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Tech Guy Weekend Update 5/28/23

For market participants who are wanting to pinpoint a live cattle topping pattern, Friday seemed to give us clues on June Cattle chart. During the first 15 minutes of trading on Friday, June Cattle bought up almost a dollar, then retraced most of it back down, all of it on pretty fair volume.

After this, the trade was narrow and sideways, well below the highs. It looks like a spike up/down ledge pattern formed on the 15 minute chart. We were already thinking the high/exhaustion of buyers was near on the cattle.

There is a good chance cattle will not make higher highs in the nearterm. Friday closed at 167.275, and if cattle can close below 166.325 on Tuesday, confidence is high that a down correction will begin.

You can see what I'm trying to say on the June Live Cattle 15 minute chart.

July Corn continued to trade steady higher on Friday, Closing above the first resistance of 600 at 605. The uptrend is firmly established at this point and Monday night's opening is a wildcard, but because of the strength and stability of the corn rally, support should be at the 599 level.

There could be some resistance around 616, and then higher between 645 and 647. Here is the daily continuation chart of corn. You'll notice I've mapped out a rough possible path of July Corn with blue lines- where the corrections may occur.

The July/August Soybean spread chart made new highs on Friday, indicating increasing demand for cash and/or July bean futures.

The July/Sep Corn spread is similarly strong.

July Soybeans didn't quite breakout to the upside yet, but closed in the top portion of the range of the bottom formation on Friday. I expect a breakout above 1348 very soon. Beans closed at 1336.25 on Friday and lower support is 1323 if needed.

The first target higher is 1420 and then I expect a correction to about 1380. There is also a rough course higher mapped out with a couple of possible dates thrown in. I calculated a possible second leg higher with a Fibonacci ratio if the first up leg goes as planned - you will see this on the 8 hour July Bean chart.

Looking at the long term weekly charts in corn and beans and considering the rally that began in 2020, there is a possibility that all the trading since May 2021 was all corrective in nature.

The first leg higher in to May 2021 was 850 cents long in beans, whereas the rally last spring only marked up 570 cents. Normally, the second leg higher is longer than the first.

Because of this, I have to consider the long-term correction theory - from May 2020 till now. If this is the case, we are just beginning a second impulse up in beans which should be greater than 850 cents higher from 1305. Simply something to consider for longer term.

July Wheat managed to find the fund buyers, as well on Friday, and it closed up +12.75 to 617. Resistance is at 630, then eventually wheat should rally to 670. Here is Friday's 4 hour chart.


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