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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.

May Corn Daily Numbers & Trade Ideas 4/17/12

Apr 18, 2012

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These grain numbers were sent to subscribers on 4/16/12 2:20 p.m. Chicago time to be used for trading on 4/17/12.

May Corn

After the close recap on 4/17/12: My pivot acted as resistance and was 6.29 1/4, .01 1/4 from the actual high, and my support was 6.16 1/4 .00 1/2 from the actual low.

All charts and numbers for 4/18/12 have already been sent to subscribers at 5:00 pm .

May Corn


6.41 ½
6.29 ¼ FG
-----------6.22 ¾ Pivot
6.16 ¼
6.03 FG


5 day chart.... Down from last week same day
Daily chart ...... Sideways
Weekly chart .......Down
Monthly chart .... Sideways 6.63 ½ is the 200 DMA
ATR 14 Ex. Oversold 5%


I continue to say "Uptrend line resists and then the daily numbers, low of March supports".

In my daily corn numbers on Monday; my pivot acted as resistance and was .01 ¾ from the actual high; my support was .01 ¼ from the actual low.

 

4/17/12: Grains: Spot on grain numbers. No surprise that corn closed down, and I am still bearish.

Crop progress report was delayed today and will be out tomorrow. Here is the link in case you cannot find the one from last year. Copy and paste into your browser.

http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1048

Looking back, May corn has pulled back 14 of the last 15 years during the last 3 weeks of April, and this year looks like it will make it 15 of 16. That is no reason to take a trade, but it is wind in the bear's sail. With December corn a couple of cents above the low in April, which was the lowest low since March 2011, it is in jeopardy. Producers need to decide at what price the need for more protection down to $5 is needed. I do not want to sell (buy a put spread) where I am supposed to be buying (at March lows). IF the market can hold around here, it will be a "double bottom" on the chart and I would look for a retest of the downtrend line at best for now. But a close below would warrant me to get protection down to $5 which is the next major support.

There are many ways to morph from here going forward, but in order to have the exact strategy and strike prices, you need at least a consensus or conviction of what you think, if not, you can reflect that by doing something in the middle of your own "what if".

Old crop corn hedge is mostly protected down to $6.10, and that is all the room we have until Friday. If you do not buy more protection in the old or new crop corn, you will be long where your protection ends. As I said there are many things you can do. If below $6.03 you will need more protection, and you can Subscribe now!

Now that we are getting closer to key supports, I would trade without bias today and risk $.04 in corn and $.06 in soybeans using a stop to protect any idea.
4/16/12:

For 4/16/12: Grains: Spot on numbers! Soybeans once again closed in the lower half of its day's range, but closed slightly higher on the week. Corn closed about $.28 lower on the week. My comments this week are spot on to what I think about the market and my approach to trade it. (Review again) All I can add to that is the fact that timely rains do not help the bulls cause, and soybean high prices cause demand destruction and buy acres to be planted in SA later this year.

Back to the charts: I think corn is lucky to have a strong soybean market, but unless beans go higher, corn has little chance to sustain any rally. The fundamentals are not supporting it, and the chart remains sideways now. The poor close on Friday does bode well for another down week to follow. I have been clear the reason I am bearish corn, and make sure you have enough protection down to $6.03 in May, and $5 in December. $6.46 is the first resistance in May, downtrend line at $5.55 in December.

May corn $6.60/6.10 put spread settled at $.29 ¾, and the July $6.30/5.80 settled at $.22 ¾, you could Subscribe now!

Journal your guess and make change when necessary. I think we will be under pressure the next 3 weeks, and then prepare for some kind of summertime rally.

"I prefer to take the sell signals but would trade 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 6 markets now covered daily are Soybeans, Corn, Crude oil, S&P, 30 yr TBond and Gold.

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.

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

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Howard Tyllas

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Email: dailynumbers@futuresflight.com
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Tel.1-312-573-2699, 1-312-823-9189

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.



 

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