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October 2011 Archive for Grain Hedge

RSS By: Brock Schimbeno, AgWeb.com

Grain Hedge is a self-directed discount brokerage that saves farmers money when trading in the futures and options market. For $7 commissions per side producers can execute their marketing strategy with authority, any time the markets trade.

MF Global Files for Bankruptcy, Now What?

Oct 31, 2011

 

The financial industry has seen a lot of changes in the last few years.  The most recent is MF Global, one of the world’s leading futures clearing members (FCM) filing for bankruptcy.  Producers with accounts at MF Global are now left with a decision, should I wait out the storm or take decisive action to manage risk?

 

Open positions at MF Global will either need to be liquidated or transferred to a new introducing broker (IB). This is not the forced liquidation that the market feared, but the ramifications will still be felt by many producers. As of this writing, producers that trade through MF Global IB’s are unable to add new positions. Considering the volatility we have seen in the grain markets, it is not advisable to stand flat footed and wait for the dust to settle. We recommend being proactive during this time of crisis and gaining some access to the market. We are NOT encouraging you to sever ties to the many MF Global brokers that have been caught in the fray, but having a plan in the interim is critical.

 

With harvest about 78% complete nationwide, most producers still have un-priced bushels. If you feel that existing positions are not sufficient to cover downside risk, give our brokers a call and we can help you navigate the waters until the dust settles.

GrainHedgelogo

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
PLEASE READ OUR RISK DISCLOSURE.

 

Will a Weaker Dollar Spark Grains Higher?

Oct 27, 2011

Debt resolution in the Euro-zone will have a profound global effect.  Most notably, the dollar index should weaken substantially.  A weaker dollar is beneficial for commodities that are U.S. dollar denominated, especially the grains and crude oil as they will become more competitive in the world marketplace.  We saw a large rally in the Dow with the index up 399.76 as of the close Thursday to finish at 12,208.55.  In conjunction with the dollar tanking, crude oil has spiked $6.14 a barrel for the week to settle today at $93.76.  Gold has once again rallied to relatively high levels at $1,735.50 an ounce, up $95.50 this week.  The grains have benefited mostly from a weaker dollar.

            Corn has continued to trade in a relatively tight range and is only up 1 ¼ cents on the December contract this week settling at $6.51 ½ today.  With little fresh fundamental news to give the market direction, corn has traded mostly sideways since October 11th.  The $6.50 area is providing heavy resistance and a nearly finished harvest is adding pressure.  Export sales fell off sharply and were reported as 677,100 MT, which is down 81% since last week.

            After a sharp sell-off last week, soybeans have been the leader to the upside gaining 22 ¾ cents on the November contract to settle at $12.35.  Producers and traders alike will begin to focus on South America as their planting is advancing quickly.  South America is anticipating a record crop this year adding to the competition for exports.  As with corn, exports were abysmal at 227,600 MT, which is down 62% from last week.

            Wheat narrowed its gap with corn this week adding 12 cents to the December CBOT contract to settle at $6.44 today.  Drought conditions continue to be a concern for producers in the Southern Plains keeping a solid base under prices.  There is little precipitation in the forecast to alleviate the severe drought ahead of winter.  Export competition remains stiff with little more than routine business being reported.  Exports were 316,800 MT, which is down 21 % since last week.

            Some measures were taken by the Euro-zone to alleviate the debt concerns and as a result the dollar index has plummeted to the benefit of the grains.  The equity markets also enjoyed some good gains this week.  Little has changed fundamentally for the grain complex with attention turning to South American planting and the dollar index.

 

To speak directly with a broker dial 1-877-472-4607

-or-

Visit us online at www.GrainHedge.com

 

GrainHedgelogo                                                                   Grainhedgebutton

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PLEASE READ OUR RISK DISCLOSURE.

Can Euro Zone Stability Propel the Grains Higher?

Oct 26, 2011

Corn, soybeans and wheat all traded lower today as uncertainty about the Euro Zone debt resolution weighed on prices. December corn, again, traded above 650 for a time in the overnight session only to fall 13 ½ cents to finish the day at 637 ¼.  A rather large 22 ½ cent range was traded.  With harvest wrapping up in some areas, producer selling has picked up and will weigh on prices in upcoming sessions.

            Soybeans finished at the lower end of a 23 ½ cent range, ending the session off 14 cents at 1219 ¾ on the January contract.  Pressuring the market lower is a nearly complete harvest and a quickly advancing South American planting.  A slightly stronger dollar contributed to the losses.

            Wheat was the leader to the downside in the grain pits losing 16 ¾ cents on the December CBOT contract to finish at 619 ½.  A wide 26 ¾ cent range was traded.  A stronger dollar and anticipation of weak export sales tomorrow sent the market lower.  Egypt continues to snub the U.S. for its import needs with their most recent purchase going to Argentina.

            The equity markets reacted positively to news out of Europe as it pertains to their debt crisis.  A sharp rally in the outside markets could raise demand prospects for the grains sending dollar index lower and prices higher.  Export sales are released tomorrow before the day session and it will be interesting to see if China is a featured buyer.

 

To find out more about our cash market intelligence, $7 commission per side futures and options trades and our live futures quotes.  Please take a free 14-day demo!

 

GrainHedgelogo                                                                   Grainhedgebutton

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
PLEASE READ OUR RISK DISCLOSURE.

Are We Close To A Break Out?

Oct 25, 2011

Today will be the first in a series we are calling Technical Tuesdays. Every Tuesday moving forward we will take time to breakdown price movements on corn, soybean, and wheat charts. Technical analysis is only part of the equation that producers should be looking at when marketing grain, but it can provide important insights into near term price movements and long term trends.

This week we highlight a bull flag that has developed on the DEC corn daily chart. Each candlestick below represents one day's price movements, and you can see that following the near limit up day on October 11th we have settled into a range between 630 and 655. This move on October 11th forms the flag pole, and the range we have traded since then is the flag.

Technicians look for a break out to the upside out of a bull flag, with upside potential being equal to the length of the flag pole. This is especially true when the flag pole was formed on a day with strong trade volume, as we saw on October 11th. A move like this would put us in the 688 range, and this would fill the small gap-down move on September 22nd. There seems to be fundamental information today out from China that supports this technical analysis, but we believe that a move higher will only be an uptick in a otherwise downward trend. To do some of your own chart analysis from home, take a demo of the Firetip platform today!

Corn1025

GrainHedgelogo                                                                   Grainhedgebutton

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
PLEASE READ OUR RISK DISCLOSURE.

650 - Tough Technical Barrier for DEC Corn

Oct 24, 2011

We reported on Friday's GrainTV that the 650 level for DEC corn was providing serious resistance and today we saw it once again. We carried the positive momentum from the overnight session into today's trade, but once again sold off hard into the close ending the day up just 1/2 cent at 649 3/4. Technically, this is very bearish but if a breakout does occur expect resistance around the 677 area which is a 50% retracement of September's sell-off. Below is the daily DEC corn chart, take a look at the "grave stone" formations from the last two days of trade. To get live-quotes and charting in your home today, take a Grain Hedge demo or give us a call: 877-472-4607

C1Z 1024

GrainHedgelogo                                                                   Grainhedgebutton

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

 

Weekly Wrapup--China and Greece Lead to Mixed Results

Oct 21, 2011

China’s economic slowdown and Greece’s continuing debt issues have left the global marketplace on edge this week.  Volatile and choppy trade has hit the Dow ultimately ending Friday at 11,808.79, which is up 164.30 on the week.  Oil fell $0.35 to settle at $87.62 today as a slowing economy is hurting demand prospects.  The dollar index gained slightly while gold tumbled $43 an ounce finishing at $1,640 Friday.  The grain complex is mixed for the week.

Corn has traded in a relatively tight range this week with little fundamental news to spark the market in any direction.  The December contract has added 9 ¼ cents to settle at $6.49 ¼ today.  The $6.50 area has provided resistance all week as the grain has failed to move solidly past this technical barrier.  Harvest progress has moved rapidly in the dry areas of the Midwest, but delays are being experienced in the soggy Eastern Corn Belt.  Export sales met the lower end of expectations at 1,762,600 MT, which is up 40% over last week.

Soybeans are weak both from a fundamental and technical standpoint.  The oilseed has not gained any day this week and is down 57 ¾ cents to $12.12 ¼ on the November contract.  China’s announcement of a slowing economy hurt this market the most as China is the world’s #1 importer of soybeans.  China did purchase a good deal of soybeans for the weekly export numbers, but we still fell short of industry expectations at 594,700 MT.  Harvest is nearly complete in some states as favorable weather has aided progress.

Wheat has followed corn’s lead this week trading a tight range and adding 8 cents to finish Friday at $6.32 on the December CBOT contract.  With ample world stockpiles and heavy competition abroad for export sales the market has little to get excited about.  Winter wheat planting progress has slowed as many areas are in dire need of a drink.  This weekend’s forecast has light rains to offer, certainly not drought busting.  Exports remain routine and at the lower end of expectations at 399,400 MT, which is down 17% from last week.

  Global economic uncertainty has again found its way into our markets.  Most of the markets were down on the week, but corn and wheat have held their own.  Soybeans took the news hardest.  In the weeks to come, traders will focus on final yield results and the ongoing South American crop planting.

 

GrainHedgelogoGrainhedgebutton

 

To speak directly with a broker dial 1-877-472-4607

-or-

Visit us online at www.GrainHedge.com

 

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS. PLEASE READ OUR RISK DISCLOSURE.

C1Z Finding Resistance At 650

Oct 20, 2011

December corn is pushing right up against the 38% retracement of the August 29th high to the October 3rd low. The DEC contract had a strong close today, but was still unable to settle above 650. Another positive day in the market could lead corn to break-out of the consolidation it has been printing for the last week and a half. If a break-out does occur, look for serious resistance around the 675 level. This area was not only an area of choppy trading during July but is at the 50% retracement of September's sell off. To track this contract on your home computer, take a demo of the Firetip platform today!
C1Z 650

GrainHedgelogo

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Stronger Dollar Could Weigh on Grains

Oct 18, 2011

GrainTV went live this morning for the market open, with grains continuing overnight selling into the day session. At the time of this post, we see December corn down 2, November beans down 12 and wheat hanging in there, down 1 to unchanged. This morning on GrainTV, analysts take a look at the dollar index chart and the implications dollar strength will have for the grains moving forward. Our analysts also look out to 2013 contracts and discuss pricing grain now or letting the market ride. Tune in to this morning's broadcast for a full breakdown of these and other issues.

GrainHedgelogo

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Soybean Resistance on the Horizon

Oct 14, 2011

After a solid technical and fundamental week for Soybeans, the oilseed will run into a bit of technical resistance next week at $12.82-13.00. That price level marks the bottom of the sideways channel Soybeans traded in for nearly five months and will prove to be an important battleground if the commodity wants to rebuild its technically weak chart.

Should Soybeans cross back over 13 with conviction, another daunting roadblock lay ahead at both $13.20 and $13.40. At these levels the 200, 100 and 50 day Moving Average will almost certainly offer up some strong selling pressure. 

(Click the chart to take a demo of the Firetip Trading platform!)

BeanChart10 14

WANT TO LEARN MORE ABOUT GETTING LIVE QUOTES, LOCAL CASH BIDS, AND $7 COMMISSIONS PER SIDE?  GIVE US A CALL AT 877-472-4607

 

The Bulls Are Showing Signs of Life

Oct 13, 2011

Equity and commodity markets moved higher this week, leaving recent lows behind. The Dow benefited from good news coming out of the eurozone and is up 374.64 to settle at 11,477.76 today. Oil saw improved demand prospects from the strengthening economy, adding $1.62 a barrel to close at $84.47. Gold moved up $31.40 an ounce to $1,661.50 while the dollar index moved sharply lower this week, reigniting their inverse relationship. The commodity markets were supported by the weakening dollar.


Corn saw a limit move higher on Tuesday. This move helped the grain add 38½ cents this week to close today at $6.38½ on the December contract. Sparking the market higher was the fact the Russia will be adding a levy to grain exports above 24 MMT. This fact, coupled with a weaker dollar, opened the door for gains. The USDA also published its most recent supply/demand and crop production reports, which were viewed as mostly neutral.


Soybeans have led the charge higher for commodities this week, adding 98¾ cents to the November contract. This market was severely oversold, after a $3 sell-off from highs of six weeks ago, which led to profit-taking and position-evening ahead of the USDA reports on Wednesday. These actions lifted the market 58 cents on Tuesday alone. Planting progress in South America is moving slowly, adding support to the rally. Export sales will be an important catalyst in the coming weeks as the dollar index continues to slide.


Wheat has been a drag on agricultural commodities of late, but did manage to add 10½ cents to the December CBOT contract by the close Thursday. Russia’s announcement, coupled with a weaker dollar index, has added support. USDA surprised this market Wednesday by raising carry-out numbers and world stocks to relatively high levels, sending the market 34 cents lower that day. Again, export sales will be an important driver in the weeks ahead.


The equity and commodity markets are out of the shadows and into the light this week as positive economic news and a weaker dollar have boosted prices. Going forward, export sales and South American planting progress will play a role for the grain markets as we near the end of the growing season domestically. USDA did not surprise the markets too much, but did spook the wheat market a little.

GrainHedgelogo

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Feed Usage Implications of Corn - Wheat Spread

Oct 12, 2011

Today's USDA WASDE report held no surprises for corn and beans, but wheat stocks came in well above expectations. There is a glut of wheat in the market right now, with global wheat stocks at 10 year highs. You can see from our corn - wheat spread chart below that after today's trade we see DEC corn at an 18 cent premium over the DEC Chicago wheat contract.

With this divergence between these two markets, livestock producers may find opportunities to substitute wheat in their feed diets. High stocks should keep wheat well supplied in the market place and this substituion will only further hurt a weak demand scenario for corn. To keep track of this and other spread opportunities in real-time from your home computer, take a demo of the Firetip platform! Grainhedgebutton

corn wheatspread

 

GrainHedgelogo

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

C1Z Limit Up, Will We See Expanded Limits For WASDE Report?

Oct 11, 2011

Wild day in Chicago as we approach tomorrow's WASDE report! We see DEC corn lock limit right now, NOV beans up 62 1/4. Take a look at this screen capture from Firetip taken about 12:05 CST. You can see from the area highlighted in red we have roughly 102,000 buy orders sitting at 645 and at present we see volume spilling over into the option pits. To get this easy to use trading platform in your home today take a demo of the firetip software: Grainhedgebutton

ATcorn

GrainHedgelogo

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

Bottoms Up?

Oct 07, 2011

The markets breathed a sigh of relief this week as measures are being taken by
the EU to quell the financial failure of Greece. The Dow responded by rebounding
189.74 points this week finishing trade at 11,103.12 today. Oil hitched its wagon to the
Dow adding $4.28 a barrel to settle at $82.85 Friday. Gold is once again heading higher
tacking on $8.10 an ounce ending today at $1,630.10. The dollar index fell slightly
giving support to grain prices.


Corn has found support the last couple of sessions near the low experienced on
July 1. For the week, corn has gained 7 1/2 cents to end trade today at $6.00 on the
December contract. Look for this market to remain range-bound between support at the
$5.88 area and overhead resistance in the $6.20 area. Exports sales adding support and
were reported as 1,289,500 MT.


Soybeans continue to fall from the highs of the year set on August 31st and are
down about 21% since that day. The market has lost 18 ½ cents this week to settle at
$11.58 ¼ on the most active November contract. Little support is found until the $11.28
level and without fresh bullish news the market looks poised to test that area. Exports
sales again disappointed and were reported as 701,800 MT.


Wheat continues to struggle to find a clear direction and has lost 1 ¾ cents on
the December CBOT contract to end trade Friday at $6.07 ½. Beneficial, widespread
rains are anticipated for the Southern Plains this weekend which is much needed to get a
decent start to the winter wheat planting that is already behind schedule. Exports sales
were routine at 431,200 MT, which is up 1 percent from last week.


The grain markets are a little jittery ahead of the October 12th USDA Supply/
Demand and Crop Production reports. Corn will remain range-bound, soybeans are
poised to move lower, and wheat is left searching for a direction. Macro economic
concerns have subsided for the time being, but any fresh news from the EU could send
the markets lower. Grain traders will be focusing on yield reports and estimates ahead of
next week’s reports.

Have a great weekend.

GHSidebyside                                                    877-GRAIN07

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT
APPROPRIATE FOR ALL INVESTORS. PLEASE READ OUR RISK DISCLOSURE.

Storing Soybeans Could Prove Profitable

Oct 06, 2011

Today we wanted to highlight some price action from the November soybean contract. At the time of this post it is trading at 1167 3/4 - down 20.3% since the recent high we printed on August 31st. You can see that this high came on the heels of a sharp move out of the 1300 - 1400 range we were stuck in for a six month period.

We included an RSI indicator on this chart and you can see that after taking 297 cents off this contract since August 31st it has reached oversold territory. With this being said, the soybean market is a very different beast than the corn market coming into harvest as soybean yields have been projected higher and export sales remain sluggish. We are looking for minor support around the 1128 level, but if we continue lower and trade through these levels - look out below.

Right now the cash market is paying producers to store their 2011 crop. For producers that have not yet priced their bushels, being long basis may pay off as we move away from harvest. Give us a call today to talk about marketing strategies as we move through harvest.

GrainHedgelogo                                                                Grainhedgebutton

Beans10 6

THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.

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