Shootin' The Bull
"Shootin' The Bull" is a daily futures and commodity market commentary, written by Chris Swift, commodities broker and founder of Swift Trading Company in Nashville, Tennessee.
With over 30 years of experience in the commodity futures industry, Chris's technical and fundamental analysis is provided for his clients and readers in an attempt to make a more informed trading decision.
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“Shootin’ The Bull”
Commodity Market Comments
by Christopher B. Swift
I was wrong. It was today that I believe that most of the shorts are out now. Whether someone blew too hard into the bubble, or someone else stuck a pin in it, I believe the bubble popped today. Short covering is believed as a large part of the buying. The aggravation of a widening basis exaggerated the buying. Margin calls and losses to shorts have been precipitous for most of July. Tuesday and Wednesday's waning of price may have given some a breather on margins and losses to the point that decisions were made to exit if prices rose again, to avoid further margin calls or losses. That may have culminated today with what appears to have been a blow off top, and ending in a key outside reversal. At this juncture, until today's high is exceeded, I anticipate a top to have been made.
Just about the same for feeder cattle. The blow off top exceeded a few contract month's wave 1 low that begins to negate some of the older wave count. It does not impact the current pattern. I continue to believe that the lions share of this rally was produced by short hedgers buying back short positions as they liquidated physical inventory, whether at the same time or later. At this time, I believe that producers have reloaded with equal or greater inventory on hand with very few price protected.
Hogs were slightly higher today. I continue to anticipate red meat production to be elevated with an impact on demand from every aspect there is from Covid to Congress.
Grains are weak. The weakness in corn and beans is perceived as part of wheat's weakness. Wheat has neared the stopping point of $5.05. Further new contract lows are anticipated for corn with potentially in beans as well.
Energies produced no follow through from Wednesday's buying. I don't anticipate energy to be strong.
US Treasury Bonds:
More evidence comes to light as to how much loss of revenue there has been for a majority of businesses with bankruptcies increasing steadily. I find it interesting that markets are seemingly performing in reaction to statements by the government on how much money is going to be given out. Markets are believed becoming dependant on the government to pay consumers so they can buy products that may or may not impact a businesses bottom line. Bond prices set another new high of the recovery. Although sold off sharply by the close, they remain at the tip top of the historical price range.