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January 2013 Archive for 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.

Hedging March 2013 Corn and Trade Ideas for 1/30/13

Jan 30, 2013
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This report was sent to subscribers on 1/29/13 at 4:30 p.m. Chicago time to be used for trading on 1/30/13.

March 2013 Corn

After the close recap on 1/29/13: My resistance was 7.37 1/4, .05 1/4 from the actual high, and my pivot acted as support and was 7.28 1/4, .00 3/4 (EXACT in open outcry) from the actual low.

March 2013 Corn: Use the same numbers that were used on 1/29/13

7.37 ¼ FG XX
-----------7.28 ¼ Pivot
7.19
7.13
7.08 ¾ FG


5 day chart.... Up from last week same day
Daily chart ... Down
Weekly chart ... Sideways
Monthly chart .... Sideways 6.97 is the 200 DMA
ATR 11 Balanced 73%

I continue to say "The gap bracket line at $7.08 ¼ is now support, the gap at $7.37 ¼ is resistance and then the next downtrend line at $7.26 is pivotal now".

1/30/13:

Grains: All March corn options closed lower on Tuesday, and that does not bode well for the current rally to have too much left in the near term. March $7.40 calls closed at $.08 7/8 down $.00 ¾ and I believe is still a good place to sell upside away which is above my gap resistance of $7.37 ¼. If the market closes above $7.40 it would be no different unless it is above $7.48. If I sold the $7.40 call for $.08 clear (after commissions) and that is equal to $7.48. Anything below $7.48 does not compete with selling the $7.40 call for $.08 7/8. The March options expire 3 weeks from this Friday.

Soybean bulls dug in their heels and were able to settle above the 200 DMA, but until it closes above where the January contract expired, the bears remain in control. Above $14.62 ¾ will target $15. November soy-beans continue to resist at $13.20 and $13.40, and $12.90 is good support in the near term.

Average soybean and corn daily trading ranges are decreasing, another sign of a market going nowhere. Being 100% hedged 2013 corn and soybeans for months has allowed us to be unemotional and have less stress than being unhedged which is no different than a speculator who is long. If you are unhedged I would recommend hedging right here (November soybeans settled at $13.12 ¾, and December corn at $5.87) using options with a "known risk" and "known reward" as well as a "known maximum margin requirement". Unhedged farmers should keep in mind 2 things, unless some kind of hedge is in place, you are long the market the amount of contracts you need to defend if the market goes down, and you will be the victim or beneficiary of the weather as far as the price you will get in the future. Weather is by far the most important fundamental factor in determining if we will be making new "all time highs" or be saddled with burdensome supplies. Unfortunately, determining weather is just as much an art as it a science, and betting more than a small "what if" bet on weather is not the prudent thing to do, let alone betting all your "income" on an unhedged position.

Speculators only trade with funds that are a small part of their income; unhedged farmers are "betting it all" and to me are no different than going to the racetrack or casino with their paycheck. I cannot imagine any other business where the advisor does not tell a business that can lock in a price that allows good income in advance of production, and tells them not to and wait for a higher price. Once you have an income, you can spend some of it to try and improve profits and the risk should be more in production rather than price.

I am never in favor of selling futures/buying call options, let alone making cash sales with sources paying much less than the "board" price for new crop and buying futures or options to try and get some upside back, but it is very costly if the market rallies significantly and could be disaster and uncontrollable. A hedge strategy should never have the potential of having more risk than not hedging at all. If you sell futures or buy a put for hedge protection and buy a call or call spread for some upside, even if the market goes down you must subtract what you paid for the call side from the price you sold it at. But if it rallies past your upside, you will be forced into doing something for more upside and potentially after committing a lot of your money to the upside, only see the market setback by harvest. Then you would need to subtract all the money spent for the upside that was not realized at expiration.

Lastly, selling an outright call let alone 2 to pay for 1 put or put spread is an accident waiting to happen, and it could be fatal. This is a highly speculative position, even if it looks to you like it is not, and instead of making more money than your original hedge if it rallies, you could be in the "house of pain" instead. Hedge means to reduce risk, not assuming more risk if the unthinkable happens.

I want to continue to trade the market without bias, and risk .04 in corn and $.06 in soybeans using a stop to protect any idea.

1/29/13:

Grains: The funds do not seem to have any conviction to take the markets higher, and if they do the farmers are going to be more than willing sellers. Having my service and being 100% hedged for years that have allowed record profits for my producers, it's hard to witness all the farmers around them that still have 50% or more of their crop unhedged, let alone hardly hedging 2013 at all. Having $.60 December 2013 put spreads that start at $6.40 and $6.50 (2012 high for the December 2013 contract was $6.65) that costs $.12 or less including commissions is a "partial hedge" worth having. Of course we would like to see the market rally to the moon, we are well positioned to take all but $1 or less of whatever the market can rally no matter if it goes to $10 or more. The first $.48 income locked in our hedge account is more important to my producers than getting only $.80 instead of a $1 if it could rally to $7.20. Leaving $.20 on the table is a wishful price to pay if the market can rally for whatever the reasons. $.48 per bushel used to be a highly profitable return for farming until the last few years.

Reluctant buyers, unhedged farmers willing to sell, and the worst people to be long are the producers. Pro-ducers have enjoyed solid cash market the last few years, and this year is no exception. As I have said many times in my service, I believe "rationing" will be done in the cash markets, not the futures. This has been true, and this year I think we can see record cash prices in corn, but I do not know if soybeans can get more than $1 over the futures. This has been ideal for people using my strategies being hedged against "futures contracts" instead of any kind of cash hedge until actual cash sales are made and option hedges are lifted.

As a trader I laugh at the "dueling forecasts" over the decades, and the last few years have been hysterical listening to the experts predict yields on a year like 2012 when every single one of my producers underestimated what they thought was in their fields the day before they combined. If they could not tell what was in their own fields that most have worked for years to decades, how do you predict nearly 96 million corn acres? I have seen this movie many times since I bought a membership in 1976, and I never really cared what made the market go up and down. I have seen the yearly cycle from planting to harvest and in between for nearly 4 decades, and have looked at fundamentals as being helpful for the "what if", but knew from the start of my career that only by buying lower than I can sell it for, or sell it for more than I can buy it back for, was the ONLY thing that if I got that right I make money. I never want to be right the fundamentals and wrong what I buy or sell in the market.

I have said that this was going to be a boring period, and a good reason to sell "premium", and for producers than means to sell a call for what you are long in your bin right now waiting for higher prices to sell cash. It is still a waiting game in SA, and who expects anyone to get that right, when you could drive a truck through our "experts" guesstimates before that Final report this month.

The bottom line for speculators and producers, old crops should remain firm or even gain on the new crops as time goes on into the summer, and the trend is down until something changes. We should continue to trade sideways in the next 2 weeks in the parameters I outlined last week. For speculators that means to participate in the market with a preference to sell rallies at resistance levels rather than buying supports. I remain bearish since September, but am more than willing to cover "shorts" when at a chart support. I buy fewer contracts at chart supports to get long for a correction to a chart resistance, than taking a sell at that chart resistance. Producers must always protect the downside with some plan in place to limit risk, and im-prove on that position if the market rallies, and when at supports do something to improve your upside such as buying back calls that were sold and take profits looking to resell again if the market can rally.

Producers were silent on Monday and did not sell calls yet. I would sell something today even if it is half and take advantage of the bounce after the February call options expired worthless. Selling the $7.40 or $7.50 calls are worth selling, since the market has not traded over the gap at $7.37 ¼ for almost 2 months now. You are long March $7.20/$6.80 put spreads since the December options expired, and are long your bin until the call strike you sell. Some have $7.40 puts, and they will just put more income in their pocket if they lose it at $7.50.

Soybeans are trying to overcome the 200 DMA to no avail so far, let alone where the January contract went off the board. They still are hanging around there and have not given up, but the longer it takes the worse it is for the bulls who are trying to hurdle it. We are in position to make money if it can rally, and it should take November somewhat along for the ride, letting us find a place to extend our 2013 hedges that were almost running out of protection that began at $13.40.

I want to continue to trade the market without bias, and risk .04 in corn and $.06 in soybeans using a stop to protect any idea.

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USDA Report for 1/11/13

Jan 11, 2013

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USDA Report for 1/11/13.

Crop Area Planted and Harvested, Yield, and Production in Domestic Units -
United States: 2012 and 2013
[Data are the latest estimates available, either from the current report or
from previous reports. Current year estimates are for the full 2013 crop year.
Blank data cells indicate estimation period has not yet begun]
--------------------------------------------------------------------------------
: Area planted : Area harvested
Crop :-----------------------------------------------
: 2012 : 2013 : 2012 : 2013
--------------------------------------------------------------------------------
: 1,000 acres
:
Grains and hay :
Barley .........................: 3,637 3,244
Corn for grain 1/ ..............: 97,155 87,375
Corn for silage ................: (NA) 7,379
Hay, all .......................: (NA) 56,260
Alfalfa ......................: (NA) 17,292
All other ....................: (NA) 38,968
Oats ...........................: 2,760 1,045
Proso millet ...................: 335 205
Rice ...........................: 2,699 2,678
Rye ............................: 1,300 248
Sorghum for grain 1/ ...........: 6,244 4,955
Sorghum for silage .............: (NA) 363
Wheat, all .....................: 55,736 48,991
Winter .......................: 41,324 41,820 34,834
Durum ........................: 2,123 2,102
Other spring .................: 12,289 12,055
:
Oilseeds :
Canola .........................: 1,765.0 1,729.0
Cottonseed .....................: (X) (X)
Flaxseed .......................: 344 336
Mustard seed ...................: 51.1 49.7
Peanuts ........................: 1,638.0 1,608.0
Rapeseed .......................: 2.2 2.1
Safflower ......................: 169.8 160.1
Soybeans for beans .............: 77,198 76,104
Sunflower ......................: 1,919.0 1,841.0
:
Cotton, tobacco, and sugar crops:
Cotton, all ....................: 12,315.4 9,426.8
Upland .......................: 12,077.0 9,190.0
American Pima ................: 238.4 236.8
Sugarbeets .....................: 1,230.1 1,204.2
Sugarcane ......................: (NA) 899.0
Tobacco ........................: (NA) 336.2
:
Dry beans, peas, and lentils :
Austrian winter peas ...........: 19.0 13.7
Dry edible beans ...............: 1,742.5 1,690.4
Dry edible peas ................: 649.0 621.0
Lentils ........................: 463.0 450.0
Wrinkled seed peas .............: (NA) (NA)
:
Potatoes and miscellaneous :
Coffee (Hawaii) ................: (NA) 6.1
Hops ...........................: (NA) 31.9
Peppermint oil .................: (NA) 76.0
Potatoes, all ..................: 1,148.3 1,132.7
Spring .......................: 96.8 94.6
Summer .......................: 49.8 48.5
Fall .........................: 1,001.7 989.6
Spearmint oil ..................: (NA) 20.0
Sweet potatoes .................: 130.5 126.6
Taro (Hawaii) 2/ ...............: (NA) 0.4
-----------------------------------------------------------------------------

Crop Area Planted and Harvested, Yield, and Production in Domestic Units -
United States: 2012 and 2013 (continued)
[Data are the latest estimates available, either from the current report or from
previous reports. Current year estimates are for the full 2013 crop year. Blank data
cells indicate estimation period has not yet begun]
---------------------------------------------------------------------------------------
: Yield per acre : Production
Crop :----------------------------------------------
: 2012 : 2013 : 2012 : 2013
---------------------------------------------------------------------------------------
: ------ 1,000 -----
:
Grains and hay :
Barley ..........................bushels: 67.9 220,284
Corn for grain ..................bushels: 123.4 10,780,296
Corn for silage ....................tons: 15.4 113,450
Hay, all ...........................tons: 2.13 119,878
Alfalfa ..........................tons: 3.01 52,049
All other ........................tons: 1.74 67,829
Oats ............................bushels: 61.3 64,024
Proso millet ....................bushels: 15.1 3,090
Rice 3/ .............................cwt: 7,449 199,479
Rye .............................bushels: 28.0 6,944
Sorghum for grain ...............bushels: 49.8 246,932
Sorghum for silage .................tons: 11.4 4,135
Wheat, all ......................bushels: 46.3 2,269,117
Winter ........................bushels: 47.2 1,645,202
Durum .........................bushels: 39.0 81,956
Other spring ..................bushels: 45.0 541,959
:
Oilseeds :
Canola ...........................pounds: 1,416 2,447,410
Cottonseed .........................tons: (X) 5,759.0
Flaxseed ........................bushels: 17.1 5,762
Mustard seed .....................pounds: 602 29,930
Peanuts ..........................pounds: 4,192 6,741,400
Rapeseed .........................pounds: 2,205 4,630
Safflower ........................pounds: 1,121 179,424
Soybeans for beans ..............bushels: 39.6 3,014,998
Sunflower ........................pounds: 1,513 2,785,695
:
Cotton, tobacco, and sugar crops :
Cotton, all 3/ ....................bales: 866 17,009.9
Upland 3/ .......................bales: 849 16,250.0
American Pima 3/ ................bales: 1,540 759.9
Sugarbeets .........................tons: 29.3 35,236
Sugarcane ..........................tons: 36.3 32,637
Tobacco ..........................pounds: 2,268 762,441
:
Dry beans, peas, and lentils :
Austrian winter peas 3/ .............cwt: 1,219 167
Dry edible beans 3/ .................cwt: 1,889 31,925
Dry edible peas 3/ ..................cwt: 1,751 10,872
Lentils 3/ ..........................cwt: 1,178 5,302
Wrinkled seed peas ..................cwt: (NA) 406
:
Potatoes and miscellaneous :
Coffee (Hawaii) ..................pounds: 1,180 7,200
Hops .............................pounds: 1,918 61,249.2
Peppermint oil ...................pounds: 87 6,605
Potatoes, all .......................cwt: 412 467,126
Spring ............................cwt: 283 26,736
Summer ............................cwt: 368 17,855
Fall ..............................cwt: 427 422,535
Spearmint oil ....................pounds: 120 2,390
Sweet potatoes ......................cwt: 209 26,482
Taro (Hawaii) ....................pounds: (NA) 3,400
 

Crop Area Planted and Harvested, Yield, and Production in Metric Units -
United States: 2012 and 2013
[Data are the latest estimates available, either from the current report or
from previous reports. Current year estimates are for the full 2013 crop year.
Blank data cells indicate estimation period has not yet begun]
--------------------------------------------------------------------------------
: Area planted : Area harvested
Crop :-----------------------------------------------
: 2012 : 2013 : 2012 : 2013
--------------------------------------------------------------------------------
: hectares
:
Grains and hay :
Barley .........................: 1,471,860 1,312,810
Corn for grain 1/ ..............:39,317,660 35,359,790
Corn for silage ................: (NA) 2,986,210
Hay, all 2/ ....................: (NA) 22,767,860
Alfalfa ......................: (NA) 6,997,900
All other ....................: (NA) 15,769,960
Oats ...........................: 1,116,940 422,900
Proso millet ...................: 135,570 82,960
Rice ...........................: 1,092,260 1,083,760
Rye ............................: 526,100 100,360
Sorghum for grain 1/ ...........: 2,526,880 2,005,240
Sorghum for silage .............: (NA) 146,900
Wheat, all 2/ ..................:22,555,800 19,826,170
Winter .......................:16,723,410 16,924,140 14,096,970
Durum ........................: 859,160 850,660
Other spring .................: 4,973,240 4,878,540
:
Oilseeds :
Canola .........................: 714,280 699,710
Cottonseed .....................: (X) (X)
Flaxseed .......................: 139,210 135,980
Mustard seed ...................: 20,680 20,110
Peanuts ........................: 662,880 650,740
Rapeseed .......................: 890 850
Safflower ......................: 68,720 64,790
Soybeans for beans .............:31,241,260 30,798,530
Sunflower ......................: 776,600 745,030
:
Cotton, tobacco, and sugar crops:
Cotton, all 2/ .................: 4,983,920 3,814,930
Upland .......................: 4,887,440 3,719,100
American Pima ................: 96,480 95,830
Sugarbeets .....................: 497,810 487,330
Sugarcane ......................: (NA) 363,820
Tobacco ........................: (NA) 136,070
:
Dry beans, peas, and lentils :
Austrian winter peas ...........: 7,690 5,540
Dry edible beans ...............: 705,170 684,090
Dry edible peas ................: 262,640 251,310
Lentils ........................: 187,370 182,110
Wrinkled seed peas .............: (NA) (NA)
:
Potatoes and miscellaneous :
Coffee (Hawaii) ................: (NA) 2,470
Hops ...........................: (NA) 12,920
Peppermint oil .................: (NA) 30,760
Potatoes, all 2/ ...............: 464,710 458,390
Spring .......................: 39,170 38,280
Summer .......................: 20,150 19,630
Fall .........................: 405,380 400,480
Spearmint oil ..................: (NA) 8,090
Sweet potatoes .................: 52,810 51,230
Taro (Hawaii) 3/ ...............: (NA) 160
--------------------------------------------------------------------------------
See footnote(s) at end of table. --continued

Crop Area Planted and Harvested, Yield, and Production in Metric Units -
United States: 2012 and 2013 (continued)
[Data are the latest estimates available, either from the current report or
from previous reports. Current year estimates are for the full 2013 crop year.
Blank data cells indicate estimation period has not yet begun]
--------------------------------------------------------------------------------
: Yield per hectare : Production
Crop :-----------------------------------------------
: 2012 : 2013 : 2012 : 2013
--------------------------------------------------------------------------------
: metric tons
:
Grains and hay :
Barley .........................: 3.65 4,796,120
Corn for grain .................: 7.74 273,832,130
Corn for silage ................: 34.47 102,920,110
Hay, all 2/ ....................: 4.78 108,751,490
Alfalfa ......................: 6.75 47,218,060
All other ....................: 3.90 61,533,430
Oats ...........................: 2.20 929,310
Proso millet ...................: 0.84 70,080
Rice ...........................: 8.35 9,048,220
Rye ............................: 1.76 176,390
Sorghum for grain ..............: 3.13 6,272,360
Sorghum for silage .............: 25.54 3,751,210
Wheat, all 2/ ..................: 3.11 61,755,240
Winter .......................: 3.18 44,775,060
Durum ........................: 2.62 2,230,480
Other spring .................: 3.02 14,749,710
:
Oilseeds :
Canola .........................: 1.59 1,110,130
Cottonseed .....................: (X) 5,224,480
Flaxseed .......................: 1.08 146,360
Mustard seed ...................: 0.67 13,580
Peanuts ........................: 4.70 3,057,850
Rapeseed .......................: 2.47 2,100
Safflower ......................: 1.26 81,390
Soybeans for beans .............: 2.66 82,054,800
Sunflower ......................: 1.70 1,263,570
:
Cotton, tobacco, and sugar crops:
Cotton, all 2/ .................: 0.97 3,703,470
Upland .......................: 0.95 3,538,020
American Pima ................: 1.73 165,450
Sugarbeets .....................: 65.59 31,965,560
Sugarcane ......................: 81.38 29,607,790
Tobacco ........................: 2.54 345,840
:
Dry beans, peas, and lentils :
Austrian winter peas ...........: 1.37 7,570
Dry edible beans ...............: 2.12 1,448,090
Dry edible peas ................: 1.96 493,150
Lentils ........................: 1.32 240,490
Wrinkled seed peas .............: (NA) 18,420
:
Potatoes and miscellaneous :
Coffee (Hawaii) ................: 1.32 3,270
Hops ...........................: 2.15 27,780
Peppermint oil .................: 0.10 3,000
Potatoes, all 2/ ...............: 46.22 21,188,480
Spring .......................: 31.68 1,212,720
Summer .......................: 41.26 809,890
Fall .........................: 47.86 19,165,870
Spearmint oil ..................: 0.13 1,080
Sweet potatoes .................: 23.45 1,201,200
Taro (Hawaii) ..................: (NA) 1,540

December Weather Summary

Despite occasional December precipitation across the Nation's mid-section,
hard red winter wheat conditions remained mostly steady or declined due to
poor crop establishment and acute soil moisture shortages. In addition,
drought intensified across southern portions of the Plains, especially from
southern Texas into eastern Kansas. By December 30, the portion of the
Plains' wheat rated in very poor to poor condition included 61 percent in
Oklahoma, 49 percent in Nebraska, and 31 percent in Kansas. However, enough
snow fell across the northern and central Plains to provide some degree of
insulation from temperatures that locally and periodically fell to
-10 degrees Fahrenheit or lower.

In contrast, significant precipitation fell in much of the soft red winter
wheat belt, particularly across the Ohio Valley. As a result, most of the
wheat continued to thrive across the Mid-South and lower Midwest. By month's
end, 70 percent of the Illinois wheat crop was rated good to excellent. In
both the Ohio Valley and the upper Midwest, enough of December's
precipitation fell in the frozen form to establish a substantial snow cover.

Meanwhile, widespread precipitation also fell in much of the East, although
rain was spotty across Florida. Some of the heaviest precipitation, relative
to normal, fell across the Northeast and from the central Gulf Coast into the
southern Appalachians.

Elsewhere, much of the West experienced unsettled weather during December.
Precipitation was especially heavy from northern California into the
Intermountain West. For example, the average water content of the
high-elevation Sierra Nevada snow pack increased by 10 inches during the
month, reaching 14 inches (137 percent of normal) by the end of December.

The Nation's winter agricultural regions escaped significant freezes during
December, although there were several chilly mornings - particularly from
December 19-21 - in California and the Desert Southwest. Florida's coldest
morning, for the most part, occurred on December 23. Overall, December
temperatures were highly variable in the West but mostly above normal across
the eastern half of the Nation. Western temperatures were influenced by snow
cover, mainly in parts of the Intermountain region.

December Agricultural Summary

Temperatures from the Great Plains eastward were well above normal during
December, allowing producers with unharvested crops additional time to
complete fieldwork while aiding the establishment of winter wheat. Most
notably, temperatures for an area centered over the eastern Corn Belt and
Ohio Valley averaged more than 6 degrees above normal. In the West, monthly
temperatures were near-normal. Precipitation totals for the Nation varied
drastically during the December. Much of the southern Great Plains
accumulated rain and snow totaling less than 25 percent of normal, while
portions of Great Basin and Northeast received more than 200 percent of their
normal precipitation.

In the South, a variety of producer activities were ongoing throughout the
month. Barley and Durum wheat were sown in Arizona, as cotton producers
finished harvesting their crop. Growers in Texas readied fields for spring
planting following the completion of cotton harvesting and small grain
seeding. Elsewhere, general equipment and field maintenance was completed as
conditions allowed. Fruit and vegetable producers in the major producing
States harvested and shipped a variety of crops throughout the month, with
replanting ongoing as conditions allowed.

Unfavorably dry conditions led to further deterioration of winter wheat in
some areas. By December 30, the portion of the Plains' wheat rated in very
poor to poor condition included 61 percent in Oklahoma, 49 percent in
Nebraska, and 31 percent in Kansas. Conversely, increased moisture in areas
of the Corn Belt benefitted not only winter wheat, but helped to somewhat
replenish soil moisture levels as producers begin to plan for the 2013 crop
season.

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Howard Tyllas

Put yourself in a position to make money, use the daily numbers service!

Email: dailynumbers@futuresflight.com
http://www.futuresflight.com/

Tel.1-312-823-9189, 1-702-405-7245

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

Hedging 2013 Corn and Trade Ideas for 1/2/13

Jan 03, 2013

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Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 36 years.

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This report was sent to subscribers on 12/31/12 3:30 p.m. Chicago time to be used for trading on 1/2/12.

March 2013 Corn

After the close recap on 1/2/13: My resistance was 7.09 3/4, .02 1/2 from the actual high, and my support was 6.87 1/2, .00 1/4 from the actual low.

December 2013 Corn

After the close recap on 1/2/13: My resistance was 6.08 3/4, .03 3/4 from the actual high, and my support was 5.88 3/4, .00 1/2 from the actual low.

March 2013 Corn

7.23
7.09 ¾
-----------6.99 ½ Pivot
6.89 ¼
6.87 ½
6.82 ¼ FG 6.82 ½ is the 200 DMA

5 day chart.... Down from last week same day
Daily chart ... Down
Weekly chart ... Sideways
Monthly chart .... Sideways 6.82 ½ is the 200 DMA
ATR 11 ½ Oversold 32%


For 1/2/13: I continue to say "The gap bracket line at $7.08 ¼ is now resistance and then the daily numbers. Gap at $6.82 ¼ is support".

In my daily March 2013 corn numbers on Monday my resistance was .02 ¾ from the actual high; my support was .01 ¾ from the actual low.

December 2013 Corn

6.17 ¼ Use the same numbers as used on 12/31/12
6.08 ¾
-----------5.99 ½ Pivot near 200 DMA
5.90
5.86 ¾ FG


5 day chart.... Down from last week same day
Daily chart ... Down
Weekly chart ... Sideways
Monthly chart ...Sideways 5.97 ½ is the 200 DMA
ATR 8 ½ Oversold 17%


For 1/2/13: Daily numbers and then the downtrend line at $7.28 is major resistance; the daily numbers support.


The 200 DMA is pivotal not only for the day, but the direction for long term trades too.

In my daily December 2013 corn numbers on Monday my pivot acted as resistance and was .01 ¾ (only .01 ¼ in open outcry) from the actual high, my pivot also acted as support and was .03 ¾ from the actual low.

1/2/13:

Grains: March corn has held supports the last 3 days, not threatening the major support just $.07 below. I have been recommending playing the long side from here, and you know why by looking at the charts. I believe we will be much lower than here in time, but 'in time' is not the here and now, and why should you as a trader or hedger "tie your hands" to a long term position when you can do things to improve your position when at a key or major support or resistance level. Cliff and the funds know what to expect the first 3 days of the new year, and everyone will be looking to "place their bets" on the report that is due out next week. That is the game at hand. No senses to look beyond there, we already know the price parameters above and below the current levels.

I have been bearish for months and do look for much lower prices in time, but the question all producers must face is, "do I have enough protection going into the January Final report". We know that protection down $6.80 was enough protection so far, and $7 is exactly enough (if this was the March option expiration day), so if we can rally before the report I would use that as an opportunity to extend down to at least $6.80 or lower. There is no doubt that this report can cause a limit up or down move, and I have no idea what it will say, but I do know what I want to do, get more protection if it can rally, and get more upside if we are near supports.

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Instead of trying to get long if the market goes higher, my producers way of being long right here, is where their protection ends, all at $7 and at $6.80 and not buying more protection. Same goes for soybeans wherever your protection runs out. I recommend some more protection before the report. If you are bullish get some upside too, even if it means just to buy some calls back. Limit up or limit down, it is your risk, your reward, your decision. Make sure you adjust to a reasonable risk.

Buying more protection for March soybean hedges is the prudent thing to do when the January contract is below $14.21. There is not too much to think about, soybeans are vulnerable and unless hedged you are long. March $14.90/$14.40 put spreads should be kept because it is $.15 from full intrinsic value. Producers should buy more protection down to a major support level such as $13.70, $13.40, or $13.20 before the report.

I want to trade the numbers without bias today and risk $.04 in corn and $.06 in soybeans using a stop to protect any idea.

12/31/12: Grains: I have wanted to buy March corn for a few days since we are so close to major support at the gap of $6.82 ¼ which is now also the 200 DMA and why it makes it a very strong support. I would be surprised if it was filled before the report, and why I think we can correct a little more to the upside on Monday, and if the funds are in a buying mood to start the new year, more upside this week. But if they want to further liquidate, then the gap will be tested before the report. I do not make the market, I participate in it. The cliff is the primary driver the funds and all participants must respect because it will affect your market, and override each markets own fundamentals. This week is not your average week, there is very light volume and it does not take much to move the market, yet it is not moving as witnessed by my using the same numbers for the last 3 days in a row.

All I can go on is the chart, and the chart posted a higher low than the week before, and has good resistance at the bracket line at $7.08 ¼ which is great place to take profits if long, or a place to go short or buy more put protection. If the market can close below $6.80, I would look for much more downside to follow.

January soybeans are in a similar situation with last week's low holding above the previous weeks low. The downtrend line resistance at $14.70 and support at the recent low at $13.72 ¼, the pivot becomes $14.21 right where we are now. That is why I only look for $.50 up or down from here going into the report. Above $14.21 I prefer the long side, below it the downside. $14.90/$14.40 put spread is too much from its intrinsic value to exit now. I would take the opportunity to extend my put protection on a rally, and our way to be long is by not extending the puts here. It is never wrong to get more put protection when we are here in the middle of the parameters, but now it comes down to how bullish or bearish you are. Above $14.21 should encourage you to try and buy it cheaper, below there you should be more aggressive.

12/21/12:

Grains: Never too late to hedge 2013 if you are not already 100% hedged as I have recommened since July. I remind you every few months that markets can and will do anything. In 2008 the new "all time highs" in soybeans and corn were followed by quite a sell in a short period of time, and then the economic meltdown affected the grain market severely with soybeans going down to $7.90 and corn to $2.90 by harvest time (4 months from the high). The grain markets are very volatile the last few years and made for traders like me, who have risk parameters on every idea, and try to take what the market gives them when the odds are in their favor.

12/20/12:

Grains: Hedging 2013 crops is a must for any producer as I have insisted for months now. Having about $.50 of the first $.60 down is a comforting thought and financially sound approach, as you pursue higher prices. My strategy does just that. Listen, I was a floor trader, and my income was if I made more money than I lost. Fundamentals do not put money in my account, buying for less than I sell it for, or selling for more than I buy it back for, is the only thing that made me money. Fundamentals can be helpful, but the more unknowns there are, the less they become relevant. Farmers or speculators make money from farming or other professions, but I made money from trading. Before they had my service they looked at it like the majority of farmers or speculators do, they have an opinion what the market will do in the future and are willing to gamble on it. Many had no relevance for price discovery not even looking at a chart, but are willing to hold a position based on "what if" fundamentals, and have no control in controlling risk, or possible losses versus expected gains. Since I have seen 99 out of 100 new members fail in trying to stay on the trading floor for even a year let alone longer, what makes a farmer, speculator, and a big percent of the funds think they can do better? Trading is like being a "starter" in the NBA, NFL, or MLB, and if you want to stick around and do this professionally, then you must continue to improve until you are "competitive" (making money consistently such as monthly or quarterly) to be able to play the game at this level. When you can do that, unlike sports you can do this forever.

Some people fly first class to the super bowl and sit on the 50 yard line, and stay in a fine hotel and "party on the town", and come home $25,000 poorer. Some like to go to Vegas and their wife let's them lose $25,000 playing casino games, and some like to gamble playing the game of "stocks, bonds, or commodities", some real estate, or the many gambles that people call business, so losing money trading commodities is no different than playing casino games. How you enjoy to gamble is up to you, and I am not here saying it is wrong to lose money if you have it to lose, and is insignificant so that it does not affect your lifestyle. I only knew 2 people in my life that actually could beat the horses by handicapping only. I owned race horses and raced in Chicago year round continuously for 10 straight years, so I have seen my share of Damon Runyon characters, and only 2 were consistent monthly, quarterly, in the majority of years. If I can help you think (mindset and approach) and trade better, and improve whatever you were doing before, then I am happy to have done so. I know that if you are losing less this year than last year, it is good to see the improvement.

Over the years I have seen my producers really take advantage of my wisdom and knowledge, and have wasted no time this year putting it to use (old crop and new crop too). Some other services I hear right now are just starting to hedge 2013 a little, and they seem content to gamble with producers money, maybe because they do not know enough about options to use them correctly (not many do) or like farmers, they make money not from the ability to actually predict future outcomes, or be able to trade and control risk resulting from being wrong their ideas. Producers are common to think that "risk" is a part of farming, but unlike crop production or costs, current prices and my strategy that allows some protection to the downside, and the right to make more money if the market can go up is a game changer for ALL my producers. Much less stress, and the ability to be self directed, is priceless! They now can use a chart to see price levels they can use, that in the past are factually support or resistance, instead of being random about price.

Want to know what I think for tomorrow and going forward?

The markets now covered daily are Soybeans, Corn, and S&P's.

My numbers usually are sent at least 12 hours (via your email) in advance of the next day open outcry session. Subscribers use them as best suited to their own needs and sometimes that involves the overnight trade.

HowardTyllas Daily Numbers & Trade Ideas is designed to help you plan your hedging and trading strategies for the coming day.

$199.00 USD for each month, renewable monthly

HowardTyllasDaily Numbers & Trade Ideas $ 199.00

If clicking on the above link does not work please copy and paste the following in your browser:

https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=D5MG7VPCUWW2N

 

Howard Tyllas

Put yourself in a position to make money, use the daily numbers service!

Email: dailynumbers@futuresflight.com
http://www.futuresflight.com/

Tel.1-312-823-9189,1-702-405-7245

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