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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.

Crop Progress 7/2

Jul 02, 2012

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY 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.   

 

With hot and dry conditions at the end of last week, traders are looking closely at the effect that might of had on the condition of crops.  The USDA confirmed traders fears with another sharp decline in corn and soybean conditions.

The USDA is reporting corn silking at 25% as compared to 10% last week, 5% last year and 8% 5-year average.  Corn condition did take a hit from the hot and dry conditions late last week.  The USDA is reporting the corn crop at 48% good to excellent down 8% from last week at 56%.  Corn conditions are 21% lower then last year which was at 69% good to excellent at this time.

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

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

See December Corn Daily chart:

Spring wheat is now 73% headed compared to 57% last week, 12% last year, and 35% 5-year average.  Spring wheat conditions declined 6% to 71% good to excellent compared to 77% last week and 70% last year.

See December Wheat chart:

Soybeans are 26% blooming compared to 12% last week, 7% last year and 12% five year average.  The USDA is reporting the soybean crop at 45% good to excellent down 8% from last week at 53%.  Soybean conditions are 21% lower then last year which was at 66% good to excellent at this time.

Options on Beans for People Who Don`t Know Beans About Options: http://www.zaner.com/offers/?page=8&ap=tseifrie

See November Soybean Daily chart:

The reaction to this report could be bullish due to the sharp decline in corn and soybean conditions and the overall poor conditions of the crop.

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 in the $6.50 range and new crop wheat in the $7.90 range. 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 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. 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

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COMMENTS (1 Comments)

longkansascitywheat.wordpress.com - Nashville, TN
Hi Ted, Dome of Death says, "Rumors of my death are exaggerated." What are your latest thoughts on September corn?
1:02 AM Jul 3rd
 
 
 
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