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The Ted Spread

RSS By: Ted Seifried, AgWeb.com

Ted is the Chief Market Strategist and Vice President in charge of the Zaner Ag Hedge Group and specializes in agricultural hedging employing various strategies using futures, futures spreads, outright options and option combinations. He believes it is paramount to be able to use different strategies to adapt to market conditions. Ted works with large to mid size grain and livestock producers and end users in North, Central and South America.

Planting Progress 5/29

May 29, 2012

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.   

 

Planting Progress 5/29

The USDA released the weekly Crop Progress report this afternoon which came a day late due to the Memorial Day holiday.  I hope everyone had a great holiday...  With hot and dry conditions at the end of last week, traders are looking closely at the effect that might of had on the condition of crops.  However it does look like we will see a cooler, wetter weather pattern for this week.

The USDA is reporting corn emerged at 92% as compared to 76% last week, 59% last year and 69% 5-year average.  Corn condition did take a hit from the hot and dry conditions late last week.  The USDA is reporting the corn crop at 72% good to excellent down 5% from last week at 77%.  However, the corn conditions are 9% better then last year which was at 63% good to excellent at this time.

See December Corn Daily chart:

Wheat numbers were mixed with the Winter Wheat crop condition declining 4% to 54% good to excellent compared to 58% last week and 35% last year.  Spring wheat is now 96% emerged compared to 86% last week, 36% last year, and 68% 5-year average.  Spring wheat conditions improved 5% to 79% good to excellent compared to 74% last year.

See December Wheat chart:

The USDA is reporting soybeans at 89% planted compared to 76% last week, 48% last year, and 61% five year average.  Soybeans are 61% emerged compared to 35% last week, 22% last year, and 30 % five year average.

See November Soybean Daily chart:

The reaction to this report could be slightly bullish for corn because of the 5% drop in the good to excellent category, however the crop still looks very good and it also looks like we have better weather coming.  Wheat could find a mixed reaction with winter wheat conditions falling and spring wheat conditions improving.  Here again though, both winter wheat and spring wheat conditions are good overall.  Soybeans had the least amount of skin in the game on this report as the USDA did not give us conditions numbers but the uber fast pace of soybean plantings and emergence should have a bearish tone.  It will be very interesting to see what the USDA says on the soybean crop conditions next week.

All this means that speculators should be looking for opportunities and producers need to look to lock up some prices while we have new crop corn in the $5.00 range and new crop wheat in the $6.90 range. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Please check out my Blog at: http://tedseifriedfutures.com/

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?rid=Seifried

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION

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