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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 Soybeans and Trade Ideas for 4/9/14

Apr 10, 2014

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This report was sent to subscribers on 4/8/14 3:30 p.m. Chicago time to be used for trading on 4/9/14.

 

November Soybeans

 

After the close recap on 4/9/14: My resistance was 12.35, .01 from the actual high, and my pivot acted as support and was 12.17 1/4, .02 (pivot was the EXACT low in open outcry) from the actual low.

November Soybeans

12.58                           

 

12.35                           August 2013 High

 

--------------12.17 ¼    Pivot 

 

11.99 ½                                

 

11.93 ¼                               

 

                               

 

5 day chart...         Up from last week same day                                                                           

 

Daily chart   ….    Up (turns Down below $11.87)

 

Weekly chart …   Sideways   

 

Monthly chart ….Sideways         11.72 is the 200 DMA

 

ATR 16                                          Ex. Overbought 96%    

 

 

For 4/9/14: I continue to say "Uptrend line above is resistance, bracket line at $11.87 and the daily numbers support. Note the blue line, to show where I got $11.98 from the low in April 2012".

 

Uptrend correction is still intact. Below the bracket line I want to take the sell signals.    

 

In my daily November soybean numbers on Tuesday my resistance was .00 ¼ from the actual high; my support was .05 ¼ (pivot was .02 in open outcry) from the actual low.        

 

 

 

4/9/14: 

 

Grains: 

 

You cannot control the market, or the market pendulum swings, or control what the price will be looking at today’s price. All you can do is control yourself, and every successful trader I know is in control of what they do. Look for opportunities on rallies or breaks to improve your hedge cheaply, which is the easiest and least risky way to participate in the market.   

 

I am much more concerned how the market reacts to the report, than whatever the report says. I really like it when I think a report will cause the market to move one way, but it moves the other way instead and I am right the market but wrong what I thought the report would say. Right the market for the wrong reasons, better than being right the report and wrong my position. Let’s say we get a bearish report, the funds might take the opportunity of lower prices to buy more contracts, and by the end of the day it closes higher. Bearish report but we close higher. Maybe it will be a bullish report that drives the market to its resistance and the bulls take the opportunity to take some profits, the selling feeds on itself, and we close lower on the day. 

 

But no matter if the report is bullish or bearish, the true buyers or sellers will execute their orders if the market gets to their price. Nobody cares why their order was filled, they just care when it is. I prefer not to have a position going into the report, and take advantage of price swings after the report trying to buy the support or sell the resistance numbers first, and the more the extreme the numbers or level, the more I like to take the trade. I ALWAYS use a stop to protect any idea.   

 

Charts are in bull mode, but getting close to major longer term resistance price levels. I would trade the numbers without bias and risk $.04 in corn and $.06 in soybeans using a stop to protect any idea.  

 

4/8/14: 

 

Grains: Not much going on, and I think today will be no different as we await the report on Wednesday. Exports were really good, but that did not do much to spur new buying interest. I think both bull and bear have the position they want as we await weather for planting just around the corner. Last year at this time we were in the "wet" part of the weather scare, and we did not really get it in until mid May, and how did the 2013 crop come out? But shake in your boots because we still use a horse and a plow to get it in. Spin it any way you want, and think what you want; prices can do anything because the current weather still is meaningless when it comes to forecasting production. We play poker now, and the best hand does not always win, but the time to "call the bet" will be at harvest, and these are just bets along the way until the last card is turned and the final outcome is known.  

 

I am really amazed that the market could be this high and poised to go higher at this time of the year after making summertime like rally, but knowing the funds bought nearly 500,000 contracts since the start of the year, then it does not surprise me. Whenever and from this level or higher, when the downturn comes it will be fast and brutal, that will be when the funds become sellers. They seem comfortable, and they are adding contracts not getting out yet, so they might feel that for the next week they can look to the weather to decide to add or take risk off their table. I do not know what they will do, but I know what I want to do. What I want to do is take sell signals especially for a day trade when at the resistance numbers, more than buying support numbers. I have no problem buying the longer term support levels too if we get down there.    

 

I continue to say "I want to sell rallies more than buy breaks, but I would trade the numbers without bias and risk $.03 in corn and $.06 in soybeans using a stop to protect any idea".                                                                                            

 

                                             

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The markets covered daily are 2013 & 2014 Soybeans and Corn.

 


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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 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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