Soybeans, Corn & Wheat Confirming Outlook into 2019.
Soybeans, Corn & Wheat Confirming Outlook into 2019.
06/23/18 Weekly Re-Lay:
“Soybeans, Corn & Wheat have dropped sharply after reversing lower in line with multiple weekly cycles (and the weekly LHR in Soybeans) that projected final rallies into late-May/early-June.
From a longer-term perspective, these grains fulfilled projections for substantial advances in the first half of 2018 – leading into June 2018 when cycles would turn back down. Soybeans led that reversal, turning their weekly trend down on May 11 and then projecting a quick, 1 – 2 week bounce before a more substantial decline into late-July.
That remains the case and the grains remain weak, with Soybeans & Corn plummeting as they powerfully reinforce this bearish period. Wheat is the only one to maintain some minor semblance of resilience and would not turn its intra-year trend neutral (from up) until a weekly close below 460.0/WN.
From a longer-term perspective, Soybeans & Corn are reinforcing 1-year (360-degree), 2-year and even 4-year cycles discussed for several years. As they were nearing projected lows in June – Aug. 2017, the 1-year & 2-year cycles were revisited – projecting lows at that time and then subsequent lows in July/Aug. 2018. That is still the case.
In between, some larger-degree cycles and at least one key monthly cycle focused on late-May/early-June 2018 for an intervening peak – another case where a multi-quarter peak could be set in one month and a multi-quarter low set 2 – 3 months later.
(A more extreme example of that was seen in 2018 in the S+P 500. It set a multi-quarter peak in late-Jan. and then a multi-quarter low in early-Feb. ‘18 – less than two weeks apart. In fact, that high and low are separated by only six trading days.)
Soybeans had an ~11-month/~48-week cycle that timed multi-quarter lows in early-Oct. ’14, early-Sept. ’15, early-Aug. ’16 and late-June ’17 – projected to spur an overall advance into a multi-quarter peak in late-May 2018.
That coincided with expectations that a multi-quarter peak would be set in the middle third of 2018 – perpetuating a ~2-year cycle between highs and the mid-point of a ~4-year cycle between highs.
Wheat had set highs in May/June in 2015, 2016 & 2017 (1 week error) and was poised to repeat that seasonal pattern with a peak in May/June 2018.
As grains entered 2Q 2018, intermediate cycles corroborated those longer-term cycles – pinpointing late-May/early-June 2018 as the most likely time for a peak and reversal lower. That was fulfilled.
Looking ahead, Soybeans have been projecting a multi-quarter bottom for mid-to-late-July 2018 – based in part on a 27 – 29 week Cycle Progression that was reiterated in May. When Soybeans turned their weekly trend down on May 11, it signaled that a top was in place and that Soybeans were entering the expected decline into mid-to-late-July.
Not only would a July ‘18 low perpetuate that 27 – 29 week cycle, it would also perpetuate a broader ~360-degree high-high-high-high-low-(low) Cycle Progression that has timed successive 6 – 12 month turning points during the months of June & July.
The most recent two phases, those with the greatest influence, create a high-low-(low) Cycle Progression targeted for late-June – mid-July – overlapping the 27 – 29 week cycle. At the same time, Wheat was projected to set its next intermediate low in mid-to-late-July, fulfilling a 15-week low-low-(low) Cycle Progression.
Corn could stretch a multi-month low into Aug./Sept. 2018 – the next phase of a ~360-degree/~1-year low-low-low-(low) Cycle Progression. A low in Aug./Sept. 2018 would also perpetuate a ~720-degree/~2-year high (Aug. ’12) – low (Sept. ’14) – low (Aug./Sept. ’16) – (low) Cycle Progression.
With grains fulfilling their upside potential for 2018, and setting highs that were expected to hold for 6 – 12 months, they have entered what could be an extended period of volatile consolidation once those expected cycle lows take hold.”
Grain markets are fulfilling projections for 2018 – beginning with a multi-month advance that was forecast to culminate in the middle third of 2018 – coinciding with 1 – 2 year cycle highs. Weekly cycles honed that outlook and focused on late-May/early-June 2018 as the most likely time for a multi-quarter peak followed by a drop into 3Q 2018.
Grains fulfilled that with Corn & Wheat peaking late-May 2018, as Soybeans diverged and set a lower high at that time (fulfilling their weekly trend sell signal of early-May). Since then, they have been projecting an overall decline into late-July 2018. This developing peak provides powerful corroboration to what has been forecast for 2019 & 2020 – a time when unique and potentially explosive cycles collide, particularly in Soybeans. See Weekly Re-Lay & INSIIDE Track for additional analysis and/or trading strategies.