July Soybeans

After the close on 6/16/10: My resistance  was 9.61 3/4, the exact actual high, and the pivot acted as support and was 9.46, .03 from the actual low

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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.

July Soybeans Daily Numbers & Trade Ideas for 6/16/10

Jun 17, 2010



This report was sent to subscribers on 6/15/10 6:00 p.m. Chicago time to be used for trading on 6/16/10. Everything is done by Howard Tyllas, no program or black box.

July Soybeans

After the close on 6/16/10: My resistance  was 9.61 3/4, the exact actual high, and the pivot acted as support and was 9.46, .03 from the actual low

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9.70                          near Downtrend Line Resistance                             

9.61 3/4                             

-------------9.46        Pivot

9.30 1/2 XX                  

9.20 XX                   Key Support at bracket line  

  

Trend                   

5 day chart...      Up from last week same day                                                

Daily chart   …. Sideways                   

Weekly chart …Sideways           

Monthly chart   Sideways $9.78 1/2 is the 200 DMA

ATR 16 1/2        Balanced 65%


I continue to say "Key support is at the bracket line at 9.20. Last 3 week's high is resistance".             "Bulls will be trying to recapture the long term uptrend line, and then they will want to retest the downtrend line resistance. I added the steep downtrend line that coupled with the uptrend line will make $9.52 pivotal".

The crisscross of trend lines is pivotal for Wednesday.

July Soybeans for 6/16/10: 

In my daily numbers on Tuesday; my resistance was .03 from the actual high; my pivot acted as support and was .02 1/2 from the actual low.

 Patience to wait for good locations to enter a trade will reward you by providing minimum loss if wrong, and more profit if right. You might miss trades (some glad you did) and not be as active, but this type of trading makes you a casino, not a player.  

Grains: Spot on grain numbers! Bulls had to be disappointed in the performance of soybeans, and as far as the chart is concerned it closed right on support of the crisscross of trend lines. They are up in the night session which is slightly encouraging. Corn has not been able to get the buy stops above $3.55 which was a little hard to for me to believe when soybeans had good gains. Since I think we are trading sideways for the remainder of this week, they still have a chance to do so and maybe test $3.61, if they did get there I would want to sell and risk no more than $.04.

Bottom line is the same as before, we are not going anywhere the next week or two, we should trade maybe $.10 or $.15 higher and lower from here in corn and $.20 higher and lower from here in soybeans. I prefer to take the sell signals at resistances, and not take the buy signals.

July Soybeans for 6/15/10:

  Grains: Spot on grain numbers all off less than $.01. I did not like the fact that July corn could not even get the buy stops above $3.55 let alone close above it. As I write corn is down $.02 which is not a good sign considering my pivot today is $3.52 and we are just below there as I write. (1 day trial did not get the numbers sent before part 1.)

The feel at this time of the year no matter the price is that the "what if" is always on a grain traders mind. That truly is in play but I want to remind you once again, the weather has already and continues to add on or take off "premium" day by day or week by week. The premium being the last price is trading at corn's (and grains) value and has added extra value for the possibility for a shortfall. Maybe corn would be worth $.20 less if we got through pollination without shortfall, and maybe another $.20 lower if the crop looks above average. Then we will play the early frost game, and then it will be a guessing game until we find the actual yield and production.

You can read from the market reporters about the PRC, Canadian weather, or the fact that with Monday's weekly crop production ratings for corn was the best in 76 years, but for me, I will trade these markets strictly by the chart, and let the fundamentals and "what if" be a bias at best. Depending on the chart location, I will adjust my type of trade from day trade to swing trade. You can see when the market is near a longer term resistance I want to sell to take profits if long, or a place to initiate a sell to go short. The opposite when at a longer term support where I would want to buy. Older subscribers know how I use the charts for location, and how I use the daily numbers on the days I want to day trade, or on the day when I want to enter or exit a swing or long term trade.

Bottom Line: I am bearish soybeans and corn and want to sell rallies when at resistance. I do not want to take the buy signals unless at bracket line supports, and then for only a $.10 or $.15 correction as I have said in the past. I am looking at only swing trades for small gains but would keep a small longer term short position.

  July Soybeans for 6/14/10:

  Grains: Spot on corn numbers, and not helpful soybean numbers unless you used the 1/2 way rule which was spot on both sides. I liked the way grains finished the week in the plus column, and corn closing near their high, although they could not hurdle my first resistance.

I have the exact same thoughts as I said in yesterday's comments. I would still like to sell resistance levels in soybeans and corn. Funds continue to liquidate their long positions in grains by about 70,000 contracts across the 3 grain markets in the week ending 6/8/10, even though Fund allocation had inflows of $3 billion in the month of May, mostly into precious metals. If we do get adverse weather on the horizon, I expect sidelined money to come quickly back into the shark frenzy of the "what if" crowd.   

Producers: Just to give you an idea of what December 2011 corn is going for if you wanted to hedge protecting from $4 to $3, getting your corn back at $5, for a cost of $.11 1/2 plus 4 cents in commissions. This means you have locked in $3.84 1/2 for your corn, and you no longer care what the market does between $3 and $5 until you get the crop out of the ground. Whatever you make or lose from the $3.84 1/2 in your hedge account, is offset by the grain in the bin. If above $5 you get your crop back, and below $3 you have no protection. At any time you can get bullish or bearish or adjust your position. The producers that have been with me since last year before planting know well of the opportunities using options, and how they can improve your original hedge price, and at the same time able to have a good deal of protection to the downside. Having the right to unlimited upside and at the same time being fully protected from $3.84 1/2 to $3 is worth the $.15 1/2 price tag. This strategy also provides a known margin requirement at the time of the hedge and cannot increase no matter how high they market can rally or go down.  

Subscribers of 6 months or longer have seen this 3rd time at the down or uptrend line works a high % of time, and the risks are minimal when it does not hold, and rewards you nicely when right. No matter what market you trade, learn this tool that I have relied on for decades, and my instilling courage to believe in this in you that took me so long to truly believe in. I take these trades every time when possible, and in the long run in my years it has truly been a casino bet for me and not a player, and are the ones most worth taking. See for yourself and if you see this pattern works, start to incorporate it in how you use it to trade with. 

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           May Your Next Trade Be The Best                          

                     Howard Tyllas            

   Tel.1-312-573-2699, 1-312-961-4390



Disclaimer:     No guarantee of any kind is implied or possible where projections of future conditions are attempted. Futures trading involve risk. In no event should the content of this be construed as an express or implied promise, 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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