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February 2013 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.

Hedging March Corn and Soybean Ideas for 2/25/13

Feb 26, 2013

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Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 36 years.

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This report was sent to subscribers on 2/23/13 3:30 p.m. Chicago time to be used for trading on 2/25/13.

March Corn

After the close recap on 2/25/13: My resistance was 6.97 3/4, .02 1/4 from the actual high, and my support was 6.83 3/4, .03 3/4  (pivot was .02 1/2 in open outcry) from the actual low.

All charts and numbers for 2/26/13 have already been sent to subscribers at 4:30 pm.

               March 2013 Corn                                             

                                 
7.01 ¼                                                             
6.97 ¾                                                              
-----------6.91 ¾              Pivot                                      
6.83 ¾                                                       
6.78 XX                                          
                                          
5 day chart....         Down from last week same day                                                            
Daily chart   ...       Down                          
Weekly chart ...     Sideways                 
Monthly chart ....  Sideways           7.11 is the 200 DMA
ATR 10 ¾                                              Oversold 11%
   

For 2/25/13: I still say "January low of $6.78 and then the gap at $6.64 are supports, and the downtrend line at the bracket line at $7.08 ¾ is major resistance".     

In my daily March corn numbers on Friday my resistance was .01 ½ from the actual high; my support was the EXACT actual low. 

2/25/13:
 
Grains: The USDA Forum expect farmers to plant 77.5 million acres of soybeans that will yield 44.5 BP. They project the carryover growing to 250 million bushel and the price declining to $10.50. USDA expects farmers to plant 96.5 million acres to corn which will yield 163.6 BPA. That results in a 2.177 billion bushel carryover and an average farm price of $4.80. Argue with the estimates if you want, and bet on what you believe will be true, but I would rather bet on the possibilities seen in the charts, rather than predicting the outcome of this year's production. I will take advantage of the market price swings, and when I can risk a little at a good support or resistance level to make a good reward if the chart level holds, that is my way of trading a market. I do not need to make every penny of every move, it is more important to stay unemotional, and control risks.

With that being said, 2013 highs are already in unless a true weather event comes into the picture, and if   expectations are realized we will be at much lower price levels than where we are now.

Do you really want to know the reason why the market closed $.55 ¼ off its high? I could care less. Soybeans have become the "star of the show" lately, with corn and wheat sharing no role in it, they are just watching. It seems to me that the funds have targeted soybeans to focus their attention and money, but not like in the past by accumulating a massive position, they seem to be very short term in their objectives. That is still helpful to me as a trader this time providing a sell at a gap bracket line resistance, and for all of my producers who again this time rolled up their $14 and $14.20 puts up to $14.50 and $14.70. They did it in the last 3 trading days, capturing the $.30 of $.50 free and clear, and ending the game of deal or no deal. They do not care to gamble by saving $,20 if the market in 8 weeks will be above $14.70, or risking the $.30 profit in your hand now and do nothing and it expires below $14.20 (or $14). It is the $.30 in your hand that matters, not continuing the gamble and risk $.30 to make the last $.20. They also know that if the market never rallied, there would not be $.30 profit to capture. New subscribers should also note, my producers have been adding income to their original hedges that were rolled over since November options expired.

Now after a couple of years of watching opportunities come and go, capturing some, they seem to be more than willing to capture whatever the market gives them, and are confident what they are doing is now the right approach to take. Does not matter that the market might have rallied after rolling up their puts, and it does not matter that the market went down making it around $.07 more expensive to roll it up now, they knew it was the right thing to do and that is why they did it. My producers have all been in control of what they do, and why they do it, and understand the strategy to be confident, slow down risk, and keep emotions to a minimum. Yes, they still have questions about the "what if's" in the options they have, like what they will be worth if we are at a certain price in the future. I really am proud of them now, they all progressed at their own speed, definitely are in control of what they do, and now have learned what they need to be "self directed". They still hear the "chatter", read the news, listen to the radio, and now look at those around them as a "herd" and remember when they were one of them. They know they have an advantage they never had before, having learned what I have to offer. I am not a farmer, I do not make money on projecting what yields are (but I am allowed to guess too, when guesses are even possible), I do not have satellites, or a platoon of foot soldiers to scout 175 million acres (good luck with that), or "inside information" about SA or the PRC. I am just a trader, an option expert, and have earned the wisdom from my experiences. The value of a mentor, Priceless! If only I had one, it would have been much easier.           

Nothing for producers to do now since they have rolled their puts up to the call strike sold, and they still have their original protection and now have something like the May $14.70/$13.60 put spreads. 2013 hedges have been rolled down already, but it is never too late to do so. As I have been saying, all unhedged soybeans should have some kind of an "at the money" put protection, and ... subscribe. 

Soybeans posted a new high for the run and closed lower which bodes well for another down day to follow on Monday. Chances are good for the market to go down and test the gap at $14.24 ½ this week which is also about a 50% pullback from low to high. I want to take the sell signals only and risk $.06 on the idea using a buy stop to protect. 

I keep saying the same story, the corn market will continue to bleed as bulls are still watching the drought areas get a little better, but they still believe in the weather services that call for trouble again this year for production. As the days go by, their story continues to erode, and to bet money on the weather but you lose money on the idea as corn goes down. It might take until June before the "weather" provides the rally the bulls are looking for, the trouble is, that rally could bring us back to where we are now. Producers continue in the "bonus round" since the December options expired, and there have been many opportunities that each producer have taken advantage of some, and now once again will make an average of $.20 if the market can get to at least $7.10 on expiration in 8 weeks from now. If it rallies whenever, you know you can... Subscribe Now!

It did not matter what soybeans have done lately, corn has looked tired and unable to show any sign of life "to the upside". I still say supports look more likely to be taken out in time, rather than the resistances. $6.78 is solid support for the March contract, and then nothing until the gap at $6.64. Bulls need to get above the strong resistances found at $7.08. Until $5.47 ½ is broken in the December contract, it remains as support to be respected. Once that goes, there is really no support until $5.37, after that it is the 2012 low on the chart made in June at $5.11. Bracket is strong resistance at $5.70 ¾. December ... subscribe now. New subscribers who are not 100% hedged 2013 corn should consider hedging here (my service is hedged 100% from $6.40 to $6.60), my gamble would be to try and hedge $.10 higher, but if it went below $5.47 ½ I would not hesitate further. It is reasonable to get the first $.80 upside "free and clear".  

Corn would do well if it can stay inside the bracket lines moving sideways, and with weather permitting it will breakdown to the next support level. I prefer to take the sell signals, but would trade without bias and risk $.03 ½ on any idea using a stop to protect. I have been bearish corn and soybeans since September 2012, and I continue to have that stance for both old and new crops.  

2/22/13:

Grains: Soybeans continue to bang on the door at $15.03 ¾, but so far the gate is locked at $14.98. They need to get past there in order to be able to run to the highs of November 2012 at $15.45. I will never bet on the long side below that strong bracket line, but have no problem buying at $15.05 another day after the highs are taken out and if we see a pullback. Many times when a bracket line like this is violated, in a day or two later the market has a tendency to come back down and test what was resistance and is now support ($15.03 ¾). After Friday expiration is out of the way today, Monday can be the day where the market finally "busts through" its resistance, or gives up and implodes. I am always a willing seller at these lines, but the more days it is near the resistance, the less aggressive I become and reflected by taking less risk by selling fewer contracts. That way when it finally does break through, I have less contracts on. The first time up maybe 5 contracts let's say, then 4 the next, until finally it is only 1 every time. If I can get a pullback on 5 contracts, and then another pullback on 4 contracts, and maybe the third time I get stopped out on 3 contracts. Making more than $.06 on the winners, and only losing $.06 on the loser, I am way ahead of the "game". My approach is like that of a casino operator, I want to play the game and make sure the odds are in my favor.

Corn on the other hand continues to look "heavy" and even with the strength in soybeans, has brought little support for corn and wheat for that matter. New crop soybeans have also disconnected from old crop  soybeans, failing to post gains on a strong day in the old crop. If old crop soybeans could rally above $15.03 ¾ and extend gains, that should have at least a supportive underpinning for the rest of the grains. Sure, old crop soybeans could keep going higher and the rest slide lower, but it is supportive. Put it this way, if soybeans go higher and corn and wheat go lower, they would go even lower or at a faster pace without soybeans holding a "light" shinning on the upside. Do not buy corn because you think soybeans are going higher, buy soybeans. And if you think corn is going lower than sell corn not soybeans. Trade what you watch and watch what you trade. If you buy corn because you think soybeans are going higher, you could be watching corn go down and lose money as you see soybeans indeed going higher.

The December corn $5.90/$5.50 put spread settled ...subscribe now. Use any combination to perfectly reflect what you are thinking and want, or NEED to do. 

November soybeans have come back nicely tonight and are waiting to see if the March contract can drag it higher. Current hedges look adequate for now, new hedges should be entered though. If we could rally $.50 I would look to extend down coverage $.40 and sell a $.60 call spread to almost pay for it.

Lastly, soybeans just "filled the gap" and is free to move in either direction. Corn is only up $.02 showing no enthusiasm watching soybeans rally. In open outcry if soybeans are trading above the gap, I would expect corn to be no worse than firm, but it is still vulnerable to erode lower.     

I continue to want to day trade the numbers without bias and risk $.03 ½ in corn and $.06 in soybeans using a stop to protect any idea.

2/21/13:

Grains: Soybeans continued its pursuit in testing the resistance gap at $15.03 ¾. But the 3 day $.90 rally from the low, fell short once again to touch let alone get above it. This test of the bracket line "triple top" is always a "sell" the closer you get to it. Bulls should be more than happy to take profits at this objective, rather than watching it go back down giving back everything made as was the result the last 2 times tested. Time will tell if this is the time the bulls will be able to break through and go higher, but I NEVER bet on that occurrence to happen. I always look at supports and resistances will hold, until they do not. Whatever caused the soybeans to rally is irrelevant, the fact it did is all that matters, and the ability to take advantage and improve your hedge position or take speculative trades (in this case sell against the bracket line resistance) that have little risk if the line fails and good reward when it holds.      

The last 7 trading days have produced closes in March corn that were within an $.08 range. It did not matter that the March soybean contract closed $.65 higher in the last 4 days alone. Trade what you watch, and watch what you trade, these markets are on its own. It is really futile to look at the fundamentals known and unknown, and form an opinion valid enough to bet on. Weather is the biggest fundamental, and that is an ever changing challenge to predict, with predictability based partly on science and partly unpredictable "what if's". Last year we started off nicely with no sign of a drought, and then it started but nobody could predict how long or severe it would be, but mostly "reported" what was already seen and what was the "forecast" in sight. Forecasts, NOT certainty. So as a trader (speculator) and same for a hedger, betting more than a "what if" bet on weather is not the prudent thing to do.

So as I admitted to you since last March, I am "off" the fundamentals, and that stance has proved to be true, especially when you look at pre report corn guesses that were 750 MB apart in the survey of analysts, so if the analysts are totally in disagreement, how can you look at any of their guesses? That is like saying you will probably die somewhere between the age of 10 years old to 98 years old. That brings us back to the charts for facts, the actual facts of what has been support and resistance in the past, which is more than helpful in price discovery of what could be support and resistance in the future.  Gaps, bracket and trend lines have earned my respect from my beginning, and have always been the only "tool" that I can rely on, and allow me to risk money with a clear exit price to limit losses, and a clear objective when entering the trade idea.

My ideas of sideways ranges continues to be my view, I just do not see anything the next few weeks that could make us "breakout" from the established near term bracket lines. Both the corn charts are showing  sideways action at this lower level since January, and should continue to remain between the bracket lines. December corn clearly broke down first on the daily chart, but has yet to threaten the gap at $5.47 ½. At the same time it could not rally and threaten the many resistances found in March corn at $7.08 ¾ and below. That means that there are plenty of sellers who would like to "cheerlead" it through there and have a chance to at least try and fill the gap at $7.22 ½, but that wall of resistance within $.10 is what encourage those who need to sell to at least start selling something. They remember it was just $6.78, and the bounce has been like a bowling ball.

Decades have taught me that farmer ownership is not "strong hands" because common sense and logic tells me that someone who owns grain and have no use for it except when sold, and the fact that they will be producing another crop, turns into very weak hands when downtrends continue for a few months. Last few years farmers who have waited and missed selling high prices, have not suffered from that bad behavior because the market has managed to rally the last few years for a variety of reasons, but gave them "second chances" or more to sell. You know my service has always said to manage risks, and services and producers who seek higher prices, should ALWAYS have a plan to sell to limit risks if the market goes down. These last few years farmers have made nice incomes, and they feel they now have "money to lose" and will ride out any downturns.  That is the bright side, but the dark side and truth is that with a good crop this year and next, we will be in a long term downtrend that will not see these levels for years. So in essence, farmers holding grain could be like holding gold in January 1980 when gold traded $850 the "all time high", and people who held gold (no different than a farmer holding unsold grain now) thought it would go higher and possible "double' in price. What happened was they watched gold go down below $300 in the mid 1990's and trade there for quite awhile, before the recent upturn the last 10 years. They waited about 33 years before they saw that $850 again, and then "doubled" in price about 3 ½ years later. Do you want to hold your grain for 33 years?     

As long as grain prices are "floating" at these already historically profitable pre planted corn and soybean prices to hedge, the farmers with deep pockets will continue to watch what the market will do, and without having some kind of hedge like ours, they will be victims of the "markets", instead of dying with a sword in our hand. I have literally seen thousands try and trade on the floor and could not last 6 months, and obviously the main reason for most of them was their lack of risk protection, and many because the "unimaginable" happened to them.

I continue to think rationing will be done in the cash market, NOT the futures market. You can see the funds appetite is not like it was before, and they are much more conservative in their participation, and they seem to not hold their positions too long. They have not shown any conviction in the fact they are not building a bigger position over time, but rather splurges of buying, and quick to sell for whatever their reasons. Bulls count on their support, I just do not see it with the positions they hold.

Those are my thoughts, you must think about what price levels YOU want to use as support and resistance, for entry and exit, and how much to risk as each opportunity presents itself. Maybe the USDA Forum will help Friday, but it is the price that puts money or takes it out of your pocket, and I always base it on the chart. The large majority of the time the chart levels we pick out are spot on as seen recently, and that is a good start, with the ones that were not adequate, would be able to be "morphed" to the next level.

I think that people with March options should exit today, especially if you want to adjust your new protection and get the upside back "at the money". If bearish, roll half and stay short the other half until Friday. Market has the potential to be volatile with the news coming out of the forum today and Friday, and the options expire on Friday.     

December corn has good support $.15 below, and strong resistance $.15 above, but producers who ran out of coverage below $5.80 do not have the luxury anymore to watch and see if $5.47 ½ will hold. If I was a bull I would still need to roll half of my puts down to $5.50 for more protection. You have the same chart I do, and you know if the market is higher it will cost you less, and lower it costs more. Follow your game plan as written in your journal, or change it and write the reason why.

We were ... subscribe now. Have a plan, make sure you can live with the risk and reward YOU pick out and use. Same hedge ideas apply to soybeans, look at the strikes and settlement prices, you clearly can see what will reflect your thoughts and ideas and risk parameters with what you have learned. 

I continue to want to day trade the numbers without bias and risk $.03 ½ in corn and $.06 in soybeans using a stop to protect any idea.        

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Hedging March 2013 Corn and Trade Ideas for 2/12/13

Feb 13, 2013

Sign up: Free Learn a better way to hedge for farmers

Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 37 years.

Sign up: Free 1 Day Trail of Daily Numbers & Trade Ideas

This report was sent to subscribers on 2/11/13 3:00 p.m. Chicago time to be used for trading on 2/12/13.

March 2013

After the close recap on 2/12/13: My pivot acted as resistance and was 7.03 1/4 the EXACT actual high, and my support was 6.92 3/4, .01 1/4 from the actual low.

All charts and numbers for 2/13/13 have already been sent to subscribers at 4:30 pm.

March 2013 Corn

7.22 ¾ FG
7.19 ½
7.13 ¾ near Downtrend Line
-----------7.03 ¼ Pivot near the 200 DMA
6.92 ¾
6.86 ¼
6.78 XX
5 day chart.... Down from last week same day
Daily chart ... Down
Weekly chart ... Sideways
Monthly chart .... Sideways 7.05 is the 200 DMA
ATR 11 ½ Ex. Oversold 2%

Daily numbers support, gap at $7.22 3/4 and the downtrend lines at $7.16 are resistances.

The 200 DMA is pivotal not only for the day, but the direction for long term trades too.

In my daily March corn numbers on Monday my pivot acted as resistance and was .02 ¼ from the actual high; my support was .02 ½ from the actual low.

For 2/12/13:

Grains: I am sure it is comforting to unhedged producers to listen to the services telling you all the reasons why corn should not be going down. Bulls thinking that betting on US crops will remain dry, and get another unfavorable year one way or the other, is not working the way they had thought. I laugh when I see someone bet more than a "what if" or "long shot bet" which is a very small amount, and cry when I think about a farmer who is betting his "paycheck" on it. Yes, they are betting whatever is unhedged. My producers hedge already reflects what part of the upside they want unhedged, and what protection they feel is needed, and with that foundation they only risk a "part of their income" not all of it. When using options the way they are, everything slows down which allows less emotion and much more control.

Bottom Line: The fundamentalists are making "wagers" based on fundamentals as seen through THEIR eyes, I make bets based on the charts that not only I, but everyone can see. I know when I am wrong, it's because the chart level or daily number did not hold and I am more than willing to take a loss and get stopped out even if I get stopped on the high or low of the day, no problem! But when do they know they are wrong? How much do they risk before that idea is no longer valid? Nothing really changed fundamentally since the January Final report, but corn and soybeans rallied to their resistances that were clearly drawn well in advance, and the last 5 days spit it out and more. How much higher where they willing to sell, and how much are they losing in that pursuit? Nothing changed except their wallet. So when do they get out? Oh, they tell you if the market goes below "here" on the chart, then sell because their idea is no longer valid. Does that make sense, the fundamentals are still valid but they use a chart to "throw in the towel", sounds like they are trading a chart, NOT the fundamentals. They think the chart should do what they perceive the fundamentals equate in price, and I think the chart (which is a record keeper of the market) will do whatever it wants REGARDLESS of the fundamentals. Ask a floor trader if he is trading fundamentals or price on ANY given day. No matter how they get price levels they want to buy or sell, it is technically driven, not reading fundamentals to everyone standing in the pit. I am a floor trader (even trading on a screen, even position trading, I have the same mentality and approach), and charts are the only thing I rely on to get my numbers, get objectives, and where to place my stops.

Today's 2013 US corn yield forecast of 163.5 BPA, and soybeans at 44.4 BPA compare with 2/12 Forum yield forecasts of 164 BPA/43.6 BPA respectively. Planted area forecasts of 96 million acres (MA) of corn, and 76 MA of soybeans which are well under trade estimates of 97.8-99 MA for corn and 78.5-79.5 MA for soybeans. Of course these are guesstimates, but are based on recent and past historical data. It is the "ballpark" we are playing in.

There are many parameters in the baseline projections here in the US and worldwide, but I am not concerned with that at this time. What I do make note of is that the USDA projects prices for major crops are declining, but should be supported well below our current levels. To me this means there is no support in sight.

USDA said their 2013 US corn yield forecast of 164 BPA is a 25 year trend including 1988 and 2012 droughts. Their yield forecast assumes that 80% of corn is planted by mid May, that June is not extremely dry and that average weather occurs during July. USDA also said US corn yields over next decade will advance 1.9 BPA per year to 181 BPA. End of marketing year corn stocks peak 9/2015 at 2.32 billion bushels making farm corn prices slide back down to $4.10. On farm corn prices over next decade range from $4.30 to $5.40 with 2013/14 corn price representing high water mark at $5.40.

USDA sees tight US soy stocks over the next decade with carryover stocks ranging from 185 million bushels (MB) on 9/2014 to 226 MB on 9/2023. US soybean acres over the 10 years remain pretty much unchanged while the US soybean yield advances 2 BPA over the next decade or 0.2 BPA per year. On farm soybean prices ($14.30 for 12/13) decline $3 in 2013/14 and then range from $10.35-$11.35 over the next decade.

I had a couple of producers look at and we priced 2014 corn, you can use the same strategy for 2014 as now, but you must be able to margin it as well as the current old and new crop. I have no problem doing just that. If you wait for weather to carry the prices higher than they are now, hedge this summer when you get the rally, but remember, like December 2013 corn, its high in 2012 was only $6.65 while the old crop got to $8.49. As a trader (or any businessperson) all that matters is profits/income and the ability to lock it in before production gets started. It does not matter if the price will be higher or lower when the production is finished, they are not gamblers, they are manufactures who locks in profits and then do the work. Yes, they can make more or less profits depending on if expenses go up or down, or productivity, but the "meat and potatoes" of their income is locked in by their "sale or hedge". The above parameters the USDA is giving us, is what the pendulum will use as it swings with force sharply higher with crop problems, and sharply lower as a reward to an above average trend yield year.

2013 crops have a lot of ground to cover between now and the summer, and it could grind higher and lower with weather perceptions. I would take any rally as an opportunity to add protection below what we currently have. New subscribers who are unhedged producers should ... Subscribe Now! You can adjust the strikes to reflect YOUR thoughts and ideas of how much hedge protection you want, and what kind of upside you want too. Your margin is "known" no matter how high the market rallies, and you know where your protection begins and ends.

March corn has closed lower 7 days in a row, and after the first 2 days of buying December corn to sell the March corn, it has come down 5 days in a row. I talked about this prior to it happening, and that is why I said December looked strong. The sellers in December corn drew the line in the sand at $5.95, and with March going down the sellers there were embolden. "Things do what they do until they do not do it anymore" and so grains will continue lower until they do not. After the string of lower closes, the market is vulnerable to a short covering rally, but with the baseline news out, it will grind higher at best. Volatility is getting hit, meaning they are paying less for the right to be long or short. I am concerned that we will not rally from here, and that protection could run out before the March options expire in a week from this Friday. It looks like to me we will be here or lower on options expiration, which means great profits were made in the last 3 months, and we will get the chance to be long the May options at lower levels to protect and rally from. Every year we have seen these opportunities in 1 or more of the option rolls. Producers have made windfall profits after learning how to participate in the market, sell calls when in the bin, roll up and down puts, and the best part is that THEY are in control! They took the "trader" in me to help the "producer" in them. Any rally at a resistance level should be sold! I continue to prefer to sell rallies instead of buying breaks, but have no trouble buying to cover "shorts". I never lost money taking a profit. Same ideas goes for the December contract too.

The trouble for this last rally was the "funds" and speculators who "pressed" their bets at strong resistance levels for both corn and soybeans, increasing their bets with huge increases shown in the CFTC COT report. I have said I like them because they really know how to swing the pendulum, and that presents opportunities to those who know how to wait for them.

Soybeans and corn need a day or two to hold, and when that happens the chart will have current lows to work with as new lows for the "run", or showing support for older chart supports. I realize the markets are extremely oversold now, but they are still vulnerable to further long liquidation, as well as "scared" farmer selling. They should be scared if unhedged, and above $5.50 December corn should work well for most. Waiting and betting on prices to increase should not be the role of a farmer, securing some income through a hedge and betting some of that income on the "what if" is a more logical common sense approach.

I want to trade the numbers without bias today and risk $.04 in corn and $.06 in soybeans using a stop to protect any idea.

2/11/13:

Grains: Look at the report and see inventories were a little bearish for corn, and friendly for soybeans com-pared to expectations. World inventories were bearish, SA production was bearish.

U.S. Inventories Before 2013 Harvests
Analysts' Estimate Prior USDA
USDA Feb. 8 Average Range 2013 2012
Corn 632 616 502-697 602 988
Soybeans 125 130 103-140 135 169
Wheat 691 717 512-783 716 743
2012-2013 World Crop Reserves Before Northern Hemisphere Harvests
Analysts' Estimate Prior USDA
USDA Feb. 8 Average Range 2013 2012
Corn 118.04 115.57 114.0-117.0 115.99 131.79
Soybeans 60.12 59.07 58.0-60.3 59.46 55.1
Wheat 176.73 177.01 174.0-180.0 176.64 195.78
2012-13 South American Crop Production
Analysts' Estimate Prior USDA
USDA Feb. 8 Average Range 2013 201
Argentina
Corn 27.0 26.4 24.0-28.0 28.0 21.0
Soybeans 53.0 52.9 50.5-55.7 54.0 41.0
Brazil
Corn 72.5 71.3 69.8-73.5 71.0 73.0
Soybeans 83.5 82.7 81.0-84.0 82.5 66.5

Bottom line: the report did not justify further advance above the soybean resistance levels, and with the sharp drop in price means the market had already "baked" in too much bullish sentiment. Corn on the other hand on Thursday had already settled $.35 off the high last week and $.33 off the 2013 low made in January, so since the report was a little bearish, the market settled slightly lower. Heavy volume and 100,000 corn spreads were traded on Friday, so whatever anyone thinks about the report, I think it has already been factored into the closing prices. My comments going into the report said "With that being said, you have the same odds as I do to predict if the gap at $15.03 3/4 in March soybeans will hold the market from going higher, or if the gap at $7.08 3/4 will hold March corn from going lower. You know that I do not "cheerlead" the market through support or resistances, so I look at them as holding until they do not".

My producers have seen this movie now many times per year, and are learning more and more through real time hedges and observation. I am sure all my producers did not have stress going into this report except for knowing the need to buy more 2013 protection if the market breaks down. If they have stress, then what do you call unhedged producers who do not have $.48 in their pocket like we do, and have the same risk as we do now where our protection ran out. I know you have a plan to control risk, make sure you EXECUTE YOUR PLAN!

Corn took 4 weeks to rally, and 4 days to give it all back. This is typical for many a grain rally in the last 37 years I have witnessed, and one reason any grain floor trader prefers the "sell side" when possible. It's like the "Roach Motel" they "check in" one at a time easily, but they "cannot checkout", and when they try they find it difficult because they "all want to get out at once".

My service is focused into protecting hedges because the charts are breaking down in the 2013 contracts. November soybeans are approaching the uptrend line and should find support, otherwise the lows in August, November, and January is a short term "triple bottom" at $12.55 1/4 and will be strong support. In June 2012 it got down to $11.40. November soybeans have the same resistances levels as before, with $13.20, $13.40, and the bracket line near $13.60.

December corn stopped $.00 1/4 from my support number but the chart is clearly breaking down. Gap at $5.47 1/2 should be solid support in the near term, $5.10 in the summer, $4.50 or lower by harvest even with a below average yield of 151 BPA (USDA will probably look for 156 to 162 BPA, in 2 weeks they will tell us via the USDA Forum). $5.95 has proved to be solid resistance in the short term, with 2 more key re-sistances within $.14 to $6.08 3/4 keeping the bears in command.

Here are some strategy tools you can use to help reflect your ideas and the risk you want to take, or not take. Since we have the December $... Subscribe now!

These are "real time" examples of how I use options, and now you can use the result of my decades of trading with the examples given if I had to "hedge" my crop (or if long a futures contract because I thought the market is going higher). I would improve my position whenever possible, and get more protection when I needed to control my risk on my ideas. You can perfectly reflect what you think, and clearly know the cost, full margin, risks, and possible rewards.

As time goes on, in the money options gain more in value, and out of the money option go down in value, if the market is unchanged every day. Even if you do nothing, you should follow the strikes you have on now in a journal, and through observations I learned more than from any book.

I want to trade the numbers without bias today and risk $.04 in corn and $.06 in soybeans using a stop to protect any idea.

Want to know what I think for tomorrow and going forward?

The markets now covered daily are Soybeans, Corn, and S&P's.

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 my subscribers from Canada, China, Czech Republic, France, Germany, India, Switzerland, South Korea , and the UK keep renewing this service.

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

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Howard Tyllas

Put yourself in a position to make money, use the daily numbers service!

Email: dailynumbers@futuresflight.com
http://www.futuresflight.com/

Tel.1-312-823-9189, 1-702-405-7245

Disclaimer: No guarantee of any kind is implied or possible where projections of future conditions are tempted. Futures trading involve risk.In no event should the content of this be construed as an express or implied romise, 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.

Hedging March Soybeans and Trade Ideas for 2/8/13

Feb 09, 2013

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Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 36 years.

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This report was sent to subscribers on 2/7/13 4:30 p.m. Chicago time to be used for trading on 2/8/13.

March Soybeans     

After the close recap on 2/8/13: My resistance was 14.98, .03 1/4 from the actual high, and my support was 14.51, .02 from the actual low.

All charts and numbers for 2/11/13 have already been sent to subscribers at 4.00 pm.

                     March Soybeans                                           
15.20 ¾           Use the same numbers as used on 2/7/13                                                         
15.03 ¾ FG                                                                          
14.98                                                                          
------------14.86 ¼          Pivot               
14.74 ¼ FG                                                
14.63 ¾                                                
14.53                              near 200 DMA                    
5 day chart...         Up from last week same day                                                       
Daily chart   ....    Sideways             
Weekly chart ...   Down                          
Monthly chart ....Sideways     14.54 ½ is the 200 DMA
ATR 23 1/4                                       Overbought 82%

 

I continue to say "Gap bracket line at $15.03 ¾ is now resistance, 200 DMA at $14.54 1/2 is support".  


5 Minute chart shows an easy sell at resistance, buy back at the pivot (get long too if bullish today) back to $14.94 1/2 taking profits and/or going short, and take profits on the close. Even if you took 1 trade as a bull or bear, if you waited for a good entry, profits should have been realized, and the reward greater than the $.06 risked. Buy stops above the resistance were never threatened, nor was the sell stops under the pivot. 


In my daily soybean numbers on Thursday my resistance was .01 from the actual high; my support was .03 ¾ (pivot was only .01 ¾ in open outcry) from the actual low.   

For 2/8/13:

Grains: Farmers and speculators should never assume that they can just do what they want and then just hope that it all works out for the best; if they have failed to plan, then they have planned to fail.

My producers the first year felt reservations about hedging, especially when the market went up right after-wards, but having the protection gave them the confidence to feel they did not need it. But then in time when the market went lower, they once again felt that it was the right thing to have done, and they realized the "old lady at the race track" was once again at work, the difference now is they were made aware of and learned that whatever you do it was the right thing to do, and that is why they did it. I have stressed that the market does not prove what you do is right or wrong, but rather it is the right thing to do regardless of the outcome. If something is not the right thing to do, then why did you do it? Time allows the experience that leads to the wisdom. If I take a trade idea or "morphing" a hedge, the risk reward and chart location is worth entering, and time will justify if the chart location holds or not, and that results in a winner or loser. The hedge or trade idea was the right thing to do when you did it, time will tell the result, but making the trade idea or hedge was always right or why did you do it? You cannot fire your gun and say that if you hit the target it was a good shot, but if it does not then you should not have pulled the trigger. When you pulled the trigger you thought you would hit the bull's-eye, you cannot say if you missed that you should not have pulled the trigger.

Buy protection, if it goes down it was the right thing to do, if it goes up it was not. That is no different than someone telling you to bet the winner after the race is over. Don't bet on him if he loses, but bet on him if he wins; this is not reality. Dismissing this reality of having to bet the race before it starts, and becoming a commentator who tells what should have been after the results are in, will never be able to gamble success-fully, and unless the responsibility for your actions are taken, blaming the market will never get your money back. I have always said, you will never know for sure what the market will do, but you should always be sure of what you do and why you do it.

Compare what we do locking in a hedge and making $.60 or more of every $1 if the market can rally, to the services who watched $8.49 come and go looking for $10 but have lost $1.37 right now, and looking for the market to rally about 20% from $8.49 to $10 when $8.49 was a new "all time high", was really euphoric in their predictions. (Did they take under consideration what $10 would do to demand?) Let's say that they could justify looking for $10, nothing can justify losing $1.37 on ANY trade idea. Talking "bull" to producers who only listen to them because that is what they want to hear, and one tries to "headline grab" attention from the rest predicting a more bullish high price than the next service, goes home every night and asks their wife "what's for dinner", while the farmer listening to them goes home to the "house of pain", and with no plan to control risk, becomes a victim. I wonder how bullish these services would be, and how long they would watch the market go down against them, before they would "do something". They are living a stress free life having no "skin in the game", but they have no problem telling you to risk your money because the market will go higher, and you will be able to sell it then, even though we are not close to those price levels. Almost all of them have no plans if the market goes down instead, and it only takes one time for it to be a fatal decision to not have a plan to control risk. All of these hedge services are focused on the market going higher, my focus has always been if the market goes down. Just like my philosophy in trading, I am not worried on how much I am going to make, I am always defending how much I am going to lose. Winners take care of themselves, but losers can end the game.

I have been saying why I have been bearish since September, and I continue to have a bearish stance until the chart shows me something different than this bear chart longer term for both corn and soybeans.

I continue to want to get more protection on any rally when at a resistance. I have really seen the progress made in my producers, I clearly see how each and every one of them has now taken responsibility and are in control of their decisions. NOBODY can tell you today where we will be tomorrow on the close, let alone where we will be by next Friday. I believe that my producers and long term subscribers can tell most of the time what I am going to say before I say it! You are looking at the same chart that I and all who look at them see, and by now you should be looking at the chart basically the same as I do. We see where the chart has support and resistance, and know there is more chance of holding there than random numbers. We know that sooner or later they can be broken, and that is not a problem when using stops. They are also getting less and less concerned with fundamentals and why the market might move up and down, they are only concerned if the market moves to a support or resistance that they can improve their position, not why the pendulum swung there.

I have seen grain fundamentals and reports for 37 years now, and my approach has always focused on participating in the market risking little to make a nice reward, not trying to get the fundamentals right. As you have seen the last few years and I have seen for decades, you can get a bullish report and the market can go down instead, or a bearish report and the market can rally. I always look at fundamentals as a possible driver of price, but learned in my first year that standing in the pit with a long position and the report is bullish, the market is called $.10 higher, but it opens $.10 lower, that you cannot justify staying in a losing position even though you were right what the report was going to say.

We are at another tough decision, which happens often when you are gambling, and who better to make the "call" than you? I just clearly said as I have always said, that nobody can tell you where we will close tomorrow let alone the farther out you predict in time, the harder it is to get right. You already know how I look at the chart, and how I make my decisions based on them. All trades are not created equal, so I do not risk the same amount on every idea, and that is based on the chart and the location of the trade idea. With that being said, you have the same odds as I do to predict if the gap at $15.03 3/4 in March soybeans will hold the market from going higher, or if the gap at $7.08 3/4 will hold March corn from going lower. You know that I do not "cheerlead" the market through support or resistances, so I look at them as holding until they do not.

If you like to blame someone else for your decision to take their guess on the "bet" if wrong, and take the credit if their idea was right, than that would be the only reason to do so, otherwise, take responsibility and make your decisions now that you have the "tools" I have used for decades.

Lastly, the reason I have been going into "mindset", is because it is crucial for success. I as well as you my subscribers has learned how to improve what we were doing before, have improved our ability to execute our ideas, and not be focused on the half empty glass but rather the half full. Great baseball players only get 1 hit every 3 at bats, so perfect is not reality.

This is a hard decision to pay more money for 2013 protection at this time, but think of the decision that unhedged farmers are facing! At least you have about $.48 in your pocket free and clear if the market is here or lower on expiration ($.68 in November soybeans), unhedged farmers have zero. All should feel good and have learned, starting with a profitable hedge that can be adjusted with the need to do so is much better than to "risk it all". If the market rallies $.60 from here they will be no better off than you are now, but if it stays here or goes lower it gets worse for them. They risked $.60 at $6.40 looking for $7, they have lost even money for that bet so far, and tell a gambler to bet "even money" that the market will be at $7 when the high in 2012 was $6.65, instead of going down to $5.80, no gambler I know would take that bet! Does not matter corn, beans, gold, currencies, no matter, no gambler bets something will happen that has not happened in the last year and get only "even money", or even more so would lose a small amount on that idea. This is why these advisors could not trade their way out of a paper bag, because they can describe a picture but cannot paint one, and why maybe only 1 out of 100 people can trade successfully for long periods of time.

I do not know 1 successful trader who is bullish or bearish and let risk get out of control. I have no problem analysts giving projections, but not having a plan and watching the market go down is no different than the thousands of people who bought a membership and did not last 1 year on the trading floor. They might be analysts, but they are NOT traders. I have empowered you the ability to slow down the risk in the market and be able to control your "gamble", and with the mentality that you need not gamble the same every month and every year, or the same amount especially this all or nothing mentality, has allowed the freedom to reduce stress, and better understanding of using the markets, and not let the markets use you.

Maybe the report has already been "baked" into the current price, maybe not, but whatever the report says I will be more interested in how the market reacts to the report, than the report itself. Maybe a slightly bearish corn report will rally the market, and a slightly friendly soybean report will break the market, that is what I am interested in, but no matter what the report says, I always use the charts for my decisions, and the fundamentals for the possible "what if's".

Watching markets go to almost $18 and $8.49 is one thing, locking it in is another. Worse than that is to not have a plan to control risk in case they were wrong. Talk about becoming emotional with the ups and downs and doing NOTHING! As the years go by my producers clearly see it is better to take some of what the market gives you no matter how high the market can rally, compared to trying to "pick the top", and to have a plan if the market goes down, while having some "at the money" protection the entire time.  I want to trade the numbers without bias today and risk $.04 in corn and $.06 in soybeans using a stop to protect any idea. We will be sending the report asap.

2/7/13:

Grains: Brisk volume the last 2 days was no help to corn, but supported soybeans. You can see for yourself how the gap bracket line at $15.03 3/4 has held the market from further advance. Corn on the other hand after posting a $.68 advance from the pre-report low to the high made near the downtrend line at $7.46 1/4, has sold off since posting that high and closing lower that day (minor reversal). 3 days soybeans have been trying to get past that bracket line and has produced winning trades each time it traded near that resistance. It might go through it one day, but losing $.06 after making 3 winning trades in a row is why I consider it a "casino operator" bet because the odds are in your favor.

Report on Friday expects a friendly report by looking at the strength in the soybean market, and corn looks like it is worried about a bearish report. The January report had already been discounted prior to its  an-nouncement, and since it was not more bearish than thought, the market had nowhere to go but up, and as I had said at the time, it will go higher until it discovers at which resistance level will hold the market from further advance, and then start its journey (at least corn right now) down to discover which support will hold. The pendulum swings! This time it looks like the soybeans are overbought after correcting $1.50 since the Final report on 1/11/13 and closed lower (a price not seen since 6/28/12). Bulls need to close over $15.03 3/4 a couple of days to target $15.46 next. Corn looks like it is in neutral ground now, and if friendly it could test $7.46 1/4 once again, and I think will be the sideways bracket line resistance going forward in time. The gap at $7.08 3/4 is support and if that goes, look for a retest of the pre-report low of $6.78.

Producers concern remains with the 2013 crop, and I would ... Subscribe Now!

Get yourself where you want to be, but make sure you are comfortable before the report at 11am on Friday. You know your risk if the market goes down, you know your reward if further protection is not bought (or bought cheaper if it can rally) and it is your decision. Who better than you will control your risk that you exactly want to assume, and what gamble you want which can be changed at any time if your thoughts and ideas change.

I want to trade without bias and risk $.04 in corn and $.06 in soybeans on any idea using a stop to protect.                           

Want to know what I think for tomorrow and going forward?

The markets now covered daily are Soybeans, Corn, and S&P's.

Find out why my subscribers from Canada, China, Germany, India, France, Switzerland, South Korea ,Turkey and the UK keep renewing this service.

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

HowardTyllasDaily Numbers & Trade Ideas $ 199.00

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Howard Tyllas

Put yourself in a position to make money, use the daily numbers service!

Email: dailynumbers@futuresflight.com
http://www.futuresflight.com/

   Tel.1-312-823-9189,  1-702-405-7245

Disclaimer:    No guarantee of any kind is implied or possible where projections of future conditions are tempted. Futures trading involve risk.In no event should the content of this be construed as an express or implied romise, 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 Report for 2/8/13

Feb 08, 2013

Sign up: Free Learn a better way to hedge for farmers

Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 36 years.

Want to know

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WASDE Report for 2/8/13

OILSEEDS: U.S. soybean ending stocks for 2012/13 are projected at 125 million bushels, down 10 million from last month due to increased crush. Soybean crush is raised 10 million bushels to 1.615 billion reflecting both larger soybean meal exports and domestic use. Strong U.S. soybean meal exports during the first half of the marketing year are partly offsetting declining shipments from Argentina where crushing has slowed due to limited soybean supplies. Domestic soybean meal use is raised in line with projected gains in meat production. Soybean oil production is raised on higher soybean crush and a higher soybean oil extraction rate. Soybean oil exports are projected at 2.3 billion pounds, up 150 million from last month as sales continue stronger than expected. Soybean oil used for methyl ester is unchanged this month despite relatively low use during the first quarter of the marketing year. Production and use are expected to expand in coming months due to the higher mandate for 2013. Soybean oil stocks are projected at 1.665 billion pounds, up 125 million.

The U.S. season-average soybean price range for 2012/13 is projected at $13.55 to $15.05 per bushel, up 5 cents on both ends of the range. The soybean meal price is projected at $430 to $460 per short ton, unchanged from last month. The soybean oil price projection is also unchanged at 49 to 53 cents per pound.

Global oilseed production for 2012/13 is projected at 466.9 million tons, up 1.1 million from last month. Global soybean production is raised fractionally to 269.5 million tons as improved production prospects in Brazil offset deteriorating conditions in Argentina. Soybean production for Brazil is projected at a record 83.5 million tons, up 1 million from last month due to higher yields resulting from improved moisture in the center-west. Prospects for the Argentina soybean crop have diminished in recent weeks due to an extended period of dry weather. As a result, the crop is projected at 53 million tons, down 1 million from last month. Global sunflowerseed production is projected at 36.4 million tons, up 0.5 million due to gains for Russia and Kazakhstan. Other changes include increased peanut and cottonseed production for China, and reduced cottonseed production for Pakistan, Mexico, and Turkey.

Global oilseed and product supply and use changes this month include reduced soybean crush and soybean meal exports for Argentina, reduced soybean meal imports for EU-27, increased rapeseed crush and rapeseed meal consumption for EU-27, and increased sunflowerseed crush in Russia. Global oilseed stocks are projected higher, mostly reflecting higher soybean stocks in Brazil.

WHEAT:  U.S. wheat ending stocks for 2012/13 are projected 25 million bushels lower this month with higher expected feed and residual disappearance. Feed and residual use is projected 25 million bushels higher as weaker cash prices relative to corn support opportunities for increased wheat use in livestock and poultry rations. Feed and residual use is raised 10 million bushels each for Hard Red Winter (HRW) and Soft Red Winter (SRW) wheat, and raised 5 million bushels for White wheat. Projected all-wheat exports are unchanged, but HRW and Hard Red Spring wheat are lowered 25 million bushels and 5 million bushels, respectively. Offsetting these reductions are projected increases in SRW and White wheat exports of 25 million bushels and 5 million bushels, respectively. By-class export changes largely reflect the pace of sales and shipments to date. The projected season-average farm price for wheat is narrowed 5 cents on both ends of the range to $7.70 to $8.10 per bushel.

Global wheat supplies for 2012/13 are nearly unchanged with a small increase in beginning stocks more than offsetting a small decrease in production. Global wheat output is projected 0.7 million tons lower. Production is lowered for Kazakhstan and Brazil, but raised for Ukraine, South Africa, and Belarus.

Global wheat trade for 2012/13 is trimmed slightly. Imports are lowered 0.5 million tons for Morocco, 0.3 million tons for Saudi Arabia, and 0.2 million tons each for Israel, South Africa, and Vietnam. Imports are raised 0.6 million tons for South Korea, 0.5 million tons for Iran, and 0.2 million tons for Brazil. Exports are raised 0.5 million tons for EU-27, but reduced 0.5 million tons for Kazakhstan and 0.3 million tons for Brazil. Lower exports for Brazil and Kazakhstan reflect smaller crops, while the increase in South Korea imports supports higher wheat feeding. Wheat feed and residual use is also raised for Ukraine. Wheat feed and residual use is lowered for EU-27, Saudi Arabia, Kazakhstan, Vietnam, and Israel. Global wheat consumption is virtually unchanged at 673.4 million tons; however, global consumption is projected down 24.6 million tons year to year, mostly reflecting lower feed and residual use in 2012/13. World wheat ending stocks for 2012/13 are also nearly unchanged this month at 176.7 million tons. Lower projected ending stocks in the United States and Morocco are offset by higher stocks in Iran, South Korea, and Ukraine.

COARSE GRAINS:  U.S. feed grain ending stocks for 2012/13 are projected higher this month as lower expected exports outweigh an increase in projected domestic usage. Corn exports are projected 50 million bushels lower based on the sluggish pace of sales and shipments to date and prospects for more competition from Brazil. Corn use for ethanol production is unchanged, but corn use for sweeteners and starch is raised 20 million bushels, boosting projected food, seed, and industrial use. Projected corn ending stocks are raised 30 million bushels. The projected range for the season-average farm price for corn is lowered 20 cents at the midpoint and narrowed to $6.75 to $7.65 per bushel. Reported monthly prices received by farmers to date continue to reflect forward sales made at prices below prevailing cash market bids.

Usage changes for 2012/13 are also made this month for sorghum and barley. Sorghum feed and residual use is projected 25 million bushels lower, but offset by a 20-million-bushel increase in food, seed, and industrial use and a 5-million-bushel increase in exports. Projected barley exports are lowered 1 million bushels, based on indications of slower-than-expected shipments. Barley ending stocks are increased by the same amount. The projected range for the sorghum farm price is lowered 15 cents at the midpoint and narrowed to $6.70 to $7.60 per bushel. The barley farm price range is narrowed 5 cents on each end to $6.15 to $6.65 per bushel.

Global coarse grain supplies for 2012/13 are projected 2.1 million tons higher as a decrease in beginning stocks is more than offset by a 2.9-million-ton increase in production. Lower 2012/13 beginning stocks mostly reflect an increase in 2011/12 corn exports for Brazil and revisions to the Paraguay corn series that lower 2011/12 corn area and yield.

Global 2012/13 corn production is raised 2.1 million tons with increases for Brazil, Mexico, India, and Ukraine more than offsetting a reduction for Argentina. Brazil production is raised 1.5 million tons based on higher reported area and yields for the first-season crop and good early prospects for second-season corn. Mexico production is increased 0.8 million tons with higher reported area for the summer crop. Production is raised 0.6 million tons for India on higher area as indicated by the latest sowing progress reports. Ukraine production is increased 0.4 million tons on higher reported yields. Argentina production is lowered 1.0 million tons as persistent dryness in January and early February lowers yield prospects, particularly for late-planted corn.

Global 2012/13 production is also higher this month for sorghum, barley, oats, and rye. Sorghum production is raised 0.4 million tons for Mexico with higher area and yields for the summer crop, but lowered 0.2 million tons for Australia with reduced prospects for area and yields. Global barley, oats, and rye production are up a combined 0.6 million tons on larger reported crops for the FSU-12 countries.

Global coarse grain trade for 2012/13 is higher mostly reflecting increased imports of barley for Saudi Arabia, Turkey, and Tunisia and higher sorghum imports for Mexico and Japan. World corn imports and exports are raised only slightly, but significant shifts are made among countries. Corn imports are raised for EU-27 and China, but lowered for Egypt, Syria, Mexico, and Saudi Arabia. Corn exports are raised for Brazil and Ukraine, but lowered for the United States and Argentina. Global corn consumption for 2012/13 is lowered with a reduction in world feed and residual usage. Corn feed and residual use is lowered 2.0 million tons for Brazil, 1.0 million tons for Egypt, and 0.4 million tons for Argentina, but raised 2.0 million tons for EU-27 and 0.5 million tons for China. Global corn ending stocks for 2012/13 are projected 2.1 million tons higher with the largest increases expected for Brazil and the United States.

SUGAR:  Projected U.S. sugar supply for fiscal year 2012/13 is increased 65,000 short tons, raw value, from last month, due to higher sugar production more than offsetting lower imports. Louisiana cane sugar and U.S. beet sugar production estimates are increased in line with reports from processors, and increased shortfall in filling the tariff rate quota accounts for reduced imports. Sugar use is unchanged.

LIVESTOCK, POULTRY, AND DAIRY:  The 2013 forecast of total red meat and poultry production is raised from last month reflecting higher forecast beef, pork, broiler, and turkey production. Beef production is raised based mostly on heavier carcass weights. The beef production forecast is also raised as cow slaughter in the first quarter is expected to be relatively high. Pork production is raised as carcass weights are expected to reflect more moderate feed costs. Broiler hatchery data pointed to continued expansion of bird numbers and weights at slaughter have been increasing. Thus, the broiler production forecast is raised from last month. Turkey production is raised slightly on hatchery data. Egg production is raised on higher producer prices and lower forecast feed prices. Estimates of 2012 meat and egg production are adjusted to reflect December data.

The beef export forecast for 2013 is unchanged as trade restrictions by Russia are offset by gains to Japan and other markets. Pork exports are lowered on trade restrictions imposed by Russia although there is expected to be some offset in higher exports to other markets. Broiler and turkey export forecasts are raised from last month on stronger demand from a number of markets. Import forecasts are unchanged from January. Beef and pork export estimates for 2012 are lowered due to slower-than-expected shipments in November. Poultry is raised based on larger-than-expected November shipments.

Cattle, hog, and turkey prices for 2013 are unchanged from last month. Broiler and egg prices are raised on expected demand strength in 2013.

The milk production forecast for 2013 is raised. Milk cow numbers are raised as USDA's Cattle report indicated that the number of cows on January 1 was about unchanged from 2012. Milk per cow forecasts are raised as last quarter-2012 estimates were higher than expected and lower forecast feed costs support higher milk yields in 2013. Fat-basis trade estimates for 2013 are unchanged. The skim-solids export estimate for 2013 is raised largely on expectations of stronger nonfat dry milk (NDM) shipments, but the import forecast is unchanged. Milk production estimates for 2012 are raised, reflecting end-of-year production data. Dairy trade estimates for 2012 reflect the pace of trade through November.

Cheese prices are unchanged from last month, but the price range is narrowed. NDM and whey prices are raised reflecting stronger demand, but the butter price is lowered. Despite a higher whey price, the forecast Class III price is unchanged although the range is tightened. Lower butter prices are more than offset by higher NDM prices resulting in a slightly higher forecast Class IV price. The range of all milk price for 2013 is narrowed to $18.90 to $19.70 per cwt.

COTTON:  This month's 2012/13 U.S. cotton forecasts include higher exports and lower ending stocks relative to last month. Estimates of production and domestic mill use are unchanged. Exports are raised slightly to 12.5 million bales, due mainly to an increase in projected imports by China. Ending stocks are forecast at 4.5 million bales, accounting for 28 percent of total disappearance. The forecast range for the marketing year average price received by producers of 69-73 cents per pound is raised 3 cents on the lower end and 2 cents on the upper end of the range, reflecting a sharp increase in the price received for December.

The aggregate world 2012/13 production, consumption, and stocks forecasts show only slight revisions this month, but increases in China's production and imports are raising the expected concentration of stocks there. World production is estimated marginally higher, as increases for China and Kazakhstan are mostly offset by decreases for Pakistan and Turkey. World consumption likewise is increased marginally, reflecting increases for Turkey and others. China's imports are raised 1.5 million bales to 14.0 million, increasing world trade by a like amount, based on heavy imports during the first half of the marketing year. Exports are raised for the United States, Australia, Brazil, Uzbekistan, the African Franc Zone, Greece, and others. World ending stocks are virtually unchanged at 81.9 million bales, but China's stocks are raised 2.0 million bales to 42.6 million, accounting for 52 percent of world stocks.

RICE: Slight revisions are made to the U.S. all rice and rice-by-class supply and use balance sheets. U.S. 2012/13 total rice supplies are raised slightly because of an increase in imports. Beginning stocks and production are unchanged from a month ago. Long-grain imports are raised 0.5 million cwt to a record 18.5 million, and combined medium- and short-grain imports are unchanged at 2.5 million. No changes are made on the use side-all rice domestic and residual is still forecast at 125.0 million cwt and exports at 106.0 million. The rice-by-class projections of domestic and residual use and exports are also unchanged from a month ago. All rice 2012/13 ending stocks are raised nearly 2 percent to 30.6 million cwt-all in long-grain rice.

The 2012/13 long-grain, season-average price is raised 10 cents per cwt at the midpoint and the range is narrowed to $14.00 to $14.60 per cwt. The combined medium- and short-grain price is lowered 50 cents per cwt at the midpoint and the range is narrowed to $15.90 to $16.50 per cwt. The all rice season-average price is unchanged at $14.90 per cwt at the midpoint, but the range is narrowed to $14.60 to $15.20 per cwt.

Global 2012/13 projections of rice production and consumption are raised from last month, but trade and ending stocks are lowered. Global 2012/13 rice production is forecast at a record 465.8 million due to increases for Bangladesh, Bolivia, and Nepal partially offset by reductions for Argentina and Laos. Global consumption is raised 0.7 million tons to a record 469.3 million as relatively small changes are made to several countries including Bolivia, Iraq, and Nepal. Global exports for 2012/13 are lowered slightly due mainly to reductions for Argentina and China. Imports are reduced for Bangladesh, Cuba, Egypt, and Indonesia. Global 2012/13 ending stocks are reduced 0.5 million tons to about 102.0 million due mostly to decreases for Egypt and Indonesia.

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