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The Grain Report

RSS By: Sean Lusk, AgWeb.com

Market updates from Walsh Trading.

Dan Burke's Daily Option Run, August 28th 2013

Aug 28, 2013

 

DAN BURKE'S DAILY OPTION RUN 08/28/13

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

OCT '13

NOV '13

JAN '14

MAR '14

JUL '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

1250

5.4

270

1200

6.6

330

1140

5.6

280

1100

6.5

325

1000

5.6

280

1220

3.4

170

1180

5.2

260

 

 

 

 

 

 

 

 

 

1200

2.4

120

1100

2.0

100

 

 

 

 

 

 

 

 

 


END USERS

OCT '13

NOV '13

JAN '14

MAR '14

JUL '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

1500

8.2

410

1600

7.0

350

1700

6.0

300

1680

7.6

380

1800

5.2

260

1550

5.0

250

1620

5.7

285

 

 

 

 

 

 

 

 

 

1600

3.0

150

1650

4.5

225

 

 

 

 

 

 

 

 

 

 

CORN HEDGE OPPORTUNITIES

PRODUCERS

OCT '13

DEC '13

MAR '14

JUL '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

460

8.0

400

435

9.0

450

410

7.2

360

400

7.7

385

440

3.5

175

420

6.0

300

 

 

 

 

 

 

420

1.5

75

400

3.2

160

 

 

 

 

 

 

END USERS

OCT '13

DEC '13

MAR '14

JUL '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

500

9.0

450

535

9.1

455

630

5.2

260

700

5.6

280

510

6.4

310

550

6.6

330

 

 

 

 

 

 

520

4.5

225

560

5.4

270

 

 

 

 

 

 

 

WHEAT HEDGE OPPORTUNITIES

PRODUCERS

OCT '13

DEC '13

MAR '14

JUL '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

645

9.0

450

605

8.0

400

550

4.1

205

550

10.5

525

635

5.6

280

590

5.1

255

 

 

 

 

 

 

625

3.4

170

580

3.6

180

 

 

 

 

 

 

END USERS

OCT '13

DEC '13

MAR '14

JUL '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

680

7.7

385

720

11.0

550

810

9.3

465

850

12.3

615

690

5.4

270

730

9.3

465

 

 

 

 

 

 

700

3.6

180

750

6.6

330

 

 

 

 

 

 

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.

For more market information, Dan can be reached at 1.312.957.8248 or via e-mail at dburke@walshtrading.com.

Stay Green!  Go Paperless and fill out this online application in order to trade Futures and Options--https://accountforms.rcgdirect.com/

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