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 apologize, but I won't be able to write a "Shootin' the Bull" commentary on Friday.
I saw last weeks actual slaughter come in at 637K. Each week, the guess is some where north of 644K, and seemingly each week, falls dramatically short of. Packing capacity and weekly slaughter rates are totally different. I continue to believe that packing capacity is somewhere north of 675K. However, there is no need to facilitate a rate that big at this time. The consumer appears well entrenched in current discretionary spending habits. The election is only 7 business days away and the results are anticipated to produce significant volatility within markets and social circles that leads me to believe consumers won't be out spending flagrantly on beef.
The new lows today in the December and February contracts are being made without the oscillator having returned to the zero line. Therefore, the major wave 3 decline is believed still intact. Hence, wave 4 has not begun as of yet. However, the new lows, without having returned to the zero line leads me to believe the termination of the major wave 3 will sooner, rather than later.
The feeder cattle index is now dropping in leaps and bounds. Sales today were believed $5.00 to $6.00 lower in areas, leading me to believe the index is far from a bottom. Traders have rushed futures down sharply from the index. When coupling the futures discount, with the onslaught of calves coming to town, the backgrounder is believed as much in the hot seat as the cattle feeder. The cheaper calves may pay off though in the coming months. Were nothing bad to happen from here, and the consumer continues to heal, then with increased opening's of restaurant's, hotels, and hospitality, I would find it less likely for cattle to go into a bear market.
Somewhat similar to the fats, I have to believe that were a new low made tomorrow or Monday, it would be a part of the major wave 3 as the oscillator has not traded back to the zero line. So, watch for some pretty fast price movement potentially over the next couple of days.
Hog futures sold off sharply today, even with the index continuing higher. With the willingness to push meat prices down so hard in the future, when currently it remains somewhat elevated, suggests there is more meat coming down the pike.
This article on California's Proposition 12 should be read. California Proposition 12
Corn traders continue to thwart efforts of sellers to form a top. I continue to believe corn and beans both are nearing a top.
Wheat is jockeying back and forth. I anticipate wheat to continue higher, but not sure there isn't a correction lurking before further price advance is seen. Both continue to set their new highs on lower oscillator readings on the hourly charts. I believe this divergence is a clue as to the buying starting to dry up.
Wheat may see some well needed moisture in the manor of snow fall soon. What is feared is dormant seeds receiving just enough moisture to germinate and then fall off dry once more. This event will make for some volatility, as not enough would be anticipated to send prices higher and just enough maybe lower for a correction of significance.
Energy clawed back losses from Wednesday. The sideways trading persists.
US Treasury Bonds:
Bonds are moving lower now in earnest. Retail rates are anticipated to rise and I would dare to say there will some liquidation prior to the elections. Debt is rampant and most likely needs to be paid down by both the government and consumers.