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October 2009 Archive for Hedging Corn and Soybeans

RSS By: Howard Tyllas, AgWeb.com

Howard Tyllas is currently a member of the Chicago Board of Trade and registered with the Commodity Futures Trading Commission as a floor broker and as a Commodity Trading Advisor.

November Soybeans Daily Numbers & Trade Ideas for 10/28/09

Oct 28, 2009



This report was sent to subscribers on 10/27/09 4:00 p.m. Chicago time to be used for trading on 10/28/09. Everything is done by Howard Tyllas, no program or black box.

November Soybeans

After the close on 10/28/09: My support was 9.59, just .00 1/4 from the actual low, and my pivot acted as resistance and was 9.78 3/4, just .00 1/4 from the actual high.

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November Soybeans Chart



"$10.00 is near term resistance, above that at $10.19 3/4 is next. First support is the gap at $9.64, bracket line just under that, $9.46 1/2 200 day moving average comes into play.

This is another example of the power of the 3rd time at the trend line being in this case a downtrend line, strong resistance. Selling against this line using a tight stop let's say a $.05 buy stop, rewards you over $.20 by the close, a very nice day trade. If this type of trade works only 1/2 the time, you are definitely the casino getting odds instead of the player betting this line will not hold first time at it.

November Soybeans for 10/28/09

Many reasons this year for the swings in price, aided by the late start to the growing season and a normal frost, when a later than normal frost was needed to optimize yield. Rain delays are credited for the support, as well as the weak $.

Bottom line: Bracket lines are areas that correspond with news events. Green and orange are when crops look good, red when the crops do not, or are delayed, aided by demand.

In my daily numbers on Tuesday my resistance was $.06 1/2 from the actual high; my support                was $.01 1/4 from the actual low.

Grains: Same thoughts as before, the worst news on harvest is in, grain rally has stifled demand, and crops look good. Any damage should hit soybeans before corn, and soybeans like to rally in November if you look at charts, which gives them the most support of row crops for now.

Gap at $9.64 is big for me and if November soybeans close below there, $9.30 is possible. I do not think we will break $9.64 before the report, and I think if bearish it will test $9.30. Then we will see if that is the bottom going forward. I did all right staying short corn, buying some beans near the close and now have long 8 beans and short 15 corn. Numbers were spot on. SELL rallies, but be careful extremely oversold corn and soybeans now. Almost dead market tonight, no volume pushed the market on air to get the sell stops below the day's low in beans.
 

 
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           May Your Next Trade Be The Best                          

                     Howard Tyllas            

   Tel.1-312-573-2699, 1-312-961-4390



Disclaimer:     No guarantee of any kind is implied or possible where projections of future conditions are attempted. Futures trading involve risk. In no event should the content of this be construed as an express or implied promise, guarantee or implication by or from Howard Tyllas, that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are no indication of future performance.

 

November Soybeans Daily Numbers & Trade Ideas for 10/26/09

Oct 25, 2009


This report was sent to subscribers on 10/24/09 8:00 pam. Chicago time to be used for trading on 10/26/09. Everything is done by Howard Tyllas, no program or black box.

November Soybeans

After the close on 10/22/09: My support was 1068.50 FG, just 1.50 from the actual low, and my resistance was 1099.00, 7.25 from the actual high. Look at my comments though and you will see I thought the gap support would hold and we would go 1/2 way up to the resistance at 1091.50, only .25 (1 tick) from the actual high. 

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10.31                         Resistance

-------------10.01        Pivot

  9.71

  9.64 FG

 

Trend             

5 day chart.……….. Up                         

Daily chart   …….…Sideways            

Weekly chart …….. Sideways      

Monthly chart ….... Sideways $9.47 is the 200 DMA

 ATR 26 1/4              Balanced 61%

November Soybeans for 10/26/09

      Also note the high and low on the chart on Friday was the exact high as well as the next downtrend line below acted as near perfect support. This is another example how what was resistance turns into support when the market is trading above it.

      Many reasons this year for the swings in price, aided by the late start to the growing season and a normal frost, when a later than normal frost was needed to optimize yield. Rain delays are credited for the support, as well as the weak $. Bottom line: Bracket lines are areas that correspond with news events. Green and orange are when crops look good, red when the crops do not, or are delayed, aided by demand.

 

      In my daily numbers on Friday my resistance was $.03 from the actual high; my support was $.07 from the actual low. 

Grains: Outside markets hit the wall of resistance in all the markets I cover on Friday, and profit taking was evident. Look at all my charts and even the strong markets on Friday closed well off their highs. Grains still posted nice gains for the week and my thoughts SX would test $10.31 and CZ at $4.11 1/4 was seen on Friday, with SX barely holding unchanged on the day with CZ closing without question lower for the day after making a new high for the run.

 

Is the high in? I thought last week we would be close to a top and I tried to carry a small short position and that proved to be wrong. Selling resistance for a day trade proved to be the right thing to do daily. Big moves in the $ and crude oil, and wetter colder forecasts into early November was all that was needed to push the grains to the resistances. At this price level coupled with Friday's action I would dare to say that the high is in for now.

 

Here are the reasons I think the high is in:

The chart in SX shows the 3rd time at the line failed but I would have liked to have seen a lower close too. This chart and the fact that we are delayed in harvest are vulnerable to favorable harvest weather that would selloff with little buying down to the next support level.

Rally has slowed corn export sales and now poultry producers are back in the red.

Every day I read reports of corn and soybeans yields as tremendous or at the least exceeding expectations.

I believe crude oil has topped or at least has gotten ahead of itself in price compared to fundamentals.

Wheat is pricing itself out of the world export market with Chicago futures higher than EU wheat on the Matif exchange.

Years with extremely wet Octobers are typically followed by drier than normal Novembers.

Since this is a futures market, the adverse weather for the next 7 days has probably been priced in already.

CRB failed to hold above the 50% retracement of 7/08 highs to 10/08 lows.

Beans rallied $1.40, wheat up $1.35, and corn $.86 which is at the high end of rallies in autumn.

 

Barring more continued bullish weather forecasts, and the possibility that the crude oil rally is not done with the dollar losing more value, we should start to work our way lower. Slow harvest, concern with quality, and fund buying might slow the speed of the downdraft in the near term until at least 60% of the crop is out of the ground and quality is more confirmed.

 

I want to sell SX looking for a retest of the gap at $9.64, SX10 retesting the gap at $9.49, and sell corn (CZ) looking for a retest of $3.70. I would rather sell rallies at resistance but would sell the pivot too if the dollar is firm and crude oil is down. Why look at other markets? Normally I trade what I watch, not sell grains because crude oil is going down, if I thought crude oil was going down I would sell crude oil, not sell grains and watch corn and beans rally as crude oil continues to go down. But in the current situation, much of the strength in price of grain comes from fund buying partly based on asset allocation and weak dollar. If that goes away, grains should shed some price as a result. If the dollar loses value that would underpin markets that otherwise would be selling off.

 

The 5 week rally in corn is still valid on the chart as well as the 3 week rally in soybeans. On Monday if grains gap lower, that could signal a correction. I bought 4 soybeans that averaged $10.12 against 10 corn I am still short, I bought the 3 CZ at $4.02, bought the other 4 back at $3.95 1/2 since they trade the mini's until 1:45pm and they were selling for $.01 1/2 under the "big contract" low of the day. I plan on completely relying on my numbers for direction, but would like to sell my soybeans higher (maybe going short too) and stay short my corn.  

 
Want to know what I think for tomorrow?     

The 8 markets now covered daily are November soybeans, December corn, November crude oil, December S&P, December Euro FX, December gold, and November natural Gas and December cattle .

My numbers usually are sent at least 12 hours ( via your email ) in advance of the next day open outcry session. Subscribers use them as best suited to their own needs and sometimes that involves the overnight trade.

 Find out why people from Canada, Germany, India, Switzerland, and the UK keep renewing this service.

HowardTyllas Daily Numbers & Trade Ideas cover 8 markets for less than $10 a day,

HowardTyllas Daily Numbers & Trade Ideas is designed to help you plan your trading strategies for the coming day.

$199.00 USD for each month, renewable monthly

 HowardTyllas Daily Numbers & Trade Ideas $199.00 monthly

 HowardTyllas a weekly newsletter $479 yearly

Feel free to email with any comments or question you:  www.howardtyllas@howardtyllas.com

 

www.farmerhedge.com 

www.howardtyllas.com          

www.futuresflight.com 

 

           May Your Next Trade Be The Best                          

                     Howard Tyllas            

   Tel.1-312-573-2699, 1-312-961-4390

Disclaimer:     No guarantee of any kind is implied or possible where projections of future conditions are attempted. Futures trading involve risk. In no event should the content of this be construed as an express or implied promise, guarantee or implication by or from Howard Tyllas, that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are no indication of future performance.

 

 

 

Daily Soybean Numbers & Trade Ideas for 10/19/09

Oct 18, 2009



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This report was sent to subscribers on 10/17/09 8:00 p.m. Chicago time to be used for trading on 10/19/09. Everything is done by Howard Tyllas, no program or black box.

 November Soybeans

After the close on 10/16/09: My support was $.03, from the actual low, and my resistance was $.02 1/2 from the actual high.

Online Readers Please Note: Most services use at least 6 supports and 6 resistances for 1 session, what good does that do you, which number do you actually use? I use 1 or 2 support numbers and 1 or 2 resistance numbers. I did not cherry pick this market today; most of the markets I covered today had similar results. My subscribers have been praising me for the accuracy they consistently have shown, which is a confidence builder that leads them to rely on them as a valuable tool in their trading. This is also evident in the 90 to 100% renewal rate of existing customers. Some have been with me for 12 monthly renewals, most for more than 8 months. 

Do yourself a favor and subscribe to the same daily numbers I use trading an actual $1 million dollar fund account.

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10.18 3/4

  9.99

-------------9.85            Pivot

  9.71                       

  9.64 FG

    Use the same numbers as used on 10/16/09

Trend             

5 day chart.……….. Up                         

Daily chart   …….…Sideways            

Weekly chart …….. Sideways      

Monthly chart ….... Sideways $9.47 1/2the200DMA

 ATR 26 3/4              Overbought 72%


November Soybeans Chart




November Soybeans for
10/19/09

Last Tuesday we traded $8.84 1/4 on the low, and 6 days later on Tuesday we posted a high of $10.12 1/4. This $6,400 a contract move to start October is in line with what you see on the chart all year in 2009.

 

Many reasons this year for the swings in price, aided by the late start to the growing season and a normal frost, when a later than normal frost was needed to optimize yield. Rain delays are partly credited to the support recently. Bottom line: Bracket lines are areas that correspond with news events. Green and orange are when crops look good, red when the crops do not, or are delayed, aided by demand.

In my daily numbers on Friday my resistance was $.02 1/2 from the actual high; my support was $.03 from the actual low. 

 

Grains: Stop and go harvest is not a disaster, but looks like it is not meeting the needs of fall export commitments, and certainly the strong outside markets is not helping the bears either.

 

This Monday's weekly crop progress report (after the close) should show a bigger lag in crop progress versus the average, but the way the chart looks after last week's action, the delays have been priced in already. I know my producers are ready to push harvest along whenever weather conditions allow. Looks like what I said a while back, soybeans should be sold and brought to market taking advantage of the high price and inversion, with no incentive of holding for higher prices in the bin like they can do with corn by selling March and collecting the extra $.04 per bushel per month. There is not enough room "on farm" to store the entire crop so a decision must be made on what to bring to market.

 

I still feel like "big crops get bigger" and last Thursday's export numbers show demand was slipping in corn and wheat, so I want to sell rallies this week at resistance.  I have some short corn on still, but no other position going into the weekend.

 

Here are 2 "fundamental news" that are worth mentioning to you:

The Soybean and Corn Advisor issued South American production estimates,

pinning soybean production at 125 mmt, up 30% from 08/09 as Argentine crops  

recover from last year’s extreme drought and as beans gain acreage across the

continent. The SCA estimates Brazilian corn production at 53 mmt, up from 50 mmt

last year, and he expects Argentine corn production to total 14.5 mmt,

 up from last year’s 13 mmt crop.

 

Informa issued its 2010 acreage forecasts. The group expects farmers to

add 3 million acres in corn to reach 89.4 million acres. They expect 76.8 million

soy acres, down 700K acres from this year. Wheat area is expected to

lose 1.7 million acres, totaling 57.4 million acres. They expect a 13% decline

in variable costs for corn and a 4% drop for soybeans.


Read a new Article in Futures Magazine: October 2009 issue

 By: Howard Tyllas Executing a butterfly put spread (in Crude Oil)

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The 8 markets now covered daily are November soybeans, December corn, November crude oil, December S&P, December Euro FX, December gold, and November natural Gas and December cattle .

Subscribe and you will be prepared for Sunday night's trade,  be able to know what I am thinking on a daily basis, and you will have entry and exit points for you to use to execute YOUR trade ideas. I do my best to let my subscribers know what trades I have on as of that writing, and what trades I am looking to do.   

My numbers usually are sent at least 12 hours ( via your email ) in advance of the next day open outcry session. Subscribers use them as best suited to their own needs and sometimes that involves the overnight trade.

Find out why people from Canada, Germany, India, Switzerland, and the UK keep renewing this service.

The reason I sell the numbers on a monthly basis, is that I make my money the old fashioned way, by earning it. When my subscribers keep my service I know that I am truly helping them. In addition, some people due to work load, vacation, or need to take a break, I do not want to charge for what is not needed at that time.

HowardTyllas Daily Numbers & Trade Ideas cover 7 markets for less than $10 a day,

HowardTyllas Daily Numbers & Trade Ideas is designed to help you plan your trading strategies for the coming day.

$199.00 USD for each month, renewable monthly

 HowardTyllas Daily Numbers & Trade Ideas $199.00 monthly

 HowardTyllas a weekly newsletter $479 yearly

Feel free to email with any comments or question you:  www.howardtyllas@howardtyllas.com

 

www.farmerhedge.com 

www.howardtyllas.com          

www.futuresflight.com 

 

           May Your Next Trade Be The Best                          

                     Howard Tyllas            

   Tel.1-312-573-2699, 1-312-961-4390



Disclaimer:     No guarantee of any kind is implied or possible where projections of future conditions are attempted. Futures trading involve risk. In no event should the content of this be construed as an express or implied promise, guarantee or implication by or from Howard Tyllas, that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are no indication of future performance.

WASDE - 475 October 9, 2009

Oct 09, 2009



45 minutes prior to the opening: I would call the opening mixed maybe better in soybeans and corn, mixed to lower in wheat.


WASDE - 475      October 9, 2009


OILSEEDS:  U.S. oilseed ending stocks for 2009/10 are
projected at 7.7 million tons, up 0.4 million from last month as
larger supplies are only partly offset by increased exports. 
Total U.S. oilseed production is projected at 96.1 million tons,
up 0.3 million from last month as higher soybean,
sunflower seed, and canola production more than offset lower
peanut and cottonseed production.  Soybean production is
forecast at a record 3.250 billion bushels, up 5 million from last
month based on higher yields.  The soybean yield is projected
at 42.4 bushels per acre, up 0.1 bushels from the previous
estimate.  Total soybean supplies are forecast up 32 million
bushels due to increased crop production and beginning
stocks.  Soybean exports are raised 25 million bushels to 1.305
billion due to increased supplies, lower prices, and increased
global import demand, mainly for China.  Soybean ending
stocks are projected at 230 million bushels, up 10 million from
last month.

Prices for soybeans and soybean meal are projected lower for
2009/10.  The U.S. season-average soybean price range is
projected at $8.00 to $10.00 per bushel, down 10 cents on both
ends of the range.  The soybean meal price is projected at
$245 to $305 per short ton, down 5 dollars on both ends of the
range.  The soybean oil price range is projected at 32 to 36
cents per pound, unchanged from last month.

Global oilseed production for 2009/10 is projected at 425.4
million tons, up 2.6 million from last month.  Increased soybean
and rapeseed production are only partly offset by lower peanut
and cottonseed production.  Global soybean production is
projected higher with increases for the United States,
Argentina, and Paraguay only partly offset by lower production
for China.  Argentina soybean production is raised 1.5 million
tons to 52.5 million due to increased area as producers shift to
soybeans from other crops including corn and sunflower seed. 
China soybean production is lowered 0.5 million tons to 14.5
million due to lower harvested area as producers shifted more
area to corn.  Global rapeseed production is projected higher
mainly on increases for Canada and EU-27.  Production in
Canada is projected at 10.5 million tons, up 0.5 million based
on the most recent survey from Statistics Canada.  EU-27
rapeseed production is projected at a record 20.6 million tons,
up 0.6 million.  Global peanut and cottonseed production are
reduced mainly due to lower estimates for both crops for China.
 Other changes include lower sunflower seed production for
Argentina, higher sunflower seed production for EU-27, and
higher cottonseed production for India.

Global oilseed stocks for 2009/10 are raised 4.5 million tons to
66.0 million.  Soybeans account for most of the change, with
increases projected for the United States, Brazil, Argentina,
and China.  Rapeseed stocks for Canada and EU-27 are also
increased.  China soybean imports are raised for 2008/09 and
2009/10 to 40.7 million and 39.5 million tons, respectively.

 

WHEAT:  U.S. wheat ending stocks for 2009/10 are projected
121 million bushels higher this month as increased production
and lower expected use more than offset a 10-million-bushel
reduction in carryin.  Production is raised 36 million bushels
based on the Small Grains 2009 Summary report.  Feed and
residual use is lowered 45 million bushels on lower-than-
expected disappearance during the June-August quarter as
indicated by the September 1 stocks.  Exports are projected 50
million bushels lower as larger supplies in major export
competitors reduce prospects for U.S. wheat shipments.  If
realized, 2009/10 ending stocks would be a 9-year high at 864
million bushels.  The 2009/10 marketing-year average farm
price is projected lower at $4.55 to $5.15 per bushel compared
with $4.70 to $5.50 per bushel last month. 

Global wheat supplies for 2009/10 are projected 2.2 million tons
higher as a 4.4-million-ton increase in world production more
than offsets a 2.2-million-ton reduction in beginning stocks.
Foreign production is raised 3.4 million tons with increases in
several major exporting countries.  Production is raised 2.0
million tons for Canada as favorably dry, warm September
weather extended the Prairie growing season by as much as 3
weeks boosting yields for this year’s delayed crop.  Russia
production is increased 1.0 million tons based on higher
reported spring wheat yields, particularly in Siberia.  Production
is raised 0.6 million tons for EU-27 with increases reported for
Poland and Hungary.  Production is increased 0.5 million tons
each for Algeria, Australia, and Kazakhstan.  September rains
were favorable for flowering and heading wheat in Australia’s
western and southern growing areas where higher yields are
expected to more than offset losses from sustained dryness
and heat in eastern growing areas. 

Lower expected production in Brazil and Chile partly offsets
rising output elsewhere.  Brazil production is lowered 1.0 million
tons as continued heavy, late-season rains reduce prospects
for yields and quality.  Chile production is lowered 0.5 million
tons on lower reported area.  A number of small, mostly
offsetting, production changes are made in Sub-Saharan
African countries.

Global wheat trade for 2009/10 is projected higher with much of
the increase reflecting higher projected imports by Brazil and
exports by Canada.  Brazil imports are raised 1.0 million tons. 
Smaller import increases are also made for Bangladesh, Chile,
Saudi Arabia, and Ethiopia.  Partly offsetting is a 0.4-million-ton
reduction in imports for Algeria.  Exports are raised 1.5 million
tons for Canada.  Exports also are raised 0.5 million tons each
for Kazakhstan and Ukraine, and 0.4 million tons for Mexico. 
These increases more than offset the 1.4-million-ton reduction
for the United States.  Global consumption is raised 2.1 million
tons with higher expected wheat feeding in China, EU-27,
Brazil, and Russia; and higher food, seed, and industrial use in
Canada, Algeria, and Iran more than offsetting lower feed and
residual use in the United States and Ukraine.  Global ending
stocks are nearly unchanged at 186.7 million tons, up just 0.1
million from last month.

COARSE GRAINS:  U.S. feed grain supplies for 2009/10 are
projected higher this month as increased corn and barley
production and higher sorghum beginning stocks more than
offset lower corn carryin and reduced sorghum production. 
September 1 corn stocks, as reported in the September 30
Grain Stocks report, reduced 2009/10 corn beginning stocks as
higher corn use for ethanol, sweeteners, starch, and exports
boosted June-August use.  Corn production for 2009/10 is
forecast 63 million bushels higher with a 2.3-bushel-per-acre
yield increase more than offsetting a 700,000 acre reduction in
harvested area.  Total corn supplies are projected 42 million
bushels higher.

Total U.S. corn use for 2009/10 is increased 5 million bushels. 
Feed and residual use is projected 50 million bushels higher
reflecting the higher forecast yield and crop.  Food, seed, and
industrial use is also projected higher, up 5 million bushels, on
higher expected use for sweeteners with tight sugar supplies. 
Offsetting most of the increase in domestic use is a 50-million-
bushel reduction in projected exports.  Increased supplies of
feed grains in Canada and larger world wheat supplies are
expected to increase competition for U.S. corn exports.  Corn
ending stocks for 2009/10 are projected 37 million bushels
higher and just below the revised estimate for the 2008/09
marketing year.  The 2009/10 marketing-year average farm
price projection is unchanged at $3.05 to $3.65 per bushel.

Sorghum supplies for 2009/10 are projected 12 million bushels
lower as reduced production more than offsets higher
beginning stocks.  Production is forecast 26 million bushels
lower with reduced area and yields.  Beginning stocks are
estimated 15 million bushels higher based on the September 1
stocks.  Barley supplies for 2009/10 are raised 21 million
bushels based on higher estimated production from the Small
Grains 2009 Summary report.  With a 10-million-bushel
reduction in feed and residual as indicated by the September 1
stocks, ending stocks are projected at a 5-year high, up 31
million bushels from last month.  Projected 2009/10 farm prices
for sorghum, barley, and oats are all unchanged this month;
however, the barley and oats ranges are narrowed.

Global coarse grain supplies for 2009/10 are increased 4.7
million tons, mostly reflecting higher corn beginning stocks and
increased barley output.  Global corn beginning stocks are
raised 2.2 million tons with upward revisions to 2008/09
production for Brazil and South Africa, and higher reported
stocks for Canada.  Barley production is raised 4.4 million tons
with higher output in Russia, Algeria, EU-27, the United States,
Canada, and Australia.  Global corn production for 2009/10 is
lowered 1.5 million tons with reductions for China, Russia, and
a number of smaller countries only partly offset by increases for
the United States, EU-27, Ukraine, Canada, and several Sub-
Saharan African countries.  China corn production is lowered
5.0 million tons on confirmation that unusual heat and dryness
during late July and early August severely hampered corn
pollination in the western growing areas of the northeast. 
Increased harvested area for China partly offsets this month’s
yield reduction.

World coarse grain imports and exports are both projected
lower for 2009/10 mostly reflecting reduced prospects for U.S.
corn exports, down 1.3 million tons, and lower expected corn
imports by Canada, down 1.5 million tons.  Other mostly
offsetting corn trade changes include lower imports for Chile
and higher imports for Colombia.  Reduced barley exports for
EU-27 are partly offset by an increase for Russia.  Global
coarse grain feeding is raised 3.5 million tons as higher corn
feed and residual use for the United States, China, Brazil, EU-
27, Mexico, Ukraine, and Colombia are only partly offset by
reductions for Canada and Chile.  Barley feeding is raised for
Russia, Algeria, Ukraine, Australia, and Canada.  Global
coarse grain ending stocks are nearly unchanged from last
month as a 2.9-million-ton reduction in corn stocks is more than
offset by a 3.3-million-ton increase in barley stocks.  Global
barley ending stocks are projected at a 5-year high.

RICE:  U.S. rice production in 2009/10 is forecast at 220.6
million cwt, 1 percent above last month due entirely to an
increase in yield.  Average yield is estimated at 7,115 pounds
per acre, up 64 pounds from last month.  Harvested area is
unchanged at 3.10 million acres.  Long-grain production is
forecast at 154.2 million cwt, 1 percent above last month, while
combined medium- and short-grain production is forecast at
66.4 million cwt, also up 1 percent.  The total rice export
projection at 96 million cwt is unchanged from a month ago;
however, exports of long-grain are raised 1.0 million, and
combined medium- and short-grain exports are lowered by 1.0
million.  Total rice ending stocks are projected at 46.6 million
cwt, 5 percent above last month.

The all rice season-average farm price is forecast at $13.00 to
$14.00 per cwt, down 65 cents per cwt on both ends of the
range.  The long-grain season-average farm price range is
projected at $11.75 to $12.75 per cwt, down $1.15 per cwt on
each end of the range.  The combined medium- and short-grain
farm price range is projected at $17.50 to $18.50 per cwt, up
$1.25 per cwt on each end.  Large exportable supplies of long-
grain rice among the major Asian exporters, particularly
Thailand, Vietnam, and Pakistan, will pressure prices, while
tighter global supplies of medium-grain rice will help to support
prices.

Projected global 2009/10 rice production is nearly unchanged
from a month ago; however, there are a number of offsetting
changes.  Production projections are lowered for Bangladesh,
Colombia, the Philippines; but raised for the United States,
China, and a number of Sub-Saharan African countries.  The
2009/10 Bangladesh rice crop is projected at 30.0 million tons,
down 1.0 million from last month.  China’s rice crop is raised
900 thousand tons to 136.0 million, the largest crop since
1999/00. Global exports are projected at 29.8 million tons, up
nearly 0.5 million largely due to an increase for Vietnam. 
Global consumption is up slightly from a month ago with levels
raised for China and a number of countries in Sub-Saharan
Africa; and lowered for Bangladesh, and Indonesia.  Global
ending stocks for 2009/10 are projected at 85.9 million tons, up
1.0 million from last month, but down 4.8 million from 2008/09.


SUGAR:  Projected 2009/10 U.S. sugar supply is decreased
8,000 short tons, raw value, from last month.  Imports of
specialty sugar, announced in September along with the
2009/10 tariff rate quota, nearly offset lower beginning stocks. 
Projected Louisiana sugar production is unchanged. Despite an
increase in forecast total sugarcane production in Louisiana,
assumed higher use of sugarcane for seed and lower sugar
recovery from sugarcane  are offsetting.

Estimated 2008/09 U.S. sugar supply is reduced 97,000 tons
from last month, based on preliminary full-year data.  Sugar
production is lowered 63,000 tons, mainly due to lower beet
sugar production.  Imports are decreased 34,000 tons as lower
imports under the tariff rate quota more than offset higher other
imports.  On the use side, deliveries for non-food uses are
lowered 14,000 tons based on the pace through August.

Projected 2009/10 Mexico sugar supply is decreased 120,000
metric tons, raw value, from last month.  Production is lowered
100,000 tons in line with producer projections in Mexico. 
Beginning stocks are lowered 20,000 tons, as Mexico=s exports
in 2008/09 were higher than expected.

LIVESTOCK, POULTRY, AND DAIRY:  Total U.S. meat
production for 2009 is raised as higher pork production more
than offsets lower beef and turkey production.  Pork production
is raised mainly due to higher third-quarter slaughter and
significantly higher weights due to favorable summer weather.
The beef production forecast is reduced on lower expected cow
slaughter.  The turkey production forecast is reduced on slightly
lower third-quarter output.  Broiler production is unchanged. 

Meat production forecasts for 2010 are lowered from last month
as higher beef production due to larger feedlot placements in
2009 is more than offset by lower pork and turkey production. 
The Quarterly Hogs and Pigs report, released on September
25, indicated producers plan to farrow fewer sows during the
remainder of 2009 and into 2010, which, coupled with fewer
imports of hogs from Canada results in a lower production
forecast.  Turkey hatchery data indicates a slower expansion in
production during 2010.  The broiler production forecast is
unchanged from last month.

Red meat and poultry export forecasts for 2009 and 2010 are
mostly unchanged from last month. Turkey exports are raised
for 2009.  Import forecasts for beef for both 2009 and 2010 are
reduced reflecting lower expected beef supplies in Oceania. 
Pork import forecasts are raised slightly for 2009.

Price forecasts for cattle, hogs, broilers, and turkeys are
lowered for fourth-quarter 2009.  Weak demand and large
supplies of meat continue to pressure prices.  Prices are
expected to remain under pressure into next year and 2010
forecasts are reduced from last month.  The egg price forecast
is unchanged for fourth-quarter 2009 and throughout 2010.

The milk production forecast is raised for 2009 and 2010 as
milk per cow is forecast higher and the rate of decline in cow
inventories is lowered in 2010.  Import forecasts are raised as
butterfat and cheese imports are stronger than expected. 
Stronger world dairy prices and a weak U.S. dollar are
expected to increase export demand for U.S. dairy products. 
The commercial fat basis export forecast is raised for 2010,
and on a skim-solids basis, commercial exports are raised for
both 2009 and 2010.  Net removals reflect adjustments in CCC
and Dairy Export Incentive Program (DEIP) activities for nonfat
dry milk (NDM), butter, and cheese.  Firmer domestic and
export demands are expected to support prices for cheese,
whey, and NDM.  However, butter prices are forecast lower as
supplies remain large.  Class III prices for 2009 and 2010 are
raised from last month and Class IV prices are raised for 2009.
 The all milk price is forecast at $12.35 to $12.45 per cwt for
2009 and $14.70 to $15.60 for 2010.

COTTON:  The 2009/10 U.S. cotton forecasts include lower
production and offtake compared with last month.  Beginning
stocks are raised marginally to reflect the U.S. Census
Bureau’s final estimate of 2008/09 ending stocks.  Production is
lowered 3.3 percent to 13.0 million.  Texas accounts for most of
the decline; production in the Mississippi Delta states is
reduced 85,000 bales.  Domestic mill use also is lowered,
reflecting the continued sluggish pace of U.S. textile exports. 
Exports of cotton remain unchanged at 10.5 million bales. 
Ending stocks are reduced 200,000 bales to 5.4 million.  The
forecast for the marketing-year average price received by
producers is reduced 2 cents per pound at the top of the range
to 49 to 57 cents.

The world 2009/10 cotton forecasts mainly include small
adjustments, with the most significant changes occurring in the
China balance sheet.  World beginning stocks are raised 1.0
million bales, reflecting higher stocks in China resulting from an
upward revision in 2008/09 production.  A reduction of 1.0
million bales in China’s 2009-crop production forecast more
than offsets the higher beginning stocks; adverse harvest
weather is reported to have affected yield prospects in the
Yangtze region.  Lower production estimated for China, the
United States, and Uzbekistan is partially offset by increases
for India and Argentina.  World consumption, trade, and ending
stocks are virtually unchanged.

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                     Howard Tyllas            

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Disclaimer:     No guarantee of any kind is implied or possible where projections of future conditions are attempted. Futures trading involve risk. In no event should the content of this be construed as an express or implied promise, guarantee or implication by or from Howard Tyllas, that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are no indication of future performance.

 

 

Daily Numbers & Past Ideas

Oct 05, 2009



November Soybeans for 10/5/09

9.18

8.97 3/4

-------------8.81 1/4      Pivot

8.64 3/4                       Support

8.43

 

Trend             

5 day chart.……….. Down                       

Daily chart   …….…Sideways            

Weekly chart …….. Sideways      

Monthly chart ….... Sideways $9.46 is the 200 DMA

 ATR 26                    Maximum Oversold 0%


November Soybeans Chart


The downtrend line is resistance; green bracket line at $8.80 will be pivotal this week, March low is support.

 

I continue to say "Downtrend line has not been broken (jabbed above briefly on Thursday to get the stops) and continues to be resistance. Chart is also bearish because the gap was never filled at $9.41 and remains major resistance along with the 200 day moving average".


 

November Soybeans for 10/5/09


"
I want you to notice how the soybean market rallied almost exactly to the downtrend line, and I have pointed out to you many times how the 3rd time at a trend line has a high percentage of holding the first time tested and usually pulls back to where it finds near term support". Any rally near that line should be sold with a buy stop just above to protect.

 

I have been saying in my chart comments how the orange bracket line was support at $9, what was support is now resistance.

 

In my daily numbers on Friday my pivot acted as resistance and was $.01 1/2 from the actual high; my support was $.07 from the actual low. 

 

 
10/5/09 Grains: The beating that soybeans took did not surprise me. I told my producers and in this service that I advised to hedge their entire crop, and they did lock in 2010's crop too. This year's corn crop has been hedged since $4.48, and soybeans were mostly covered near $10 and in the last month the rest near $9.60.

 

I have told you to play the short side for months. The fundamentals point lower and more important, the charts are breaking down at $9. Corn defies gravity, and the fact that it is so buoyant, makes it a harder and erratic trade for now. Much has to do with corn/soybean spreading. I noticed a much higher soybean volume than corn on Friday which is unusual. I would think we would get a bounce from here seeing as how the market is at maximum oversold, which means the selling has been intense and a bounce higher is near. I would not press the short side from here but would rather sell a corrective rally.

 

With 20% of the soybeans harvested it looks like there will be higher production that will offset demand that I feel is being understated. I still think that spreads should invert to spur farmer selling enough to meet record 1st quarter demand. With S. America starting off looking to advance a record 28 MMT, soybean stocks could exceed 400 million bushels for 2010/11 unless some US planted acreage is set aside. I want to buy the Jan 6 cents under the March (SF-6/SH).

 

I want to sell any rally in soybeans and wheat. I have been telling you that soybeans were overpriced in relation to corn, and the market reflects that almost daily since the September 10 report. With that in mind I am thinking soybeans to corn should be around 2.6:1 for the near term, and since I can see soybeans going to $8 to $8.30, corn would be $3 to $3.10. Last half of October should press corn lower unless yields are disappointing.

 

Lower prices, and smaller trading ranges going into year-end unless weather adversity hits S. America, and if that happened it would be a game changer.  

 

9/24/09 Grains: Not much I can say today that I did not say yesterday. My new thoughts think the bears might have to wait a week or two before they will get rewarded. Slow harvest is delaying restocking of the near empty pipeline, and cold forecasts are supportive, but I think that investment buying that happened in 2007 and 2008 will not be seen in late 2009 and not help the bulls case.

 

I have made it clear where I stand on the fundamentals and what side of the market I want to be on. I am also aware of the power of the investor (like in crude oil rallying to $147 on almost weekly bearish fundamental reports) but as I said I am discounting asset allocation and think it will wait until next year before committing. Crude oil has hit a wall at $75 and I do not see a big investor push to do so. If this is the case that market looks to have some correcting to do from here. This is not friendly to the grains either.

 

I covered my short corn at $3.24 and sold it at $3.26 1/2 and $3.31 1/2. Covered the beans for a profit and resold again at $9.22.


9/16 Grains: With 3 billion bushels of corn and 600 million bushels of soybeans at risk, the market had its best summer 1 day gain in corn and 2nd best for soybeans not on heat but on the cold!

 

Unlike private forecasters, Crop Cast says it is only a 1 in 5 chance for a September frost and points out that the GFS model typically is colder than other models and not as consistent. Regardless, shorts were vulnerable to this scenario, and the volume speaks of short covering. Farmers were selling old crop corn today, but little soybeans.

 

I am still standing on the "big crops get bigger" side of the "tug of war", but realize that tomorrow if the frost prediction gets stronger, we can rally to $3.76 in corn and $10.18 in soybeans TODAY. If they take some of that out of the forecast, we can be down $.18 in corn and $.30 in soybeans TODAY.  

 

If only Dakota/MN growing season is cut short by Sept frost, then we’re still too high priced as the vast majority of US CN/BN area will keep adding bushels into early Oct and in so doing partially or wholly make up for losses in the northwestern Midwest.  Remember that landmark early frost in 1974 not only occurred on Sept 4 in MN/Dakota/IA but struck again in mid Sept in central and eastern Midwest.

 


Attention all Producers

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www.farmerhedge.com 

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           May Your Next Trade Be The Best                          

                     Howard Tyllas            

   Tel.1-312-573-2699, 1-312-961-4390



Disclaimer:     No guarantee of any kind is implied or possible where projections of future conditions are attempted. Futures trading involve risk. In no event should the content of this be construed as an express or implied promise, guarantee or implication by or from Howard Tyllas, that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are no indication of future performance.

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