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The Grain Report

RSS By: Sean Lusk, AgWeb.com

Market updates from Walsh Trading.

Daily Option Run by Dan Burke 8272013

Aug 28, 2013

 DAN BURKE'S DAILY OPTION RUN

GRAINS

MACRO OUTLOOK:  In my opinion, the medium to long term outlook for Grains is bearish.  In review of the daily charts, I would suggest this recent move upward, caused by a sudden appearance of heat and dryness, will run out of momentum and turn to the downside again.  This suggestion is also based on our weather model forecasts and per federal policy.  Let us be reminded the minutes of the FOMC meeting state that economic fundamentals of the U.S. economy are solid again.  Therefore, there is a potential longer term drag on Grains coming from the expectation of a stronger U.S. dollar.   In order to take full advantage of price discovery, we must keep an astute eye on potential yield and incoming weather.  Please take a look at the below listed puts and calls, so we can have a productive conversation about hedging your Grains using real examples.  Keep in mind, commissions and fees are not included in the cost of the option.

SOYBEAN HEDGE OPPORTUNITIES

 

PRODUCERS

SEPT '13

NOV '13

JAN '14

MAR '14

JUL '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

1270

4.4

220

1200

5.0

250

1100

6.40

320

1080

5.4

270

940

3.6

180

1220

2.0

100

1190

4.4

220

 

 

 

 

 

 

 

 

 

1180

1.1

110

1100

1.4

700

 

 

 

 

 

 

 

 

 


END USERS

SEPT '13

NOV '13

JAN '14

MAR '14

JUL '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

1460

17.6

880

1490

24.4

1200

1580

19.2

960

1600

16.0

800

1660

13.7

685

1500

11.0

550

1500

21.7

1085

 

 

 

 

 

 

 

 

 

1540

7.2

360

1510

19.6

980

 

 

 

 

 

 

 

 

 

 

CORN HEDGE OPPORTUNITIES

PRODUCERS

SEPT '13

DEC '13

MAR '14

JUL '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

460

5.7

175

440

8.0

400

400

5.1

255

400

6.3

315

440

2.6

130

420

4.6

230

 

 

 

 

 

 

430

2.0

100

400

3.0

150

 

 

 

 

 

 

END USERS

SEPT '13

DEC '13

MAR '14

JUL '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

510

11.7

305

530

15.0

750

600

11.2

560

630

16.0

800

530

5.6

220

550

10.6

530

 

 

 

 

 

 

540

4.0

200

570

7.0

350

 

 

 

 

 

 

 

WHEAT HEDGE OPPORTUNITIES

PRODUCERS

SEPT '13

DEC '13

MAR '14

JUL '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

650

10.0

500

620

12.6

630

560

6.1

305

530

7.5

375

640

6.1

305

600

8.1

405

 

 

 

 

 

 

635

5.5

275

580

4.3

215

 

 

 

 

 

 

END USERS

SEPT '13

DEC '13

MAR '14

JUL '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

690

 

7.4

370

700

19.0

950

790

15.4

770

810

20.6

1030

710

3.7

185

720

14.2

710

 

 

 

 

 

 

720

4.3

215

740

11.0

550

 

 

 

 

 

 

 

RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING.  THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT.  WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.

Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The views and opinions expressed in this letter are those of the author and do not reflect the views of Walsh Trading Inc. or its staff.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Walsh Trading Inc. Copyright © Walsh Trading Inc. 

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Support refers to an area on a chart where buy orders may be clustered. Resistance is an area where there may be sell orders.  Fibonacci retracement is named after a 12th century Italian mathematician and based on the theory that prices rise or fall by predictable amounts after reaching a high or low.

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