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November 2011 Archive for Hedging Corn and Soybeans

RSS By: Howard Tyllas, AgWeb.com

Howard Tyllas is currently a member of the Chicago Board of Trade and registered with the Commodity Futures Trading Commission as a floor broker and as a Commodity Trading Advisor.

December Corn Daily Numbers & Trade Ideas for 11/21/11

Nov 22, 2011

This report was sent to subscribers on 11/18/11 9:20 p.m. Chicago time to be used for trading on 11/21/11.

December Corn

After the close recap on 11/21/11: My pivot acted as resistance and was 6.09 1/2, .01 3/4 from the actual high, and my support was 5.96 1/4, .03 from the actual low.

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hours before today's open outcry?

All charts and numbers for 11/22/11 have already been sent to subscribers at 4:55 pm.

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December Corn


6.29 ¼
6.17 ¼
-----------6.09 ½ Pivot
6.01 ½
5.96 ¼

5 day chart.... Down from last week same day
Daily chart ...... Down
Weekly chart .......Sideways
Monthly chart .... Sideways 6.56 is the 200 DMA
ATR 17 ¼ Oversold 13%

december corn 11 21 11

Downtrend line is strong resistance crisscrossing the uptrend line which also acts as resistance now. The low of October supports at $5.72 ¼.     

In my daily corn numbers on Friday; my pivot acted as resistance and was .02 ¾ (.00 ½ in open outcry) from the actual high; my support was .01 ¾ from the actual low.  

For 11/21/11:

Grains: Spot on numbers. Most notable fact I take away from Friday's trade is that soybeans put in a "double bottom" before closing higher on the day. New low for the run and closed higher bodes well for another up day to follow on Monday. I have used $11.52 for quite awhile, and although fundamentals change, the number does not. I look for some kind of correction in soybeans to start the week, no matter if we go lower down the road.

As I said the other day, last year in November corn had traded $4.75, and there is reason if SA comes in good and our weather looks favorable to plant, we could be trading at that level again by April. With a ratio of 2.1 in price, 1 corn versus 1 soybean, $4.75 corn would value soybeans at $10. (2.1 X the price of corn = soybean price) It all comes down to weather and yield when you look at the bigger picture, no other factor can add or take away hundreds of millions of bushels like the weather can. Day trading or short term trading of any kind has no concern with where prices might be in 3, 6, or 11 months away, but my producers must be concerned. This is their income we are talking about, and without proper protection from prices going actually below the cost of production, they could be worse off than the unemployed, they could be paying to work.

Nobody can accurately predict where prices will be in 11 weeks let alone 11 months, only can offer guesses. What I can do is look at the fundamentals and allow for parameters backed by past chart action. It takes time to equate fundamentals into "value" areas, but what I know I can do is teach you to have confidence in chart lines and formations that have higher odds of "holding" values, rather than being random without them. Most important is teaching you to adopt a strategy that fits YOUR needs. The strategy I am using for my hedgers allows them to have a bullish or bearish bias, but in a position that has a maximum margin, and potential to make unlimited profit. Participating in a low key manner awaiting an opportunity the market gives you to better your position (income), is indeed how a true business is run, not trying to take a speculative position and mask it by calling it a "hedge position". The only risk is not having enough protection if the market goes down; on the other hand you do not feel like you missed something no matter how high the market can go because the strategy allows making more money while protecting what you already made.

The question becomes, at this price level based on your average trend yield, is it profitable enough to lock in a very good income for 2012? If it is, I would want to start to hedge. Considering we waited until year end in 2010 before hedging December 2011 at $5.50 and all were glad to do so, we are just under $5.60 now. Everyone eventually locked in $7, and many have $7.40 minus costs. 

December 2012 corn is approaching the low in October of $5.49, and there is good resistance at the gap of $6.20 ¼ so $5.85 is the middle (pivot) and I would hedge there if we get the chance. Before the report trading above $5.90 has been normal since May, but after that last report on the 9th, 2013 stocks will be burdensome and the fundamental outlook has changed if acreage and trend yields are realized. Last November, December 2012 corn traded just below $4.50 and rallied to $5.59 (where we are now) before correcting down to $5 (low of 2011) in February posting a double bottom having the same low in January. The market never looked back in this historic all time high year that was capped at $6.73 ½ on 8/31/11. $4.50 to $6.73 with $5.61 in the middle, using the 2011 low of $5 the middle or pivot would be $5.86.  

December 2011 corn has strong resistance at the crisscross of up and downtrend lines at $6.40, support will be $5.99 ¾ and then the lows of September at $5.72 ¼, low of March near $5.45, and the low of the year is $5.36. The PRC was buying when at $5.75 in June and late September, they might not be as aggressive this time unless their intention is to build reserves. 

If January soybeans can rally to the downtrend line I want to take the sell signal, and risk .07 on the day trade, but I would also take a longer term trade using a $12.25 buy stop risking almost $.30 but looking for a reward of a retest of the $11.52 support. November 2012 crop is at $11.81, actually higher than the November 2011, and November 2012 is harder to hedge than the 2012 corn. It all comes down to income, and if it really good then locking some of it in is the prudent thing to do. If the market goes down then you will not need a rally in order to lock in what price you can get today, and if the market goes up you will be able to make more money than the original hedge anyway. Lock in income even if it goes down; make more income if it goes up.

Producers also must live within their means, and it requires a credit line in order to have money to hedge both the old and the new crop. They are in much better shape than last year with record incomes, but it still requires money to cover both crop years, so it might cost more because you might want to leave some more room to the upside, and only a minimum put spread that will require more if we plunge. Selling cash or futures and buying a call or call spread is not the cheapest way to go, and cannot compare to my strategy. First thought should be on the corn in the bin, then 2012.

They settled January soybeans unchanged, so the new low for the run did not close higher. It would not surprise me to see the market rally to the downtrend line, or to test $11.52 again. Corn is just as likely to test the downtrend line as it does retesting $5.72 ¼. That is why I want to continue to trade the numbers without bias and risk $.06 in corn and $.07 in soybeans using a stop to protect.    


11/18/11:

Grains: Spot on soybean numbers, and spot on corn resistance but support was helpful at best. Damage has been done to the corn chart, in fact the biggest 1 day decline since the bearish September corn stocks report that added 164 MB. On last year's November 2010 report we were looking at ½ as much carryout for 2012 as next year's crop will carry into 2013. Two stats bother me, the 19 year drought cycle on one hand, and the fact that it is rare when we get a subpar yield 3 years in a row. The last time we went 4 years in a row was 35 years ago. One thing is for sure, next year we could be at $3 or $13. That makes the upside much more favorable as far as risk reward goes. The lower the better when you roll, which makes less downside to protect, and an easier springboard for a $.50 gain in the bin (or using a futures contract).  

I want to sell rallies old crop or new crop unless weather turns unfavorable in SA. They are having a record crop as is the PRC, exports are lousy, but I would expect the PRC to be interested where they were last time at $5.75. Until the January Final report I would expect $5.75 to hold. Some of the pressure had to come from long term December positions with first notice day approaching. Market is realizing we are not the only game in town especially when producing record crops, and the cheap wheat is not helping corn feed. We are planning to plant 2 to 4 million more acres of corn, and the price is at historic highs.

Lastly, White house has changed the reporting system cancelling the Census Bureau's of monthly soybean crush updates, and now rely solely on the NOPA monthly crush updates. This is one of many examples of less transparency in a market that Dodd/Frank mandated more oversight and transparency in commodity futures. I am not sure I can believe any of it except for the final report, the last 2 years they have found significant amounts of corn late in the year. Yes higher quality corn can use less feed use, and the newer ethanol plants are more efficient using less corn, but this does not make up for what has been added. Commercial elevators are strict in their reporting requirements, but farmers can lie through their teeth until they sell and put it into commercial hands where it must be reported. Discrepancies and faith in the USDA reporting system has always been contested more or less, but I only look at what the market is looking at, and I only care how a market reacts to a report, not the report itself. As you have just learned last week, a bullish report produced a bearish reaction, and I am focused on price and time instead.

I keep focused on fundamentals for bias in what price level should support or resist, but I am always open for the "unimaginable" to happen. The USDA indicated that 80% of their objective corn plots were harvested BEFORE the October crop report, and only 33% of the soybean plots. In 4 of the last 5 years soybeans have revised the October to January final by a significant 75 MB or more, 2 years were revised higher, and 2 years were lowered. "Anything can and will happen" I always say, so I want to know what I want to do if the market provides a good opportunity, and where I will exit the idea (where the stop proves the number or chart level did not hold) or take a profit. 

When everyone (especially the people who recommend trade ideas but make money generating commissions) gets bearish we will be close to a bottom, and then I will want to buy the closest support I can. Anyone who has watched commodities for several years are amazed when they watch analysts and people who recommend trades, seem to sell the low and buy the high. They always have a story why they should not have lost money. They seem to take big losses and make small profits. Are they all bearish yet? If they are and are selling, I expect a rally from these levels, and where they get stopped out, is where I want to take the sell signal looking for lower prices. They might be right and we will be much lower than now, but their problem as well as most traders is to manage risk and time (to be proven right or wrong before losing too much).

On the bullish report day, I talked many into not buying their out of the money calls back only because of the chart and the price action, not because of what the report said. Some bought a few but less than what they would have without some words from me the "unemotional one". I said they should do at least some because they called to do so, and there was nothing wrong with taking some profits and risk off the table, but overdoing it all at once is not the logical thing in my mind to do. I do not have an all or nothing mentality except when it comes to exiting a losing trade; I get out of all when I place a stop. 

I want to trade the trade the numbers without bias and risk $.06 in corn and $.07 in soybeans using a stop to protect.          

11/17/11:

Grains: Spot on soybean numbers, accurate corn numbers. What changed, nothing, trading numbers now! Market is restricted to the sideways pattern as I outlined yesterday. December corn traded below $5.60 in March, and 1 year ago in November, this December 2011 corn contract traded $4.75. 

Next year's crop must consider hedging 2012 corn with little at this time to rally above $6, so the risk is to the downside. 19 year drought cycle has never gone past 5 years without a notable dry spell in the 140 years of recorded history. 2012 is the 5th year past the 19 year mark. The dryness in the Corn Belt now is the opposite of last year's plentiful subsoil moisture. On the other hand, with the possible 2 million more in acreage to be planted this year, and a return to a normal trend yield of 160+ BPA, 2013 will have 1.35 BB in carryout stocks and that will be burdensome and will require $4.50 corn to spur sales. Producers are not sure if they want to plant soybeans or corn at this time, and might need to wait until planting intentions in March before they will have the answer. Since I believe we could be $1 to $2 higher or lower next year, using my strategy will protect some of the downside ....", and allow for the first $1 of the upside to start. Since my producers are contemplating what to do with 2011 corn now that the basis is so attractive, 2012 is on the backburner for now.

I did roll some corn from December to March, buying the March $6.60/$6 put spread and ...... Subscribe now!       

 

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The 6 markets now covered daily are Soybeans,Corn, Crude oil, S&P, 30 yr TBond and Gold

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May Your Next Trade Be The Best                        


Howard Tyllas    

 

Tel.1-312-573-2699, 1-312-823-9189

 

Disclaimer: No guarantee of any kind is implied or possible where projections of future conditions are tempted. Futures trading involve risk.In no event should the content of this be construed as an express or implied romise, guarantee or implication by or from Howard Tyllas, that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are no indication of future performance.

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December Corn Daily Numbers & Trade Ideas for 11/14/11

Nov 15, 2011

This report was sent to subscribers on 11/11/11 3:45 p.m. Chicago time to be used for trading on 1/14/11.

December Corn

december corn 11 14 11

After the close recap on 11/14/11: My pivot acted as resistance and was 6.40 1/4, .04 1/2 (only .01 1/4 in open outcry) from the actual high, and my support was 6.30 1/4, the EXACT actual low.

Subscribe now! Do yourself a favor and get your numbers after the market is closed to be used for the next session trading.

Ask yourself how much would it have been worth to read my comments and get my numbers 14 hours before today's open outcry?

Sign up: Free 1 Day Trail of Daily Numbers & Trade Ideas

Sign up: Free Learn a better way to hedge for farmers After you learn (No costs or fees) I will execute your hedges with you on the phone with a floor broker on the grain floor inside the pit trading. You will hear bids and offers and can direct or change your order.

December Corn


6.78
6.66 ¼
6.50 ½ 6.55 is the 200 DMA
-----------6.40 ¼ Pivot
6.30 ¼
6.22 XX
5.99 ¾
5 day chart.... Down from last week same day
Daily chart ...... Down
Weekly chart .......Sideways
Monthly chart .... Sideways 6.55 is the 200 DMAverage
ATR 16 ½ Oversold 20%

December Corn Chart

For 11/14/11: Downtrend line is resistance, and then the gap of $6.85 ¾. The uptrend line near $6.36 is pivotal and $6.22 supports.

Notice how the uptrend line was perfect support on Friday, this is not coincidence.

In my daily corn numbers on Friday; my pivot acted as resistance and was .02 ¼ (only .00 ¼ in open outcry) from the actual high; my support was .06 ¼ from the actual low.  
 
11/14/11:

Grains: Spot on grain resistance and accurate support numbers. All year long we have seen the marketplace buy corn and sell soybeans. Friday was probably just a breather on the spread, and needs more daily bars to have more evidence that a near term bottom is in place. Bullish report did nothing to prevent the market from seeking lower values in an attempt to spur exports; this is the function of a futures market. Fundamentals are still unknown but not to the extent as 3 months ago. Fundamentals have helped me in the grain market because I only use it for a bias, and trade strictly on the chart performance. All I have seen it do for speculators is to justify the reason they are losing more in a trade idea than they should. I use a stop to take me out of trades because the number or chart level did not hold, and I know what the risk is.

Price parameters I have said for weeks remain the same. Corn market touched the uptrend line and closed just above it. We have not traded below $6.30 since 10/13 so that has proved to be recent support and will be the first target for the bears this week. Below there is $6.22, and after that there is nothing until $6. Downtrend line starts the week at $6.51, and then $6.66 ¼ which has capped all rallies since 9/22. Outside markets could have more of an effect now since grain fundamentals have been priced in. The dollar, crude oil, and then the equities markets will have the biggest influences.

November soybeans threaten $11.52, then $11.35, and I would be surprised if soybeans went below there until SA is more assured of a good crop. $12.10 is where the downtrend line comes in to provide strong resistance now. Not much more to be said and I let my strategy do the talking. The only thing my producers or speculators can do on the breakdown to support areas, is buy back the calls they sold and resell if we can rally for whatever the reason.

Producers can start to roll ½ their corn hedge to the March... Subscribe Now!... Hedge margin right now is $1750 for corn and $2500 for soybeans per contract. That will be more than enough to... I want to continue to trade the numbers without bias and risk $.06 in corn and $.07 in soybeans using a stop to protect.


11/11/11: Grains: Spot on grain numbers. Production is becoming more known as time goes on, and that takes away possible rallies past $6.85 ¾ or $7. Any rally for whatever reason near those resistances warrant taking a sell. SA weather is perfect, exports are like a toothache, and funds are focused more on crude oil and gold than the grain market that lacks potential rally potential. They sold 12,000 corn, 6,000 soybean, and 4,000 wheat contracts on Thursday. On the other hand the recent report shows enough tightness to have the potential for a $1 rally if in January or February SA weather turns for the worst. I think $6.22 corn will hold with the strong sideways action, and that is what keeps me thinking that soybeans should hold $11.52 or $11.35 unless corn closes below $6.22. The last 4 weeks in corn has been the most boring of the year, and I see more of the same for now. You need one of 2 things for a rally in any market, supply and demand. If either is strong alone and the other is not, rallies are always limited, but when you have tight supplies and strong demand the sky is the limit.

Subscribe now..... ...you can always "morph" to reflect you're bullish or bearishness. This limits your risk as you have your thoughts (bias) reflected in the strikes used. It is the slowdown of risk, allow to "trade" so to speak using your bias, and not have to manage risk as you would with a futures or cash position. Farmers should look at the success rate of speculators to know that the odds are against them to forecast future prices and manage risk, but with my strategies it risks little to go after a much greater reward.

Bottom line for producers, whenever you want the upside back you "roll" out of the December options. If you .... I want to trade the numbers without bias today and risk $.06 in corn and $.07 in soybeans using a stop to protect.

11/10/11: Grains: How well did the people who use fundamentals alone for trade ideas do after the bullish report? They were completely right if they were bullish the report and lost money being correct the report result and wrong their trade idea being long. People who were short because the markets were at resistance levels were wrong the report but right on their trade idea derived from the chart. The chart is always correct being they are factual, reports can produce results opposite of what they say, so I use fundamentals to help set parameters of extremes the charts can produce based on the fundamentals known and unknown. This is another example why I have always said, "I would rather be right the market for all the wrong reasons, than right the fundamentals and lose money".

Maybe I will go into more detail this weekend about the fundamentals on this report, but in a nutshell, corn production was lowered 1.4 BPA to 146.7 BPA and was offset with 100 MB less usage. Soybean yield was shaved .2, .1 BPA below what was expected, leaving 3 MB more in soybean stocks, and 48 MB more in corn stocks than expected. I would expect both to come in with actually smaller yields on the January Final Report because less yields become less on the final. When yields dropped from Sept to Oct, and then again from Oct to Nov, 7 times out of 7 times since 1989 it was less on the January final.

There is much I could talk about when it comes to the future implications, but we have plenty of time to contemplate the future, I want to focus what is in play for my speculators (trading mostly in the now) and for my producers while keeping an eye on the 2012 crop to be hedged. As long as my producers have enough funds.......

I read a service today seem very proud to have reported they got a $5.44 board price for 2011 corn, and they were un-hedged for a long period of time only selling percentages away at a time. My producers all locked in $7 to $7.60 board price minus expenses, and had some protection on all they wanted to hedge (about 75%) of expected production until the crop matures and they needed to hedge more.

Outside market certainly had something to do with the negative action, but with a bullish corn report that was not enough to bring higher values, has more potential downside to probe. This report does underpin corn and should find good support at $6.22, and then even more at $6. The bullish picture fades below the uptrend line that comes in now at $6.36, and I would be uncomfortable being long below there. I would try to buy again at the $6.22 or $6 marks, but I would need to see the preceding day's setup in order to determine to buy for more than a day trade. If the sky is falling worldwide, I would not try to hold any asset overnight. The downtrend line is pivotal on Thursday, and I want to be a seller below this line, and a cautious buyer when above but for only a minimum contract trade size. Even though $6.66 ¼ has been my number for weeks as resistance that will be hard to hurdle, I could not work it in on a report day being so close to settlement. It was $.00 ¼ from the high of the day. This remains to be the resistance, as well as my other numbers being used, and I continue to look for the trading range affair I have been forecasting.

Soybeans bearish fundamental picture has been seen in the charts for weeks, and continues to have the downtrend line which comes in at $12.12 today as being resistance and the line for the bulls to hurdle if they want to regain control. Only real support is the low of October at $11.52 and then $11.35 FG. Below there, only the bracket line at $11.10 keeps the market from trading $10. I think the fundamentals will keep it trading from $11.10 to $12.70 going forward, and choppy $.50 rallies on profit taking.

I have reminded in almost every report, "the winner does not win and the loser gets killed". The "at the money" December $6.60 call settled at $.14 ½ down $.06 5/8, and the $6.60 put settled at $.18 ½ down $.02 1/8. The December corn futures closed at $6.56. The $6.60 put...

I want to help you stand on your own two feet. The purpose of this service is not to give trade recommendations because that does little to improve you as a trader, or to even be able to help you select a trade idea out of the many that are sold or recommended to possibly get a commission. I do tell you what I want to do and why I want to do it, and those trade ideas are also a learning tool to see how I have an approach, money management, risk management, reason for entering, exiting, and taking profits. You can see how I trade at an extreme, and when in the middle of a trading range. I try to teach how I look at the charts, and the confidence I have had for decades on the lines and formations I adhere to.

The transition to FC Stone has been made amazingly easy due to the excellent service that firm has provided me. All but 2 accounts have been opened, and the average time to open every account was 2 days after being submitted. Tomorrow I expect that most accounts will be funded, as we want to be ready to trade when we roll out of the December options that expire in 2 weeks from now. Many wired money into RJO so they would be allowed to do something if need be on report day. We will exit the RJO position and at the same time we will roll to ...subscribe.... at FC Stone just as we would have done at MFG. The nightmare would have been if the options were to have expired last Friday, and we would have been exposed since most not having a place to hedge, and even if they did, the cost and pain to get filled using a trade desk instead of my 3 way call to the floor is not something my producers want to go back to doing. I did not think we were going anywhere after the report, but if we did rally strongly, my producers would have needed to use more of their own cash rather than if at MFG they had the money made to lose without additional funds. So it's working out well for all at my firm. Once we exit the current position at RJO, we will close and have our funds wired back to us. Nobody at my firm has been forced into meeting their margin call at RJO, but is limited to liquidation only. I will say that at RJO have been understanding of my producers and realize that the strategy has a known risk and continues to not be near a "debit" situation. They have been very helpful.

The best time to roll or start to is when you want the upside back... Subscribe.... I want to trade the numbers with a bearish bias (not take the buy signal above the pivot) and risk $.06 in corn and $.07 in soybeans using a stop to protect.

Want to know what I think for tomorrow and going forward?
 

The 7 markets now covered daily are Soybeans,Corn, Crude oil, S&P, 30 yr TBond, Gold, and Nat gas

My numbers usually are sent at least 12 hours (via your email) in advance of the next day open outcry session. Subscribers use them as best suited to their own needs and sometimes that involves the overnight trade.

Find out why my subscribers from Canada, China, Czech Republic, Germany, India, Switzerland, South Korea ,Turkey and the UK keep renewing this service.

HowardTyllas Daily Numbers & Trade Ideas cover 7 markets for less than $10 a day,

HowardTyllas Daily Numbers & Trade Ideas is designed to help you plan your trading strategies for the coming day.

$199.00 USD for each month, renewable monthly

 

The weekly service is "Monday only" and comes out usually by Saturday morning so you can prepare for Sunday night and Monday's trade.
 

WeeklyService: 13 weeks for $129 total subscription fee.

Copy and paste if the link is not working.
 

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May Your Next Trade Be The Best


Howard Tyllas

Tel.1-312-573-2699, 1-312-823-9189

Disclaimer: No guarantee of any kind is implied or possible where projections of future conditions are tempted. Futures trading involve risk.In no event should the content of this be construed as an express or implied romise, guarantee or implication by or from Howard Tyllas, that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are no indication of future performance.

HowardTyllasDaily Numbers & Trade Ideas $ 199.00

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WASDE Report for 11/9/11

Nov 09, 2011

Sign up: Free 1 Day Trail of Daily Numbers & Trade Ideas

Sign up: Free Learn a better way to hedge for farmers After you learn (No costs or fees) I will execute your hedges with you on the phone with a floor broker on the grain floor inside the pit trading. You will hear bids and offers and can direct or change your order.

WASDE Report for 11/9/11

OILSEEDS: Total U.S. oilseed production for 2011/12 is projected at 91.2 million tons, down 0.5 million from last month due to lower soybean and cottonseed production. Soybean production is forecast at 3.046 billion bushels, down 14 million from last month. The soybean yield is forecast at 41.3 bushels per acre, down 0.2 bushels from last month. Soybean exports are reduced 50 million bushels to 1.325 billion mainly due to a slow export sales pace through October. Soybean ending stocks are projected at 195 million bushels, up 35 million from last month.

Soybean oil ending stocks and exports for 2011/12 are reduced this month due to lower beginning stocks resulting from changes in the 2010/11 soybean oil balance sheet. Changes for 2010/11 include reduced soybean oil production and ending stocks. These changes are based on industry indications of soybean crush and soybean oil stocks. Soybean meal production and domestic use for 2010/11 are also reduced due to lower October-September year crush. Soybean meal changes for 2011/12 include reduced domestic use and higher exports.

The U.S. season-average soybean price range is projected at $11.60 to $13.60 per bushel, down 55 cents on both ends of the range. The soybean meal price is projected at $310 to $340 per short ton, down $25.00 on both ends of the range. The soybean oil price range is projected at 53 to 57 cents per pound, unchanged from last month.

Global oilseed production for 2011/12 is projected at 454.8 million tons, up 1.3 million tons from last month. Global soybean production accounts for a quarter of the increase with larger crops projected for Brazil, Paraguay, and Mexico. Brazil soybean production is increased 1.5 million tons to 75 million with improved yield prospects related to rapid planting progress and good early season moisture throughout the country. These gains are partly offset by lower production projected for Argentina, which is reduced 1 million tons to 52 million due to reduced area as producers shift to corn. Global sunflowerseed production is raised due to larger crops in Ukraine, EU-27, and Argentina. Increased yields are projected for Ukraine as harvest nears completion. Other changes include increased rapeseed production for EU-27, increased cottonseed production for Turkey, and increased palm oil production for Malaysia.

Global oilseed trade is projected at 113.3 million tons, down 0.8 million. Reduced soybean exports for the United States and Argentina are only partly offset by increases for Brazil and Paraguay. Soybean imports are reduced for Japan and Russia. Global oilseed crush is reduced 0.2 million tons to 389.1 million with reduced soybean crush in Argentina partly offset by increased sunflowerseed crush in Ukraine. Global oilseed ending stocks for 2011/12 are raised 0.9 million tons to 73.9 million. Soybeans account for most of the change with increased stocks for the United States and China more than offsetting lower stocks in Argentina and Japan.

WHEAT: U.S. wheat supplies for 2011/12 are lowered 9 million bushels based on updated production estimates for the states resurveyed following the September 30 Small Grains report. Adjustments to production in these states, where significant acreage remained unharvested in early September, lowers production estimates for Hard Red Spring (HRS) wheat and durum. An increase in white wheat production is partly offsetting. Projected use for 2011/12 is unchanged for all wheat; however, domestic food use is projected higher for Hard Red Winter (HRW) wheat and lower for HRS wheat. Projected exports are raised for HRS and lowered for HRW. All wheat ending stocks are lowered 9 million bushels in line with the production change. The seasonaverage farm price is projected lower at $7.05 to $7.75 per bushel compared with $7.10 to $7.90 last month, reflecting the latest reported prices.

Global wheat supplies for 2011/12 are projected 2.6 million tons higher mostly reflecting higher production in Kazakhstan and EU-27. Kazakhstan production is raised 2.0 million tons as an extended harvest period capped off a nearly ideal growing season, confirmed by the latest government reports. EU-27 production is raised 1.2 million tons with further upward revisions for France and Spain and higher reported production in the United Kingdom and Czech Republic.

Partly offsetting these increases is a 0.5-million-ton reduction for Argentina and 0.3-million-ton reductions for both Algeria and Ethiopia. World wheat trade is raised for 2011/12 with higher expected imports for China, a number of African countries, including Morocco and Algeria, as well as for Brazil and several FSU-12 countries neighboring Kazakhstan. Partly offsetting is a reduction in projected imports for South Korea where more corn feeding is expected. Exports are raised 1.0 million tons each for EU-27 and Russia reflecting larger supplies in EU-27 and the continued heavy pace of shipments from Russia.

Global wheat consumption for 2011/12 is raised 2.4 million tons with increased feeding expected for Kazakhstan, Brazil, and Serbia. Larger crops in Kazakhstan and Serbia support more wheat feeding. Recent rains in southern Brazil have reduced wheat quality in some areas raising the potential for more feeding. Higher consumption is also expected for EU-27, Ethiopia, Kenya, and several smaller FSU-12 countries. Global ending stocks are projected 0.2 million tons higher. Rising stocks in Kazakhstan, China, and Morocco are partly offset by reductions in major exporting countries including Russia, Argentina, and EU-27.


COARSE GRAINS: U.S. feed grain supplies for 2011/12 are projected lower with reduced corn and oats production more than offsetting small increases for sorghum and barley. Corn production for 2011/12 is forecast 123 million bushels lower with the national average yield forecast 1.4 bushels per acre below last month. At 146.7 bushels per acre, this year's yield would be the lowest since 2003/04. Feed and residual use is lowered 100 million bushels with the smaller crop and further reductions in the outlook for broiler production. Projected U.S. ending stocks are lowered 23 million bushels.

The season-average farm price is unchanged at $6.20 to $7.20 per bushel.Other 2011/12 changes include small adjustments to projected ending stocks for sorghum, barley, and oats, reflecting this month's production changes. Projected sorghum exports are reduced 10 million bushels as sales and shipments continue to lag earlier expectations. A 10-million-bushel increase in expected sorghum food, seed, and industrial use is offsetting. Projected farm prices for sorghum are unchanged, but projected ranges are narrowed for barley and oats, and the barley farm price is projected lower based on reported malting barley prices.

Changes for 2010/11 corn mostly reflect a 13-million-bushel increase in food, seed, and industrial use with usage raised for sweeteners, starch, and ethanol, all based on the latest available data. In addition, there are small adjustments to imports and exports based on August trade data from the U.S. Census Bureau. These changes reduce 2010/11 feed and residual use 11 million bushels.

Global coarse grain supplies for 2011/12 are projected slightly lower with reduced U.S. corn production and lower EU-27 rye production more than offsetting higher Argentina sorghum production, higher EU-27 corn, barley, oats production, and higher Kazakhstan barley production. Corn production is lowered for a number of countries with the biggest reduction for Mexico where production is lowered 3.5 million tons. A late start to the summer rainy season and an early September freeze in parts of the southern plateau corn belt reduced yields for Mexico's summer crop. Lower expected area for the winter crop, which will be planted in November and December, also reduces 2011/12 corn production prospects.

Reservoir levels are well below those necessary to sustain a normal seasonal draw down in the northwestern corn areas which normally account for 70 to 80 percent of Mexico's winter corn crop. Increases in 2011/12 corn production for a number of countries partly offset reductions in Mexico, the United States, and Serbia. Corn production is raised 2.5 million tons for China with increases in both area and yields in line with the latest indications from the China National Grain and Oils Information Center. EU-27 corn production is raised 1.9 million tons mostly reflecting higher reported output in France, Romania, and Austria. Argentina production is raised 1.5 million tons with higher expected area. FSU-12 production is raised 0.7 million tons with higher reported yields in Belarus and Russia. There are also a number of production changes this month to corn and sorghum production in Sub-Saharan Africa which reduce coarse grain production for the region.


World coarse grain trade for 2011/12 is raised with increased global imports and exports of barley and corn. Barley imports are raised for Algeria, Saudi Arabia, and Jordan with exports increased for EU-27 and Russia. Corn imports are increased for China, Mexico, and South Korea. Higher expected corn exports from Argentina and EU-27 support these increases. Higher sorghum exports from Argentina offset the reduction in expected U.S. sorghum shipments. Global corn consumption is mostly unchanged with higher industrial use and feeding in China and higher corn feeding in EU-27 and South Korea offsetting reductions in Mexico and the United States. Global corn ending stocks are projected 1.6 million tons lower with reductions in EU-27, Mexico, Brazil, and the United States outweighing increases for China and Argentina.


SUGAR: Projected U.S. sugar supply for fiscal year 2011/12 is increased from last month, as higher beginning stocks and imports more than offset lower production. Sugar production is decreased 50,000 tons, based on lower forecast U.S. sugarbeet production. Imports from Mexico are increased based on increased supplies (higher beginning stocks and increased tariff rate quota imports) and reduced consumption and ending stocks in Mexico.

This month=s 2010/11 U.S. sugar supply and demand reflect final estimates of stocks, production, and use in Farm Service Agency's Sweetener Market Data report and final import data from the Foreign Agricultural Service. Ending stocks are modestly higher than estimated last month. Mexico=s government data for fiscal-year 2010/11 are the basis for decreasing imports and domestic use and increasing ending stocks. Note: Beginning this month, sugar supply and use data in the WASDE report will be shown in Aactual weight.@ The WASDE report will continue to show U.S. sugar supply and use, including imports from Mexico, in raw value. Raw value for Mexico sugar converts from actual weight by multiplying by 1.06. The Foreign Agricultural Service will continue to report world sugar supply and use, including for Mexico, in raw value.


LIVESTOCK, POULTRY, AND DAIRY: The 2012 forecast of total red meat and poultry production is reduced from last month. Beef production is reduced due to slightly lower cattle slaughter during the year and slower growth in carcass weights. Broiler production is forecast lower as sharper declines are expected in bird numbers during late 2011 and into 2012. Turkey production is raised as prices are expected to favor expansion during 2012. Pork production is unchanged. For 2011, beef and broiler production forecasts are reduced, but pork and turkey production is increased. Egg production is forecast higher in the last quarter of 2011 and for 2012.

The beef import forecast is raised slightly for 2011. Beef export forecasts for 2011 and 2012 are raised slightly as strong global beef demand supports continued gains in U.S. exports to a number of Asian markets. Small changes are made to U.S. pork imports for 2011 and 2012 and pork exports for 2011. Broiler exports are raised for 2011 and 2012 on strong demand in a number of countries and a relatively weak dollar.

Cattle prices are forecast higher for the remainder of 2011 and through 2012. Strong demand is expected to carry into next year along with tight cattle supplies. Hog prices are raised for 2011 and 2012 on demand strength and support from lower beef and broiler production. Broiler prices are lowered for the last quarter of 2011 and the first quarter of 2012 as weakness in domestic demand and current overhanging supplies pressure prices.Milk production forecasts for 2011 and 2012 are unchanged from last month. Commercial exports are forecast higher for 2011. Fat and skim-solids ending stocks for 2011 are lowered.

Cheese, butter, and whey prices are forecast higher for both 2011 and 2012, but the nonfat dry
milk (NDM) price forecast is reduced for 2011 and unchanged for 2012. Class III prices are raised for 2011 and 2012 on the increased price forecast for cheese and whey. The Class IV price is unchanged for 2011 as the higher butter price is mostly offset by a lower NDM price forecast. However, for 2012 with an unchanged NDM price forecast, the Class IV price forecast is raised due to higher butter prices. The all milk price is forecast at $20.10 to $20.20 per cwt for 2011, and $18.05 to $18.95 per cwt for 2012.


COTTON: The 2011/12 U.S. cotton supply and demand estimates show lower production, exports, and ending stocks this month. Production is reduced 308,000 bales due to decreases in Texas and the Southeast. Domestic mill use is

unchanged from last month, but exports are reduced 200,000 bales. Ending stocks are lowered to 3.8 million bales, representing a stocks-touse ratio of 25 percent. The forecast marketing-year average price received by producers of 84 to 96 cents per pound is reduced 3.5 cents on the lower end and 6.5 cents on the upper end of the range, reflecting recent market trends.

The 2011/12 world cotton forecasts include higher beginning stocks offset by lower production.Beginning stocks are raised due mainly to adjustments in Turkmenistan for prior years. World production is lowered slightly, as reductions for the United States and Argentina more than offset an increase for Turkey. World consumption and trade are reduced marginally, with world ending stocks virtually unchanged.


RICE: U.S. all rice production in 2011/12 is forecast at 188.1 million cwt, 1.2 million above last month due to an increase in yield. Average all rice yield is estimated at 7,167 pounds per acre, up 44 pounds from last month, and the second highest yield on record. Harvested area is unchanged at 2.62 million acres. Long-grain rice production is raised 0.7 million cwt to 117.5 million, while combined medium- and short-grain production is increased 0.4 million to 70.6 million. No changes are made to rice use for either all rice or the rice by-class forecasts. All rice domestic and residual use is forecast at 127.0 million cwt, and all rice exports are forecast at 91.0 million, both down from a year ago. All rice ending stocks are forecast at 37.5 million cwt, up 1.2 million from a month ago, and a decrease of 10.9 million from the previous year.

The long-grain, combined medium- and short-grain, and all rice 2011/12 season-average farm price forecasts are unchanged from last month at $13.50 to $14.50 per cwt, $15.50 to $16.50 per cwt, and $14.00 to $15.00 per cwt, respectively.

Global 2011/12 rice supply and use are lowered from a month ago. World 2011/12 production is forecast at a record 461.0 million tons, down 0.4 million from last month due mainly to decreases for Burma, Cambodia, Laos, and Thailand, which are partially offset by an increase for China.

Thailand's 2011/12 rice crop is lowered nearly a million tons as losses in the main-season crop from recent flooding are partially offset by an expected re-planting of some of the main season crop in the Northern Region along with an expected record dry-season crop. Flooding also lowered crop prospects in Burma, Cambodia, and Laos. China's 2011/12 crop is raised 2.0 million tons to a record 141.0 million, due to an increase in harvested area.

Harvested area is increased based on recent indications from the government of China. The increase in global consumption is due mostly to an increase for China. Global exports are lowered slightly due to reductions for Burma and Cambodia, which are partially offset by increases for Argentina and Brazil. Global ending stocks for 2011/12 are projected at 100.6 million tons, down 0.8 million from last month, but an increase of 2.6 million from the previous year.

Want to know what I think for tomorrow and going forward?
 

The 7 markets now covered daily are Soybeans,Corn, Crude oil, S&P, 30 yr TBond, Gold, and Nat gas

My numbers usually are sent at least 12 hours (via your email) in advance of the next day open outcry session. Subscribers use them as best suited to their own needs and sometimes that involves the overnight trade.

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Howard Tyllas

Tel.1-312-573-2699, 1-312-823-9189

Disclaimer: No guarantee of any kind is implied or possible where projections of future conditions are tempted. Futures trading involve risk.In no event should the content of this be construed as an express or implied romise, guarantee or implication by or from Howard Tyllas, that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are no indication of future performance

November Soybeans & December Corn Daily Numbers & Trade Ideas for 10/31/11

Nov 01, 2011

This report was sent to subscribers on 10/28/11 9:30 p.m. Chicago time to be used for trading on 10/31/11.

November Soybeans

After the close recap on 10/31/11: My pivot acted as resistance and was 12.18, .00 3/4 from the actual high, and my support was 11.92, .01 1/2 from the actual low.


December Corn

After the close recap on 10/31/11: My pivot acted as resistance and was 6.53 1/2, .02 1/2 from the actual high, and my support was 6.37 1/4 FG, .00 3/4 from the actual low.

Subscribe now! Do yourself a favor and get your numbers after the market is closed to be used for the next session trading. Ask yourself how much would it have been worth to read my comments and get my numbers 14
hours before today's open outcry?

All charts and numbers for 11/1/11 have already been sent to subscribers at 4:40 pm.

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November Soybeans


12.43
12.35
--------------12.18 ¼ Pivot
12.01 ½
11.92

5 day chart... Up from last week same day
Daily chart .... Down
Weekly chart ... Sideways
Monthly chart Up $13.37 is the 200 DMA
ATR 29 Oversold 26%

nov beans 10 31 11

For 10/31/11: I continue to say "Downtrend line is resistance, daily numbers support". Notice how it was resistance the last 6 days.

In my daily soybean numbers on Friday; my resistance was .04 (pivot was .01 ¼ in open outcry) from the actual high; my support was .04 ¾ from the actual low.

December Corn 


6.66 ¼
6.61 ¾
-----------6.53 ½ Pivot & 200 day moving average
6.45 ¼
6.37 ¼ FG

5 day chart.... Up from last week same day
Daily chart ...... Down
Weekly chart .......Sideways
Monthly chart .... Sideways 6.51 ½ is the 200 DMA
ATR 18 Balanced 70%

december corn 10 31 11

Downtrend line is resistance, and the uptrend line near $6.30 is support and then $6.22.

In my daily corn numbers on Friday; my resistance was .04 ¾ from the actual high; my pivot acted as support and was .04 ¼ (.03 ½ in open outcry) from the actual low.

10/31/11:

Grains: Spot on grain numbers. Corn posted its highest close in over a month which is friendly, and now is in position to retest the $6.66 ¼ resistance. The downtrend line just above there at $6.76 will also be strong resistance for the bulls to overcome. I want to take the sell signals there for a longer term trade idea, and would have a buy stop above the gap at $6.85 ¾ to protect the idea. The uptrend line at $6.30 has been strong support the last 2 weeks.

Funds have been buying corn adding 29,200 contracts in the week ending 10/25. Maybe they will hold on into the November production report on the 9th, but I do think they will be exiting the December contract in the second half of the month to avoid delivery, and that will weigh on prices. The two downside risks to corn is higher production numbers on the November report, and if soybean prices collapse taking corn with it.

Funds bought 7,000 contracts of corn and sold 7,000 soybean contracts on Friday, and was reflected by the way they closed. I still think we are range bound with the parameters I have outlined, but if soybeans close below $12.10, the door is open to retest the low of October at $11.52. There is a gap below there on the weekly continuation chart at $11.35, but if that goes there is not much support until $10. Soybeans cash basis does not enjoy the basis that corn has right now, and soybean exports really are dismal. Funds did liquidate 7,400 contracts in the week that ended 10/25, and the most bearish scenario I want you and especially producers to know is, if production numbers come in unchanged, and SA gets a good start to their soybean crop and has good weather forecasts, soybeans could go to $10, and that would certainly have an impact on corn too. Consider this, the funds could abandon the rest of their long position and actually "go short". I do not know what will occur, but I said what could occur, and that allows me to have the "unimaginable" baked into the strike prices I choose. I would expect it will hold $11.35 until more is known. No matter speculator or producer, I never want you to "think" your way into a loss that is beyond reason. Stay ahead of your protection and remember markets can and will do anything, so try and position yourself to take advantage of any rally the market can realize. Yes, I am bearish soybeans, and that does not bode well for corn either.

Today will be first notice day in November soybeans, end of the month book squaring, and my producers cannot be "tricked" from what is "said" out there anymore, and will be "treated" if the market can rally for any reason. I want to continue to trade the numbers today without bias and risk $.06 in corn and $.07 in soybeans using a stop to protect any idea.

10/28/11:

Grains: Spot on grain numbers! Does it matter to you why the market moved today if you had a profitable trade idea? I have no idea if soybeans will go up $.30 and test the high end of the trading range I have outlined, or go down $.30 and retest the solid support this week at $12.10 (tested 3 of 4 days this week). It really does not matter if soybeans can rally for whatever the reason; all my producers will make money no matter how bullish or bearish they are. This is the beauty of having a strategy that protects you for a known cost if the market goes down, yet allows you to make money if the market can go up. Even if you are a speculator, you can use this strategy except instead of actually owning the grain you produce, you would be long a futures contract.

Nothing has changed my outlook on the trading range for corn and soybeans, but the feature on Thursday was the EU decision and the confidence came back into all markets with renewed vigor. The dollar plunged which is also a key longer term in pricing commodities. So take advantage of price levels when at extremes especially if you have a fundamental opinion, and use a stop to protect the idea.

There has been a lot on buying in the December corn $7 calls which could precede the futures going there, but fundamentally and technically there is no need to do so. The pendulum would really need to swing to the extreme to do so. I am advising all my producers who are...Subscribe Now! ... would lock in more profits. My approach is based upon common sense and logic, and wants to be comfortable with what I do and in positions that can risk little and reward nicely when the number or chart formation holds.

How much can soybeans and corn rally with dismal exports, and soybeans have SA to compete with, carryout should be more than expected because the USDA looks like is overestimating exports. Production estimates in the November report will give further clues to this year's production (yield and harvested acres).

I want to continue to trade the numbers today without bias and risk $.06 in corn and $.07 in soybeans using a stop to protect any idea.

Want to know what I think for tomorrow and going forward?
 

The 7 markets now covered daily are Soybeans,Corn, Crude oil, S&P, 30 yr TBond, Gold, and Nat gas

My numbers usually are sent at least 12 hours (via your email) in advance of the next day open outcry session. Subscribers use them as best suited to their own needs and sometimes that involves the overnight trade.

Find out why my subscribers from Canada, China, Czech Republic, Germany, India, Switzerland, South Korea ,Turkey and the UK keep renewing this service.

HowardTyllas Daily Numbers & Trade Ideas cover 7 markets for less than $10 a day,

HowardTyllas Daily Numbers & Trade Ideas is designed to help you plan your trading strategies for the coming day.

$199.00 USD for each month, renewable monthly

HowardTyllasDaily Numbers & Trade Ideas $ 199.00

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The weekly service is "Monday only" and comes out usually by Saturday morning so you can prepare for Sunday night and Monday's trade.
 

WeeklyService: 13 weeks for $129 total subscription fee.

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May Your Next Trade Be The Best


Howard Tyllas

Tel.1-312-573-2699, 1-312-823-9189

Disclaimer: No guarantee of any kind is implied or possible where projections of future conditions are tempted. Futures trading involve risk.In no event should the content of this be construed as an express or implied romise, guarantee or implication by or from Howard Tyllas, that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are no indication of future performance.

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