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The Ted Spread

RSS By: Ted Seifried,

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.

New Crop Corn and Soybeans under Pressure from Weather

Jun 13, 2012

Both new crop corn and new crop soybeans were under pressure today due to a forecast calling for a wide spread rain event next week.  The thought is that the yield eating "dome of death" or hot and dry ridge may be dissipating.  However, we are still going to see some of the hottest temps of the year in front of the rain chances we see in the forecast.  I would think that as we move toward the hot temp this weekend corn and soybeans could find some footing and maybe take back some of today's losses.  The fact of the matter is that corn conditions have dropped 11% in the good to excellent category over the last three weeks.  The heat in the coming days will add to that stress and until the rain hits the ground there is still a chance that the drier areas will miss out.

CME Options On Futures: The Basics:

Old crop corn has a different story.  Basis continues to widen with cash well over futures.  Once we get into the delivery period for July corn we will likely see commercials use the CBOT board to try to force deliveries along the Mississippi at a large discount to cash.  This should continue until the discount in futures is small enough that there is no longer any benefit.  This could come from either higher futures, lower basis or (most likely) a combination of the two.  Either way this could definitely provide strong support to the old crop corn prices and in turn may spill over into the new crop as well.

December Corn Daily chart:

When Does Weather Matter:

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 $5.00 and new crop soybeans above $13.00. 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 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

Please check out my Blog at:

Additional charts, studies, and more of my commentary can be found at:

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