UPDATED! Supply-Demand Matrix In Section #6.
#1 AOA Closing Audio Commentary w/Susan Littlefield
#2 Contrasting Weather–Too Wet For The U.S. Soy-Belt vs. Drought-Busting Pattern Shift In Europe–Seemed To Give Us The Contrasting Price-Action On Tuesday
#3 What I Am Watching For The Rest of This Week: With Worsening Conditions In The Middle East Today (Fresh Iranian Attacks On Ships In The Strait of Hormuz), Can Wheat Continue To Find Support From Crude If Crude Takes-Out Its Monthly Highs Within The Next Week or Two? Or Does Improving EU Weather Cause Fund Longs In Europe To Jump-Out of Positions…Turning The Paris Wheat To The Potential “Leader To The Downside”?
The increase in Chicago Wheat, Coupled w/a Relatively Flat US Dollar, Has Helped Push U.S. Wheat Prices At The Gulf Up Above $280/Ton: Over $10/Ton Higher Than French Wheat & Nearly $20/Ton More Than Romanian Wheat. At The Same Time, We’ve Seen The Soybeans Find Extra Strength Against The Corn & Wheat This Week–w/The Nov. Soy/Dec. Corn Ratio Appearing To Be Trying To Make a Low In The 1st Chart Below. So, This Is The Spread Trade: But What About The Flat-Price Trade? In Other Words, Does The Wheat Help To Cause The Dec. Corn, And Then The Nov. Soybeans, To Violate The Up-Trending Support Line On The Daily Charts Below? If It Does, I’ll Recommend Paper Hedges In Corn Along w/Some Cash-Related Soybean Sales Now That We’ve Rallied Back To The $12.30 Area.
I See This Week’s Close As Potentially Very Key To How We Finish The Month of August In Price Trend–Be Ready For Hedge Recommendations By Friday
It’s Hard For Me To See Soybeans Breaking-Free From Grains Here & Moving Higher By Themselves; The Soyoil Weakness Coupled w/The Improving U.S. Crop Weather + Increased Uncertainty As It Relates To Our Relationship w/China Keeps Me More Defensive As It Relates To Soybeans. I Feel As Though Soybeans Can Rally If The Wheat & Corn Decide To Go Up Another Leg–But I Would Be Surprised To See Soybeans Diverge From Grains.
#4 So Far, My Expectations Of Feeders Facing More Pressure Than Fats Has Been Met: Between The Corn Strength & The Seasonality of The Market, The Fats Have The Upper-Hand In This Market Currently In My View–Especially As It Relates To The Major Technical Support Levels Now Being Tested In Feeders.
As A Result of The Relative Strength In The Fats vs. Feeders, The Feeders Are Now Down Below The $115 Level In Terms of Premium To Live Cattle After Today’s Trade. Notice That The Live Cattle Major Support Is Still A Few Dollars Away From The Close; But The Feeders Are Now Dangerously Close To Losing Its Technical Trendline Support; The $335.95 Low Is A Critical Level Not To Close Below On A Weekly Basis In My View. A Key Feature To The Live Cattle–One I Wish Were The Opposite of What It Is–Is The Sharp Decline In The Hog Complex Since The July Expired and August Took-Over As Lead-Month. What Has Been The Major Cause of This Break-Down In Hogs, As Seen In The Monthly Chart Below? The Cut-Out Chart Helps Me Answer This–A Big Shot Higher In Hams Earlier This Year Was Surprising. Now The Trade Is Taking That Premium Away.
#5 —HEDGE RECOMMENDATIONS/HEDGE TRACKER SLIDE–
#6 —2026/27 U.S. Supply-Demand Matrix & Break-Even Levels–USDA August Numbers To Be Updated In This Spreadsheet By Week’s End
#7 Previous Analysis– Some of The Major Blog Updates In Case You Missed Them
