r e l a t i v e // strength

volatility will continue to be the norm

Corn was all over the map this week... probably frustrating as many traders as possible. We hit 284 on Dec corn and the market has since backed off nearly 8c. It looks like the 10-day forecast has gotten a little dryer since the market close on Friday. We'll see how it looks Sunday evening before the trade reopens.

• cattle closed lower Friday. The strength in corn will likely continue to have an inverse relationship with livestock. It'll also be interesting to see how the most recent (7th) case of mad cow in Canada will play out.
• beans may be building some potential energy for their "big mover" month of August. If dryness persists in the grain belt for the balance of July, then we could open August with a bang.
• Sugar may retest lows before setting up a possible buy. I'm watching the October contract.
• Cotton may head churn south a little further before the Dec contract turns into a potential long position.
• weakness in hogs could persist for a while... the number of daily kills in hogs is downright amazing.
  

August is shaping up to be an absolutely bonkers month for traders. There is an underlying basis of support with the bean market that has held since the beginning of the year. With prices staying where they are despite the much talked about bearish fundamental picture, one has to wonder what else there is to this market. One trader I heard about was touting the "safe bet" of selling $7 call options on beans. Personally, that would require me to step out of my comfort zone as a trader. A market that has been dormant like beans for the past few months is likely to be comparable to a sleeping dragon that will some day awake with a firey vengence.

posted by jared @ 9:01 PM