Hedging Corn and Soybeans
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.
July Corn Daily Numbers & Trade Ideas for 5/31/12
Jun 01, 2012
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These numbers were sent to subscribers on 5/30/12 1:35 p.m. Chicago time to be used for trading on 5/31/12.
After the close recap on 5/31/12: My pivot acted as resistance and was 5.62 1/2, .01 1/4 from the actual high, and my support was 5.53 1/2, .00 1/4 from the actual low.
All charts and numbers for 6/1/12 have already been sent to subscribers at 4:40 pm .
-----------5.62 ½ Pivot
5.53 ½ XX Double Bottom
5 day chart.... Down from last week same day
Daily chart ... Down
Weekly chart ... Down
Monthly chart .... Down 6.52 ½ is the 200 DMA
ATR 20 ½ Ex. Oversold 6%
For 5/31/12: Bracket lines support and resist; daily numbers after that.
In my daily corn numbers on Wednesday; my pivot acted as resistance and was the EXACT actual high; my support was .01 ½ from the actual low.
Grains: Exact high and spot on support corn numbers, soybean support was spot on and accurate resistance numbers. July soybean downtrend line remains intact and as long as that holds, the bears remain in charge. $13.51 is going to be big, and I give it a 50/50 chance of holding. But any correction to the downtrend line I would prefer to be a seller and stay on the side of this trend. Downtrend line comes in at $14 today, and a close above there would put the bulls back in control and in corrective mode. $13.75 ½ is the pivot of those two parameters.
July corn bracket line provided the exact high, and the $5.55 low of 2011 was jabbed by $.01 ½ just to see what was down there (stops or fresh selling) and recovered to trade higher a few times during the day, but the bears won the battle closing lower. The high and low which were almost perfect at bracket support and resistance lines. I would like to see a rally above the Wednesday high improving the chance for more corrective action. Many times in 2011 we witnessed and took advantage of the fact that most corn breaks produced $.95 draw downs, and Wednesday action did just about that. Chart wise and fundamental wise, if we can bounce it will not look anything like we saw when the funds had more "what if's" in their sail, but guess what, it is June now, rain is expected, and there are no wild fires in the grain belt right now. I have traded for decades, and I have never seen a "perfect crop", there are ALWAYS going to be sad stories going on, along with stories of record yields in other areas.
I have always looked at it as every farm are drops in the bucket, and I trade on what is in the bucket, not the drops that fill it. This logic corresponds with my fundamental attitude, fundamentals are drops in the bucket, and like farm operations, some fill the bucket more than others, but I trade what is in the bucket. The bucket no matter what's inside is the passenger, the price is the driver. Price makes fundamentals as well as fundamentals influence price. You already know what happens when something goes less than cost of production, or too high of a price destroys demand.
December corn downtrend lines are easy resistance levels to trade if we can get to $5.35 and $5.50 now, but unless we can get above $5.50, the bears are in total control. $5.10 was good support this week and last, and if we went below there the bulls are getting ready once again to face the slaughter. First time down there 3 weeks ago produced a $.50 rally, and almost daily that week I did everything but insist to buy more protection which all my producers did whatever they could. $4.99 is Custer's Last Stand.
Since we had a $.95 draw down in and at corn chart support, I would trade the numbers without bias and risk $.04 using a stop to protect any idea. Since the soybeans are nearing resistance, I prefer to take the sell signals but would trade without bias and risk $.06 on any idea using a stop to protect.
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