November Soybean & December Corn and September Corn Daily Numbers & Trade Ideas for 9/7/11
Sep 08, 2011
This report was sent to subscribers on 9/6/11 1:45 p.m. Chicago time to be used for trading on 9/7/11.
After the close recap on 9/7/11: My resistance was 14.34 ½, .00 ¼ from the actual high, and my support was 14.08 ½, .04 from the actual low.
After the close recap on 9/7/11: My resistance was 7.67 ½, .02 ½ from the actual high, and my support was 7.38 ½ FG, .05 ¼ from the actual low.
After the close recap on 9/7/11: My resistance was 7.57 ½, .02 from the actual high, and my support was 7.28 ¾, .04 ¾ from the actual low.
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All charts and numbers for 9/8/11 have already been sent to subscribers at 5:00 pm.
14.45 ¾ FG
--------------14.21 ½ Pivot
5 day chart... Down from last week same day
Daily chart .... Up
Weekly chart ... Up
Monthly chart Up $13.30 ½ is the 200 DMA
ATR 24 ½ Balanced 46%
For 9/7/11: Uptrend line is now resistance, bracket line and then daily numbers support.
In my daily soybean numbers on Tuesday; my resistance was not in play with the sharply lower open; my support was .04 ¾ from the actual low.
7.67 ½ Top Channel Line
-----------7.54 ½ Pivot
7.38 ½ FG Key Uptrend Line Support
5 day chart........ Down from last week same day
Daily chart ...... Up
Weekly chart .......Up
Monthly chart .... Up 6.28 ½ is the 200 DMA
ATR 18 ½ Balanced 50%
For 9/7/11: "Top channel line at the gap is strong resistance. Uptrend line at the gap at $7.38 ½ is support, contract high at $7.79 resists".
In my daily December corn numbers on Tuesday; my pivot acted as resistance and was .01 from the actual high; my support was .04 ¼ from the actual low.
7.65 2011 High & "Double Top"
7.57 ½ FG
-------------7.49 ¾ Pivot
7.28 ¾ FG Use the same numbers as used on 9/6/11
ATR 17 ¾ Balanced 55% 200 day MA 6.56
You can zoom in on any chart
NO MATTER THE TRADE IDEA, I ALWAYS PLACE MY STOP AT THE SAME TIME I PLACE MY ENTRY ORDER.
9/7/11: Bracket line is resistance, gap is support now.
In my daily September corn numbers on Tuesday; my pivot acted as resistance and was .00 ¾ from the actual high; my support was .06 from the actual low.
I always say "When we are near the bracket line support I have a take the buy signal bias, and when near the bracket line resistance I have a sell signal bias".
Grains: Spot on corn numbers and soybean support, but soybean resistance was not in play. Soybeans opened at the gap support which turned out to be the high, and went down and jabbed below the bracket line support. The low of the day is support now, and the gap at $14.45 ¾ left from Friday's close is resistance. Choppy trade is to be expected this week not only for soybeans but corn too. I look for that low to hold and the gaps above to resist going into the report on Monday. In corn, the gap at $7.38 ½ coupled with the key uptrend line will support, and the top channel line at $7.67 ½ or the 2011 high of $7.79 will resist. Your guess is as good as anyone's. Informa came out at 151 bu./acre and you know I agree with that guess based on crop ratings. Speaking of which, continued to decline 2% in corn and 1% in beans. Others came out with sub-148 numbers. Nothing has changed for me; "I want to trade the numbers today with a bearish bias and risk $.06 in corn and $.08 in soybeans on any idea using a stop to protect."
December 2012 corn is now $1.10 below the July 2011 futures, and the record was posted in that spread in 2011 at $1.33 ½. This is a repeat of last year for the same reason when I said, either the old crop will come down to the new crop, or the new crop should gain on the old crop. Producers should only concentrate on hedging their 2011 crop and using their money for margin to do so, not to margin the 2012. They can make more on waiting for a good basis using options than what is lost on price for 2012. If all input costs for 2012 are already locked in, and you have enough money, it costs almost nothing to hedge locking in $6.60 until $1 down. I cannot remember a year that you could do it cheaper. Since it is more profitable to plant corn next year than soybeans, it could cause soybeans to gain in relation to corn by March.
Grains: Spot-on grain numbers, and September corn support number was exact. November soybeans closed $.22 ¼ higher for the week, December corn closed $.07 lower. Action on Friday keeps the bulls' hopes alive, but until corn can close above the double top, I remain a seller, especially for day trades. November soybeans chart is bullish, but the gap lower trade on Thursday followed by a lower high for the day on Friday continues to point to further corrective action to the downside. The gap support from Thursday close was not filled and could provide the springboard higher if tested again and the bears fail to fill it.
I think I have summarized well the drivers in the grain market, as well as the sentiment, emotions and momentum. It is impossible to know what is really out there in the fields and what will actually be harvested. I do not bet money on my guesses, but rather try to take out of the market what I can when the market provides an opportunity at support or resistance levels, and the reward is worth the risk. When my number does not hold I KNOW why I lost money; can you say that on your fundamental idea right now? If I wanted to trade on my guess of the fundamentals, it would be when, at a chart level that provides an entry, I use a known risk option strategy that reflects my thoughts of my objective, and the time frame for it to happen, knowing I cannot be stopped out, lose more money than I thought on the idea, and have the luxury of buying the time to see if my idea will in fact profit.
9/1/11: Grains: Spot-on numbers. As long as September corn does not close above the double top, I will always want to day trade selling against it and risk $.06 on the trade idea. I also feel there is more risk to the downside rather than the upside going into the weekend. I insist you go with your own thoughts, but take under consideration the double top in corn, and that the marathon is in the last few miles before the finish line, for at least this race higher. $8 is within reason before the report on Sept. 12, and corn should be well supported with the market focused on yields and continued dry weather. Even if yields are known and are somewhat bullish, we have 12 months to ration what is there. I am still at 151ish bu./acre give or take 1 bu./acre, but if in fact we do get only 145, $9 should be tested.
SA soybeans stocks are up 400 mb and that should take away exports from the U.S. and relieve some of our tightness. In early August when SA reported stocks, the PRC demand was in question, and we went below $13 as a result, so I cannot get too friendly at this time at this price level. If continued dry weather persists and ratings decline, $15 could be seen near-term. I just cannot be bullish at this time with all the unknowns at this price level.
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July 25, 2011: Producers who started to hedge with me in January 2010 at $4 got $5 or more free and clear by December 2010. Half of my producers held their old crop into this year using my option strategies and sold when the CBOT was $6.50 or higher. About a third of my producers got $7.50 or more. I have three producers who still have some old crop corn and have already locked in $7.70 or more and have watched their "basis" improve dramatically. I have one producer in South Dakota who watched his basis improve from $1.30 under the CBOT price to plus $.45 last week. The basis is always in play with my strategies but can be locked in at any time.
For 2011 corn, we started hedging last summer by locking in as much input costs as possible. You cannot hedge until this is done because you are assuming more risk than not hedging at all, because after you lock in a futures price, until you buy your inputs, you might be "locking in a loss."
After input costs were locked in, I did not start to recommend hedging 2011 corn and soybeans until the last week of 2010, when December 2011 corn was at $5.50 and November 2011 soybeans were at $13. I recommended hedging only 25% to 50% at that time since the charts were still bullish, but still the prudent thing to do. Using my strategies, all of my producers have locked in $6.60 or higher now with most at $6.90. Yes, we "morphed" the original hedge $1.10 or higher. Soybeans are now between $13.60 and $14, but some have kept some of the original hedge at $13. They are protected at $13 down to $12.20, but at the same time they are long their crop above $13 unhedged until $15. Yes, they can make another $2 to the upside, or lock in some of it on the way up.
In the current one-day free trial that you receive, you will see much of the process of how and when they took advantage of the rally even though some were bearish. My strategy allows making more money than the original hedge if the market can rally, no matter the reason, and have some protection if the market goes down. You need not work with me to use my daily numbers service, but my option order execution is second to none.
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