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.   

Welcome to the 100th installment of The Ted Spread!  Thank you so much for taking the time out of your very busy schedule.  I am also very great full for all the comments, calls, questions, encouragements and criticisms.  It makes the whole thing worthwhile (I suppose calling me an idiot is better then not calling at all, Ha!)...

Corn was under pressure today as weather is finally conducive for widespread plating.  The consensus is that there will be an unprecedented jump in planting progress on Monday afternoon's crop progress report.  I tend to agree as everyone I have called on in the last few days has been in the field getting work done.  The progress that has been made this week is amazing and once again proves that the American Farmer is the best in the world.  

From where I sit, the progress this week has been staggering.  I have clients all over the grain belt which is always very helpful to my analysis and to my clients, but this has been one of those special weeks where it has been really exciting to talk to everybody and get an update and in turn give updates from all over.  It is a wonderful thing to get a broader perspective rather then only really knowing what's going on in my neck of the woods.  It is just as wonderful to be able to pass that along as well.  Without naming names or going into too much detail here are some of the stories -  

Sign up for our Morning Ag Comments: http://www.zaner.com/offers/?page=17

A client about 25 miles east of Springfield, IL  has gotten almost 80% done of his 2,400.  

Further east in LaFontaine, IN I have a client that finished his 4,100 acres yesterday, but he says most guys around him are 30% at best and going hard to get as much in before the advertised rain late weekend into early next week.  

Another client near Danville, IL that is at 0% on 800 acres as of Wednesday, but going in the morning...    Near Linton, ND 9,000 acres planted in less then 10 days.  

Rained out in Fargo with 2,000 acres of corn to go, expecting almost 4 inches this weekend so may be switching.  

Logansport, IN 35-40% as of today, looking to be done with corn before the rains late weekend.  

We'll be done tonight in Delween! (IA)  

From what I can tell it is wet and messy, but there are or have been opportunities for guys on the ball.  I hate to be cliche, but you snooze you loose.  Anyone who hesitated to get in the field is struggling to catch up.  

With all of the progress being made December corn has gotten close to mid April lows and key support.  There certainly are still some wet spots, so if there is more rain in the forecast Monday, or the progress report is dissapointing corn could pick up off of support again.  However, if there is a lack of bullishness early next week December corn could be set to take another leg lower.  

If you are looking for ideas or want to talk strategy feel free to give me a call or shoot me an email, you will find my contact info below.

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

December Corn Daily chart:

November Soybeans Daily chart:

December Wheat 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 corn near $7.00 and soybeans near $14.00. 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?ap=tseifrie

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.

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.   

In the last few weeks corn and soybeans have been supported by strong May contracts.  May corn and May soybeans have been in the delivery period and there had been no deliveries.  In the mean time, commercials looking to source grain have put pressure on those who have held short contracts pushing May corn 70 cents higher and May soybeans $1.20 higher.  This short squeeze has been a major supporting factor for corn and Soybeans.  But now that May contracts are off the board and the July contract are over a month away from their delivery period what should we expect now?  

The May-July corn spread ended at 54 cent premium to May and the May-July soybeans spread ended at $1.10 premium to May.  This is a big discrepancy and suggests a strong cash market and a strong basis.  This has been supportive to the grain complex as a whole.  However, with the July contracts being a ways away from delivery period this positive effect on markets could be diminished.

Sign up for our Morning Ag Comments: http://www.zaner.com/offers/?page=17

Another question is if the cash market will stay as strong as it has been.  It would seem to me that producers are waiting to sell much old crop corn until they know they have a new crop planted.  As of Monday we were only 28% planted according to the USDA.  Soybeans have been very strong, but incoming shipments from South America could start to fill demand needs and bring lower cash prices.  It could be the case that cash prices are peaking for awhile.  

So, with the short squeeze in the May contracts out of the way some of the support to futures prices could fall away as well.  Cash prices could also be hitting a peak soon with better opportunities to plant and the potential for South American Imports.   

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

If you are looking for ideas or want to talk strategy feel free to give me a call or shoot me an email, you will find my contact info below.

December Corn Daily chart:

November Soybeans Daily chart:

December Wheat 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 corn near $7.00 and soybeans near $14.00. 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?ap=tseifrie

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.

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.   

Tomorrow the USDA will release updated balance sheets for 2012/2013 and give us numbers for 2013/2014 for the first time on a WASDE report.  By no means is this a small report.  There are lots of numbers, and this report could set the tone going into the growing season.  So obviously we will be looking at that very closely tomorrow.  However, on the eve of the report, rather then going in and taking guesses on what the report is going to say like so many other analysts I thought I'd touch on something that not many people are talking about right now - US imports of South American Grain.  

Early this morning we were hearing rumors of 3 cargos of South American soybeans headed to a US destination.  The market either did not notice or didn't care as soybeans lead te way higher.  If these rumors end up to be true this could put a significant amount of pressure on soybean prices.  Our tight old crop balance sheet could be offset by imports and the need for price rationing could fall to the wayside.  Cash basis could stay supported in the interior far a while, but futures prices and gulf basis would suffer.

Then mid day I got an email from one of our clients in Uruguay who has been a trusted and very reliable source...  

- Its confirmed that the first ship is loading beans from Paraguay and Uruguay with a USA port destination.  

If this is true, which again sounds likely, this could be trouble for soybeans prices going forward.  If south America selling soybeans to the US then the market at some point soon push the agenda to see how low soybean prices need to get to stop US imports and then rebound slightly above that price.  In other words, the market will push to find the lowest price possible from South America, get just above it while we need imports and then break below it once the pipeline is fat with soybeans, South American or otherwise.  The other factor here it the US$.

Sign up for our Morning Ag Comments: http://www.zaner.com/offers/?page=17

The stronger the US$ the more purchasing power we have in Brazil, Argentina and Uruguay.  If these sales were booked before today which the surely were, then the case for importing South American soybeans got much stronger today as July soybeans were up 18 cents and the US$ Index was up 86 points.  This is a double whammy that could bring on a flurry of activity.  

So now I'm wondering - if tomorrows USDA report does happen to be bullish old crop soybeans if any positive reaction would be short lived.  I think I might have my finger on the sell trigger as I am sure South America does. 

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

If you are looking for ideas or want to talk strategy feel free to give me a call or shoot me an email, you will find my contact info below.

December Corn Daily chart:

November Soybeans Daily chart:

December Wheat 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 corn near $7.00 and soybeans near $14.00. 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?ap=tseifrie

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.

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.   

This is a big report because not only are we going to be looking closely at the USDA's numbers for 2012/2013 but we will be very interested to see what they say about 2013/2014 for the first time.  In the grain complex the biggest surprise is usually the market driver on these reports.  Meaning, if we are way off on one of the numbers that commodity will likely be the leader for the day.  If there is no big surprise or all the numbers are big surprises then corn seems to be in the drivers seat of the grain complex.  However, at this time of year it is not uncommon to have grains move different directions as the acreage story unfolds.  

The biggest numbers in this report will be ending stocks numbers for 2012/2013 and 2013/2014.  The average trade estimates are as follows:  

2012/2013  

Corn - 749 million bushels

Wheat - 733 million bushels

Soybeans - 123 million bushels  

2013/2014  

Corn - 1.993 billion bushels

Wheat - 658 million bushels

Soybeans - 236 million bushels   

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

There are a lot of moving parts on this report so it is very difficult to tell if the trade will be paying more attention to 2012/2013 or 2013/2014.  It really is a situation of two sharply contrasting fundamental make ups.  2012/2013 was a major drought year resulting in low ending stocks and tight balance sheets (also record high prices in corn and beans last summer).  2013/2014 is expected to be a huge crop as long as we get it planted and have a good growing season.  Here again the biggest surprise may take the lead.  

At first glance I wonder if the USDA is really going to show us almost a 2 billion bushel carry over in new crop corn.  They most likely can not change acreage numbers this early in the game, but them might choose to bump up the demand numbers to even things out.  The same concept might be in play for the soybeans.  If the USDA can not increase soybean acreage at this time they might want to tone down demand numbers to even things out.

Sign up for our Morning Ag Comments: http://www.zaner.com/offers/?page=17

I will get into more detail on Thursday.  If you are looking for ideas or want to talk strategy feel free to give me a call or shoot me an email, you will find my contact info below.

December Corn Daily chart:

November Soybeans Daily chart:

December Wheat 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 corn near $7.00 and soybeans near $14.00. 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?ap=tseifrie

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

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.   

As we wait to get into fields for some weather to pass, corn and wheat have been able to stay positive.  This should be the case as planting progress is at record lows and tensions are getting high about if we get a corn crop in or not.  Whether it is too late to plant corn or not will really depend on where you are, but for most areas there will still be time as long as the forecast for the next two weeks keeps planting opportunities in it.  But where do the soybeans stand in the mix?

It seems fairly cut and dry in the corn market right now as far as were prices might be going.  It is a weather market, and if weather gets better corn should go down, if weather gets worse or continues to keep planters out of fields then corn should go up.  But, figuring out what this all means for soybeans is a trickier proposition.  On one hand late corn plantings may mean more soybean acres, on the other hand if weather really stays bad maybe that acreage is just lost or worse we cant get the intended soybean acreage planted.  At the same time you have a massive crop in South America, but they have been very slow to step up to the global market.

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

If we walk in next week and the weather forecast is for cold temps and rain or snow will the soybeans follow corn on a limit up move, or come under pressure on ideas that at this point it is time to give up on corn and plant soybeans?  Really I think it depends on how many corn acres are lost.  If corn were to loose 1.5-2.5 million acres there would still be enough corn planted to end up with well over a billion bushel carry over even if we fall short of trend line yields given the projected demand structure.  In this case the added acreage to soybeans along with huge South American supplies would likely mean a lot of downward pressure on soybean prices.  Now, if corn were to loose upwards of 3 million acres the picture starts to change.  In this case there very well could a strong rally in corn which would likely bring soybeans along for the ride despite some bearish fundamentals.  So, it really comes down to how many corn acres really are lost because loosing 1 or 2 million acres in corn is not as big of an impact on the balance sheets as gaining a million acres in soybeans.

In the near term it is very difficult to predict soybean price action or even soybean price reactions to changes in the weather driven corn market.  In the end I believe it all comes down to how many acres are lost in corn.  If there enough corn acres lost then soybeans could be a follower on a rally.  If the corn acreage lost is significant (which it likely is) but not enough to draw ending stocks below 1.2 billion bushels then soybeans will likely be the leader lower on bigger acreage and stiff global export competition.

Sign up for our Morning Ag Comments: http://www.zaner.com/offers/?page=17

If you are looking for ideas or want to talk strategy feel free to give me a call or shoot me an email, you will find my contact info below.

December Corn Daily chart:

November Soybeans Daily chart:

December Wheat 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 corn near $7.00 and soybeans near $14.00. 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?ap=tseifrie

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.