The New Moon and the Solar Eclipse
Aug 18, 2017
Market Watch with Alan Brugler
August 18, 2017
The Full Moon, New Moon, And Solar Eclipse
While scientific rigor may be lacking, there is a popular belief that a full moon brings out irrational behavior in humans. While the full moon in August 2017 was back on the 7th, it sure seems like the crazy behavior has increased during the waning phase, if you watch the news! We adhere to the belief that “if you trade the news, you lose.” The few traders I know who try to use lunar cycles for trading will tell you that the market occasionally does a polarity flip, where a high price falls where a low should be, or vice versa. Something happens around the new moon to reverse behavior. The new moon this month will definitely affect perspective, as it will be creating a total eclipse of the sun on August 21 (Monday) on a path stretching clear across the United States. Temps will temporarily drop, and it will get dark for a few minutes in the areas under the total eclipse. Animals will in some cases be confused, but we are aware of no effects on crops. Ag producers wouldn’t mind a polarity switch on prices next week. Like the eclipse, several things will have to fall in line to make that happen.
Corn futures were down 2.4% this week after a 1.6% hit the previous week. USDA’s crop condition ratings were better than expected on Monday night. The Brugler500 index was up 4 points for the week to 360, but still well below last year. USDA indicated US corn yield at 169.5 bpa, which was down 1.2 bpa from July, but nowhere near the 166.2 bpa that most of the trade had been expecting. The Brugler Virtual Corn Tour is wrapping up this weekend with results expected by Tuesday. The widely followed Farm Journal crop tour starts on Monday. These will either reinforce trade skepticism about the USDA figure or confirm it. The CFTC Commitment of Traders report on Friday showed spec funds backing off their net long position by 27,271 contracts in a week. They held a net long position of 39,802 contracts in corn futures and options as of August 15.
Wheat futures were down hard in the SRW and HRW contracts this week, while previous week bear leader Minneapolis HRS gained on the spreads. Chicago SRW lost 5.3%, with KC HRW down 6.1% and MPLS HRS 0.8% lower. The USDA reported an increase in the spring wheat conditions for a change during the week of August 13, but more than…