LTN Closing Grain Comments: Grains Finish Sharply Lower Monday

The grain complex took a beating on technical selling and noncommercial long-liquidation to begin the week. Initial support levels remain a distance away, meaning losses could build Tuesday.

Wheat futures saw follow through from Friday's losses and spillover from neighboring pits to post double-digit losses at all three exchanges. Chicago Wheat closed 0.215 to 0.285 lower in the Sept through May contracts, with Kansas City Wheat down roughly 0.23 to 0.28. Minneapolis Wheat ended 0.1925 to 0.2425 lower. Traders still have USDA's higher-than-expected all Wheat crop estimate on their minds.
Large speculators pared their Bullish bets on Soybean last week as rains boosted crop prospects, missing out on a rally ahead of a Key US government report that slashed the crop size by more than expected due to damage from the worst drought in 56 yrs.

A Commodity Futures Trading Commission report released on Friday showed that the noncommercials cut their net long stake by nearly 8% in the 5 trading days ended 7 August, the eve of a 3-day rally that pushed prices 6.5% higher.

Speculators continued to raise their Bullish bets on Corn as the rain arrived too late to provide relief to that crop and production forecasts fell. Concerns about global supply shortfalls of wheat due to crop woes in the Black Sea region also caused speculators to raise their net long in that commodity.

The CFTC's weekly commitments of traders report showed that noncommercial traders, a category that includes hedge funds, cut their net long in soybeans by 15,724 contracts to 188,795 contracts.

Speculators have cut their Bullish bet on Soybean for 3 weeks running, the longest streak since May, when a speedy planting bolstered expectations of a bumper Soybean crop this fall.

LTN Closing Livestock Comments: Livestock Futures Close Higher

Feeder cattle futures closed significantly higher, live Cattle futures and lean Hog futures also were higher.

Cash Cattle trade was at a complete standstill Monday. According to the closing report, the Iowa Hog base was 0.30 higher compared with the Prior Day settlement (86.50-89.00, weighted average 87.76). Corn contracts closed lower, down 0.1725 in the September and down 0.17 in the Dec contract.

Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.