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September 21, 2017
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. ."Shootin' The Bull" Commodity Market Comments

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September 21st: Commodity Market Comments 
  • “Shootin’ The Bull” -- Christopher B. Swift.
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    Live Cattle: New contract highs in the April ’18 and out months.  February appears to be hot on its heels.  October and December may expire within their major wave 2 confines.  At this time, I do not advocate being short.  I do advocate using this rally to market inventory going into December.  The negative basis can be secured with a put option and leave the top side open.  A righting of the boat continues.  While there is no bullish news, the supply bears just don’t have much more to go on any longer.  Beyond the December time frame, fat cattle numbers are anticipated to decline.  Were the on feed report to reflect a dynamic change in production, then anticipate a very close pattern to last year to materialize.  I know many have been attempting to correlate ’16 to ’17 and is just didn’t.  However, it may now and that correlation would be viewed as very friendly towards the market.  The wave count is difficult on the October and December.  This rally is perceived as the beginnings of  a major wave 3, but will still most likely expire prior to setting new contract highs.  The February and out months appear to be in a wave 1 of major wave 3.  While February still lacks a little less than $4.00 to the contract high to confirm major wave 2 complete, the April and out have confirmed the completion of major wave 2 and considered in major wave 3.  At this point, the major wave 3 will be anticipated to unfold in a 5 wave scheme.  At present, wave 1 of major wave 3 remains in progress.  A wave 2 of major wave 3 will be viewed as the opportunity to add or enter long positions and exit shorts.

    Feeder Cattle: January feeders held their own today.  The sharply negative basis was most likely the reason for the ’17 months to fall off.  On the hourly chart, the oscillator is now trading at a higher level than it’s previous high at what was perceived the minor wave 1 high.  So, we had a weakening oscillator from the top of minor wave 1 but it did not weaken below the zero line.  This leads me to perceive that all of the price movement from the 11th is one move.  Now the price is at a new high as well as is the oscillator, helping to confirm minor wave 3 is deep in progress.  Upside target remains at $157.00 January at this time.  Were the on feed report to show slowing placements and it seeming that yearling’s are gone and the feeder supply light in weight coming for the remainder of the year, this contract month continues to be the one to watch.

    Corn: I remain no more correct or incorrect on my analysis of corn.  My analysis suggests it should be going up, it’s going down, and I don’t think that being short would make me correct.

    Crude: Heating oil continues higher.  I continue to recommend having farm tanks filled as soon as possible.

    S & P 500 Stock Index: Equities still look toppy, but who knows how much higher the surge can take them.  I’ll probably be looking to own some put options were the indices to make one more new high.

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    Christopher B. Swift is a commodity broker and consultant with Swift Trading Company in Nashville, TN. Mr. Swift authors the daily commentaries "mid day cattle comment" and "Shootin' the Bull" commentary found on his website @ www.shootinthebull.com

    An investment in futures contracts is speculative, involves a high degree of risk and is suitable only for persons who can assume the risk of loss in excess of their margin deposits.  You should carefully consider whether futures trading is appropriate for you in light of your investment experience, trading objectives, financial resources and other relevant circumstances. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

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