of tipping over as well.

The corn market was quick to move to losses of 5 to 6 cents and didn’t make much of an attempt to recover. The July contract moved to within 6 to 7 cents of lows set back in mid-January. There’s plenty of catalysts out there that can turn the market around like weather and Middle East tensions, but it feels like the market is trying to force out more weak longs first. We expect downside risk is greatly diminished from current price levels with a lot of growing season still ahead.

July soybeans tried to come off morning losses of 16 to 17 cents but would head back down to session lows near the closing bell. The July contract is threatening major support around $11.60, an area the market has traded below since it was on the way up back in February. November soybeans are threatening uptrend support near $11.75 and will need more help from bean oil, which has been a market that has been able to keep pushing higher thanks to shifting biodiesel blending requirements. The July contract looks like it needs to hold above $11.60 to avoid a meltdown.

Kansas City wheat took on another day of double-digit losses, which has become a common theme over the past several weeks. The July KC contract has room to fall to a challenge of $6.00, which is still another 30 to 35 cents away. If July Chicago wheat can’t hold on near $6.00, the next downside target is 20 cents away at $5.80. A positive headline is desperately needed for the wheat markets and that seems like it’s going to be difficult to find considering yesterday’s spike in crude oil couldn’t lend support to any of the grain markets. 

Cattle

Live cattle started the day $3.00 lower and would once again bounce off key short-term support that sits near $237.50. Prices would end the day nearly $3.00 off session lows. Feeder cattle started the day with $6.00 losses, seemingly reacting to screwworm moving closer to the US. Lows that were set about a week ago were challenged and held near $345 for the August feeder cattle contract. Both live and feeder cattle prices can break their respective downtrends that have formed if prices can string together a few days of strength. Screwworm in the US likely causes initial bearish reactions but the bottom line remains that cattle supplies won’t be rebuilt anytime soon. Those with a bullish opinion can take shots on the long side of the cattle markets with tight stops placed near recent lows.  

Hogs

July hogs were on their way to fresh lows this morning just shy of $98.00 but would notch a bullish key reversal by first putting in a fresh low and then closing well above the previous day’s high. The amount of time spent below $100.00 for July hogs could end up being short-lived if seasonal strength starts to have an influence on traders’ mentality. A convincing move beyond $102 is what the bulls need to open better upside potential. It will be important for hogs to string together a few days of gains because any small rallies over the past few months have quickly prompted selling interest.

Get all of our daily commentary straight to your inbox!

-AM & PM Analysis (written and video)

-Weekly Crop Progress Update

-Weekly Drought/Moisture Analysis

-Commitment of Traders Updates

-Seasonal Updates

Sign Up for a Free Trial - Blue Line Futures

Research Disclaimer 
All information, communications, publications, and reports, including this specific material, used and distributed by Blue Line Futures LLC shall be construed as, or is in the nature of, a 
solicitation for entering into a futures transaction. Blue Line Futures LLC does not employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.

This email may include information produced by third parties. Material not labelled Blue Line Futures LLC should be considered to be third-party, and is provided for informational purposes only. Third-party material is from sources believed to be reliable, but its accuracy is not guaranteed by Blue Line Futures LLC.

Futures trading involves a substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete, and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Blue Line Futures is a member of NFA and is subject to NFA's regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians, or markets. Therefore, carefully consider whether such trading is suitable for you, considering your financial condition. 

With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third party application. Blue Line Futures employees use only firm-authorized email addresses and phone numbers. If you are contacted by any person and want to confirm identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500

Performance Disclaimer
Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.

Hypothetical Performance Disclaimer

One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.

Seasonal Disclaimer

This message and its content is intended only for the person or entity to which it is addressed and should not be shared with additional parties. Seasonal tendencies are a composite of some of the most consistent commodity futures seasonals that have occurred in the past several years. There are usually underlying, fundamental circumstances that occur annually that tend to cause the futures markets to react in similar directional manner during a certain calendar year even if a seasonal tendency occurs in the futures, it may not result in a profitable transaction as fees and the timing of the entry and liquidation may impact on the results. No representation is being made that any account has in the past, or will in the futures, achieve profits using these recommendations. No representation is being made that price patterns will recur in the future.

The information and opinions contained herein comes from sources believed to be reliable but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options is substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.