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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.

Soybeans Post a New High Close as Corn Is Unimpressive

Apr 12, 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.   

 

Soybeans post a new high close as corn is unimpressive

May Soybeans were able to put up the highest close we have seen since September of last year.  Support came from outside markets as we observed a "risk on" trade day stemming from overnight comments by the Federal Reserve Vice Chairman Janet Yellen making a case for the Fed to continue to keep interest rates low for an extended period of time and saying that the Fed may need to take even further action to stabilize the economy (i.e QE3).  Stocks, energies and commodities as a whole benifited from this as the US Dollar Index fell more then 50 points.

Export sales were better then expected for corn at 959 mt compared to trade estimates of 400-850 mt and 1122 mt last week.  Soybean sales were a little disappointing at 636 mt compared to trade estimates of 750-1150 mt and 1112 mt last week.  Wheat sales were as expected at 425 mt compared to trade estimates of 350-650 mt and 512 mt last week.

Again, soybeans had a positive day today even with weaker then expected exports but corn however had a difficult time staying above unchanged even with support from strong exports and supportive outside markets.  And while it looks like soybeans are set to retest recent highs, corn can not seem to catch a bid.  This has to be a little troubling for corn with what looks like favorable weather coming down the pipeline and a potentially record setting planting pace.  It seems that strength in soybeans alone may not be enough to get corn to rally.  It may take something like a late frost to burn out the early planted corn to get the market excited.

See Corn Daily chart:

See Soybean Daily chart:

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 $5.50 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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