Apr 16, 2014
Home| Tools| Events| Blogs| Discussions Sign UpLogin


The Ted Spread

RSS By: Ted Seifried, AgWeb.com

Ted is the Chief Market Strategist and Vice President in charge of the Zaner Ag Hedge Group and specializes in agricultural hedging employing various strategies using futures, futures spreads, outright options and option combinations. He believes it is paramount to be able to use different strategies to adapt to market conditions. Ted works with large to mid size grain and livestock producers and end users in North, Central and South America.

Corn and Soybeans Post New Record High Closes

Aug 21, 2012

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.   

 

Sharply higher trade in the grains today was fueled by crop tour commentary and a sharply lower US Dollar.  Commercials were rumored to be aggressive buyers today as well.  The Pro Farmer crop tour released their day 1 results today and they were rather disappointing, especially in South Dakota.  Pro Farmer is looking at an average yield of 110.5 for Ohio compared to 160.53 three year average, and 74.26 for South Dakota compared to 143.88 three year average.  The news from South Dakota was unsettling as we had thought yields could be pretty good for a good part of the state.  Early reports from today's leg of the tour are suggesting a little better then expected yields for Indiana.

When Does Weather Matter: http://www.zaner.com/offers/?page=6&ap=tseifrie

The US Dollar was sharply lower today on good news and fuzzy feelings from Europe.  I'm not sure we would say that the issues in the Euro Zone are behind them, but for now the chart of the US Dollar looks to be rolling over to the downside.  This sparked a bit of a commodity wide rally today as speculators ran to hard assets.

The breakout to new highs in soybeans and new high close in corn could be suggesting another leg higher for the grains.  It is difficult to say how long or high this might go, but the bottom line is that we could be getting ready to add more premium to some already good prices.  We could also see markets put their highs in and roll over in the next two-three weeks so producers need to take a long look at prices above $8.00 in corn and $17.00 in soybeans.  Patience may be a virtue for now, but waiting to long could have its consequences as demand should not be as difficult to ration in a questionable global economy - as the USDA has been hinting toward by lowering demand more then expected on the last two monthly reports.

CME Options On Futures: The Basics: http://www.zaner.com/offers/?page=9&ap=tseifrie

With high volatility in a weather market, option strategies may be a good tool for hedgers and specs alike.

December Corn Daily chart:

November Soybeans Daily chart:

 

 

All this means that speculators should be looking for opportunities and producers need to look to lock up some prices while we have new crop corn above $8.00 and new crop soybeans above $17.00. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Please check out my Blog at: http://tedseifriedfutures.com/

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?rid=Seifried

Futures, options and forex trading is speculative in nature and involves substantial risk of loss.  This commentary should be conveyed as a solicitation for entry into derivitives transactions.  All known news and events have already been factored into the price of the underlying commodities discussed.  The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION

Log In or Sign Up to comment

COMMENTS

No comments have been posted, be the first one to comment.
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions