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September 2011 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.

November Soybean Daily Numbers & Trade Ideas for 9/29/11

Sep 30, 2011

This report was sent to subscribers on 9/28/11 4:30 p.m. Chicago time to be used for trading on 9/29/11.

November Soybeans

After the close recap on 9/29/11: My resistance was 12.37, .01 from the actual high, and my support was 12.06, .03 1/4 from the actual low.

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Corn and soybean numbers for 9/30/11 have already been sent to subscribers at 1:40 pm.

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November Soybeans


12.54 ½
12.37
--------------12.21 ¼ Pivot
12.06
11.81

5 day chart... Down from last week same day
Daily chart .... Down
Weekly chart ... Sideways
Monthly chart Up $13.43 ¼ is the 200 DMA
ATR
29 ¼ Ex. Oversold 1%

nov beans 9 29 11

Downtrend line is resistance, and daily numbers support.

New low for the run and closed higher bodes well for another up day to follow on Tuesday. Indeed it did!

In my daily soybean numbers on Wednesday; my pivot acted as resistance and was .03 ¾ (.03 on open outcry) from the actual high; my support was .07 from the actual low.
 

 

report 9 30 11


9/29/11:

Grains: Spot on grain numbers. I repeat the first thing I said yesterday "Corn's inability to recapture the uptrend line is bearish. Downtrend line is the pivot today and bears will look to retest the low made on Monday. Uptrend line at $6.16 is strong support. Unless the market closes above the uptrend near $6.66 ¼ the bears remain in control. I believe we will get a bearish corn stocks report on Friday, and then a bearish October Production report.

I would think the major uptrend line near $6.16 would hold today going into the report, and the bears will wait for Friday's report before breaking the uptrend line and retest the low made on July 1 at $5.75 ½ as their next objective. Producers who.....Subscribe now!

My producers have done extremely well hedging their corn, and all have stayed in front of their protection from running out. Most have protection down to $5.50 and $5, so they can comfortably see the "unimaginable" happen without blinking, and feel they are getting paid on their life insurance policy while they are still alive to enjoy it. They followed a strategy that is unshakable no matter what they think about the market, and it was their own thoughts that allowed being bullish and bearish and taking advantage of what the market has given them. Their bias made them money if right, and if wrong the strategy clearly shows the risk involved. Year in and year out I always emphasize that the first and foremost important thing to do is to buy protection and buy more when needed or when cheap. I have said that I am always worried what my risk is when wrong rather than what I make when right. Making money takes care of itself, but you must take care to not lose money or it will kill you.

Market settled at $7.25 ½ on 8/17 when I said for 8/18 "The $7.20/$6.70 December put spread settled at $.19 ¾, the $6.50/$5.50 is $.15 ¼, and the $6.00 put outright is now only $.07 ½. Time is winding down and these options will move significantly on any move, and if we move down $1 let's say next week, it would be worth about $.37. Even a $.50 move will move the options greatly no matter call or put spreads". It settled at $.24 on Wednesday. The $6.50/$5.50 put spread settled at $.39 7/8. These spreads (and cheap outrights) were the right thing to do not because we came down, but it was protection that allowed to seek higher prices and limit your risk if wrong. Buy protection or upside when cheap and can improve your original hedge, and the more your bias is right the more you will make, but if wrong your risk is minimal and is "known". My producers are not "trading" the market like what is normally done on their own before being with me or following most services, but rather are "observers" of the market and looking for opportunities to improve their original hedge, or to make sure they have enough protection. This strategy slows everything down, and takes most or all emotions out of the decision making process. They have enough gambles in their profession as it is, to finally have a strategy that allows them to take advantage of any rally and not feel they are missing out on something, and not have the emotions that are extreme at times by not being hedged.

I have been saying that exports have been dismal, ethanol grind has been slowing (posting another poor grind on Wednesday), cheap wheat for feed and the PRC is nowhere to be found even making inquiries for buying corn. Unless a really bearish report, the chart looks to have strong support at $5.40. I cannot imagine for us to get down there before the harvest is near complete. I do not have a valid reason other than if the PRC starts buying, to justify corn being at these levels during harvest.

I am looking for a bullish soybean report and bearish corn report compared to what the trade is looking for. Depending on how right I am, I would expect soybeans strength to be more supportive for corn, than corn to be a drag on soybeans. You should adjust your position and take as much risk off the table going into the report if a producer. I would not have a position going into this report as a trader, and if I did it would be a known risk strategy with my bullish soybean bias. Fundamentally I can see corn going down further, but I never sell above the uptrend line so my way of being long the corn market is to not be short and have no position. If the report was friendly I would have no problem playing from the long side as long as we stay above the uptrend line support. I want to trade the numbers without bias today and risk $.06 in corn and $.07 in soybeans on any idea using a stop to protect. One last thing, after the report, the option winner will not win and the loser will get killed, meaning if the market is higher the calls will not go up much, but the puts will go down greatly in value. I never am long an outright option going into a report unless there is no time left on them and are "cheap", and I expect the market to move significantly in a short period of time.

9/28/11:

Grains: Spot on grain numbers. Corn's inability to recapture the uptrend line is bearish. Downtrend line is the pivot today and bears will look to retest the low made on Monday. Uptrend line at $6.16 is strong support. Unless the market closes above the uptrend near $6.66 ¼ the bears remain in control. I believe we will get a bearish corn stocks report on Friday, and then a bearish October Production report.

On the other hand my guess is the soybean report will be bullish. Normally we see September stocks come in better than expected, but this year I think it will stay unchanged or lowered a little. Last month the USDA predicted a carryout of 209 MB, and the average trade guess now is 225 MB. 2011/2012 carryout is projected at a tight 165 MB, if carryout is lowered for 2010/2011 it will make 2011/2012 tight enough to make a case to rally at least until SA crop becomes made. Dry weather in September should have reduced soybean yields, but I will say that I am glad to hear from my producers who have started to harvest; it seems they are getting 10% better than average yields. This is not a reflection of the US crop, only the producers I have and what is inside their property. 10 miles away it could be a completely different story. They do not want to be on the wrong side of the "rain line". Frost does not appear to be a factor at this time, and weather forecasts are tilting to a later than normal frost.

Damage has been done to the soybean chart, and the market tried to recover bouncing over $.50 from the low on Monday, but closed poorly just managing to close a few cents up on the day. Unless soybeans can close above the downtrend line near $12.86, the bears are in control and will want to retest the low of Monday at $12.26. Friday's low is showing support tonight at $12.50, below there is bearish today.

Outside markets are always in play, but all the uncertainties in the grain markets now equate to the market continuing to do anything. I want to trade the numbers without bias today and risk $.06 in corn and $.07 in soybeans using a stop to protect any idea.
 

9/27/11:

Grains: Spot on soybean support, but the rest of the grain numbers were only accurate. First thing that stands out was the fact that corn and soybeans made a new for the run and closed higher which bodes well for another up day to follow on Tuesday, and tonight's session shows they have at least started out that way. I liked the fact that corn closed above its 200 day moving average. I said on 7/7/11 about the July "old crop" contract, and should be noted that the December contract was at $6.15 at the time July was at $6.48 ¾: Grains: "Spot on grain numbers! July corn reversed what it did the previous day. Expect anything to happen through the last trading day next Friday. July corn settled $6.48 ¾ within $.10 of where we were in 2008 at this time. On Thursday we traded down to $6.15 on the bearish stocks report, and that compares to the June/July low in 2008 at $5.98. 2008 is all I have to go on for comparison while at historic highs". You know well by now that the 3rd time at an uptrend line makes it "key" because the 3rd time is the strongest time at a line, and it comes in at $6.15 today. You know I want to play it from the "buy side" when near the line, and no matter what would take profits on a "short position" and not try and cheer lead the market to "break" the uptrend line, you have seen it hold more times than not on the first attempt to break it, and when it holds it provides a nice return.

With all that being said that does not mean we have the right to rally any significant amount, but several of my producers who... Subscribe Now!... are now positioned to make some more profits if it does, and the maximum risk is $.06 ½ if not. They understand having been with me from 1 to 3 years that they will never know what the market will do, but they do know what they want to do, and that is not risk too much to improve their position, and to take what the market has to offer (an opportunity). Over the weekend I said buy back call spreads, or sell some put spreads instead. I also mean what I say about "some" not all or nothing. I talked everyone out of buying put protection who are running out of protection and they all held off, but the few who have a few contracts that already ran out of protection (in soybeans) I told to just buy a minimum spread such as the $12.60/$12.

If you were watching the stock market from Sunday night's open through Monday's day session, commodities were coat tailing (following) almost in lockstep for the most part. I believe the stock market probably caused the grains to sell off more than was needed as far as corrective action at this time. The corn crop progress came in with a 1% improvement after seeing a 2% decline the week before. I think the idea that the corn crop is getting smaller is not going to attract buyers as it did before, and that is why I do not think the rally can advance beyond $7. Harvest is now running at the 5 year average.

Soybeans are 5% harvested now compared to the 5 year average of 11%. Ratings were left unchanged at 53% after seeing the week before ratings dropped 3%. What is wrong with soybeans? Overnight lows posted a new low for the year, but did recover nicely. Unlike my thoughts of a bearish corn stocks report this Friday, I think there is a good chance for a bullish stocks report for soybeans. I was not expecting a $2.40 break in soybeans at this time, and due for some kind of bounce going into the report if outside markets remain stable. Estimates are out tomorrow and we will see what the "guesses" are, but as always fundamentals gives me a bias at best, but I take my trade ideas based on the chart alone. "They" seem to buy or sell mostly on their fundamental research and ideas, and everyone knows how that is working out even though the "guesstimates" on production has not changed.

Since we have had such a deep correction and closed higher, my bias is to take the buy signals, and only take the sell signals at resistance numbers. I want to risk $.06 in corn and $.08 in soybeans using a stop to protect any idea. I have warned of volatile and choppy markets, and more is likely to come after the report. Take advantage of any rally to buy more protection if you feel the need to do so.

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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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WASDE Report 9/30/11

Sep 30, 2011

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Corn Stocks Down 34 Percent from September 2010
Soybean Stocks Up 42 Percent
All Wheat Stocks Down 12 Percent

Old crop corn stocks in all positions on September 1, 2011 totaled 1.13 billion bushels, down 34 percent from September 1, 2010. Of the total stocks, 315 million bushels are stored on farms, down 35 percent from a year earlier. Off-farm stocks, at 813 million bushels, are down 33 percent from a year ago. The June - August 2011 indicated disappearance is 2.54 billion bushels, compared with 2.60 billion bushels during the same period last year.

Old crop soybeans stored in all positions on September 1, 2011 totaled 215 million bushels, up 42 percent from September 1, 2010. Soybean stocks stored on farms totaled 48.5 million bushels, up 37 percent from a year ago. Off-farm stocks, at 166 million bushels, are up 44 percent from last September. Indicated disappearance for June - August 2011 totaled 405 million bushels, down 4 percent from the same period a year earlier.

Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports and crushings, and farm program administrative data, the 2010 soybean production is revised down fractionally from the previous estimate. Harvested area is revised down 6,000 acres. A table with 2010 acreage, yield, and production estimates by State is included on page 17 of this report.

All wheat stored in all positions on September 1, 2011 totaled 2.15 billion bushels, down 12 percent from a year ago. On-farm stocks are estimated at 642 million bushels, down 21 percent from last September. Off-farm stocks, at 1.51 billion bushels, are down 8 percent from a year ago. The June - August 2011 indicated disappearance is 720 million bushels, down 2 percent from the same period a year earlier.

Durum wheat stocks in all positions on September 1, 2011 totaled 65.2 million bushels, down 35 percent from a year ago. On-farm stocks, at 36.4 million bushels, are down 49 percent from September 1, 2010. Off-farm stocks totaled 28.8 million bushels, down slightly from a year ago. The June - August 2011 indicated disappearance of 22.1 million bushels is down 45 percent from the same period a year earlier.

Picture report 9-30-11

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

The 7 markets now covered daily are Soybeans,Corn, Crude oil, S&P, 30 yr TBond, Gold, and Nat gas

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.

Find out why my subscribers from Canada, China, Czech Republic, Germany, India, Switzerland, South Korea ,Turkey and the UK keep renewing this service.

HowardTyllas Daily Numbers & Trade Ideas cover 7 markets for less than $10 a day,

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

$199.00 USD for each month, renewable monthly

HowardTyllasDaily Numbers & Trade Ideas $ 199.00

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The weekly service is "Monday only" and comes out usually by Saturday morning so you can prepare for Sunday night and Monday's trade.
 

WeeklyService: 13 weeks for $129 total subscription fee.

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May Your Next Trade Be The Best


Howard Tyllas

Tel.1-312-573-2699, 1-312-823-9189

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.

 

 

WASDE Report for 9/12/11

Sep 12, 2011

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OILSEEDS: U.S. oilseed production for 2011/12 is projected at 92.4 million tons, up 0.7 million from last month. Soybean production is projected higher, partly offset by declines for peanuts and cottonseed. Soybean production for 2011/12 is projected at 3.085 billion bushels, up 29 million due to higher yields. Soybean ending stocks are projected at 165 million bushels, up 10 million as higher supplies are only partly offset by increased exports. Other changes for 2011/12 include reduced food use of soybean oil, reflecting increased use of canola and palm oil, increased use of soybean oil for biodiesel, and reduced food use for 2010/11.

Soybean crush for 2010/11 is increased 5 million bushels to 1.65 billion, reflecting higher-than-expected crush reported for July. With soybean exports unchanged, ending stocks are projected at 225 million bushels, down 5 million from last month. Other changes for 2010/11 include increased use of soybean oil for biodiesel and reduced food use. Soybean oil used for production of methyl ester was reported record-high for July by the U.S. Census Bureau. Soybean oil stocks are projected at 2.84 billion pounds, up slightly from last month.

Soybean and product prices are all projected higher for 2011/12. The U.S. season-average soybean price is projected at $12.65 to $14.65 per bushel, up 15 cents on both ends of the range as higher corn prices provide support. Soybean meal prices are projected at $360 to $390 per short ton, up $5.00 on both ends of the range. Soybean oil prices are projected at 55.5 to 59.0 cents per pound, up 0.5 cents on both ends of the range.

Global oilseed production for 2011/12 is projected at 453.0 million tons, up 1.5 million from last month. Production increases for soybeans, rapeseed, sunflowerseed and cottonseed are only partly offset by lower peanut production. Soybean production is projected higher for the U.S. and India. India's soybean production is raised 0.7 million tons to a record 10.5 million due to higher planted area. Canola production for Canada is increased 0.6 million tons to a record 13.2 million based on higher area and yield reported in the most recent report from Statistics Canada. Harvested area is projected record-high despite excessive rainfall and flooding in parts of Saskatchewan and Manitoba that prevented some areas from being planted. Canada's canola production is also raised for both the 2009 and 2010 crops based on the same report. Other changes include higher sunflowerseed production for EU-27, higher cottonseed production for China, lower cottonseed production for Pakistan, and lower peanut production for India.


WHEAT: Projected U.S. wheat ending stocks for 2011/12 are raised 90 million bushels this month with higher expected imports and lower expected food use and exports. Imports are raised 10 million bushels with larger supplies in Canada. Food use is projected 5 million bushels lower, in line with revisions to 2010/11 based on the latest and final U.S. Bureau of Census mill grind estimates and reflecting reduced prospects for per capita flour consumption during calendar year 2011. Exports for 2011/12 are projected 75 million bushels lower with larger supplies and exports expected for Canada and the EU-27. The season-average farm price for all wheat is projected at $7.35 to $8.35 per bushel, up from last month's range of $7.00 to $8.20 per bushel, supported by higher corn prices.

Global wheat supplies for 2011/12 are projected 7.6 million tons higher, mostly on larger beginning stocks in Canada and increased production for Canada, EU-27 and Ukraine. Beginning stocks for Canada are raised 1.3 million tons and production is raised 2.5 million tons, both reflecting the latest estimates from Statistics Canada. EU-27 production is raised 2.3 million tons with increases for Germany, Romania, France, Spain and Bulgaria as harvest reports and revisions to official estimates continue to indicate higher yields. Production for Ukraine is raised 1.0 million tons based on the latest harvest reports. Other smaller production changes include 0.2-million-ton increases for both Brazil and Morocco and a 0.2-million-ton reduction for Uzbekistan.

World wheat trade is raised slightly for 2011/12 with increased imports projected for the U.S. and Uzbekistan. Global exports are also raised as higher expected shipments from Canada and EU-27 more than offset reductions for the U.S. and Turkey. Global wheat consumption is increased 1.9 million tons, with higher expected wheat feeding in Canada, China, Morocco and Turkey more than offsetting a reduction for Russia. World wheat ending stocks for 2011/12 are projected 5.7 million tons higher at 194.6 million. At this level, global stocks would be up from 2010/11 and the second largest in the past decade.


COARSE GRAINS: U.S. feed grain supplies for 2011/12 are projected lower this month with reduced corn production as summer heat and dryness continue to be reflected in survey-based yield forecasts. Corn production for 2011/12 is forecast 417 million bushels lower, with expected yields down from last month across most of the Corn Belt. The national average corn yield is forecast at 148.1 bu./acre, down 4.9 bushels from August and 16.6 bushels below the 2009/10 record. As forecast, this year's yield would be the lowest since 2005/06. Despite the lower yield, production is forecast to be the third highest ever, with the second highest planted area since 1944.

Total corn supplies for 2011/12 are lowered 442 million bushels with a 20-million-bushel reduction in carry-in and a 5-million-bushel reduction in expected imports. Beginning stocks for 2011/12 drop, with small increases in 2010/11 exports and use for sweeteners reflecting the latest available data. Imports for 2011/12 are reduced with the smaller forecast corn crop in Canada. Supplies for 2011/12 are projected to be the lowest since 2006/07.

Total corn use for 2011/12 is projected 400 million bushels lower with tighter upplies. Projected feed and residual use is reduced 200 million bushels, mostly reflecting lower expected residual disappearance with the smaller forecast crop. Corn use for ethanol is projected 100 million bushels lower with higher expected corn prices and continued weakening in the outlook for U.S. gasoline consumption as forecast by the Energy Information Administration. Corn exports for 2011/12 are projected 100 million bushels lower with increased supplies and exports expected from Ukraine, Argentina and Brazil. U.S. ending stocks are projected 42 million bushels lower at 672 million. The stocks-to-use ratio is projected at 5.3%, compared with last month's projection of 5.4%. The season-average farm price is projected 30 cents per bushel higher on both ends of the range to a record $6.50 to $7.50 per bushel.

Global coarse grain supplies for 2011/12 are projected 3.1 million tons lower with larger barley, sorghum, millet and oats supplies only partly offsetting the reduction for corn driven by the U.S. changes. Global corn supplies are reduced 4.5 million tons as increases in foreign beginning stocks and production partly offset the reduction in U.S. supplies. Projected global corn production for 2011/12 is lowered 5.9 million tons as a 4.8-million-ton increase in expected foreign output is outweighed by the 10.6-million-ton U.S. reduction. Brazil and Argentina production for 2011/12 are raised 4.0 million tons and 1.5 million tons, respectively, on higher expected area with rising returns for corn in both countries. Ukraine corn production is raised 1.5 million tons based on indications for higher yields. Production is raised 1.0 million tons for EU-27 with higher expected yields in France and several countries in Eastern Europe. Production is lowered 1.0 million tons for Canada based on the latest Statistics Canada estimates. Production is also lowered 2.1 million tons for Egypt as lack of government restrictions on planting resulted in a sharp shift in acreage away from corn and into rice.

Global coarse grain trade for 2011/12 is raised slightly, with increased foreign trade in barley and corn more than offsetting the reduction in U.S. corn shipments. Barley imports are raised for Saudi Arabia and Syria, with larger shipments expected from Ukraine and Russia. Corn exports are raised for Ukraine, Argentina, Brazil and EU-27. Corn exports are lowered for Canada and Paraguay. Global corn consumption for 2011/12 is lowered 7.3 million tons, mostly reflecting lower expected use in the U.S. Foreign corn feeding and consumption are nearly unchanged. World corn ending stocks are projected up 2.9 million tons, with increases in South America, Ukraine and EU-27 more than offsetting the reduction projected for the U.S.

RICE: U.S. rice production in 2011/12 is forecast at 190.9 million cwt., up 2.8 million from last month due entirely to an increase in yield. Harvested area is estimated at 2.62 million acres, down 20,000 acres. The average yield is estimated at a record 7,273 lb./acre, up 159 lb./acre from last month. Long-grain production is stimated at 119.2 million cwt., down 4.9 million from last month, and the smallest crop since 1996/97. Combined medium- and short-grain production is estimated at a record 71.6 million, an increase of 7.7 million from last month.

All rice beginning stocks for 2011/12 are lowered 2.7 million cwt. from last month to 48.4 million (rough-equivalent basis) based on USDA's Rice Stocks report released on Aug. 26. The import projection is raised 1.0 million cwt. to 19.0 million, as it is expected that more long-grain rice will be imported due to tighter domestic supplies.

Exports for 2011/12 are projected at 93.0 million cwt., down 4.0 million from last month and down 18.6 million from the revised 2010/11 estimate. Long-grain exports are lowered 5.0 million cwt. from last month to 61.0 million, and combined medium- and short-grain exports are raised 1.0 million to 32.0 million. The decrease in the export projection is due mostly to a much tighter supply situation, but additionally to an expected increase in competition from South American exporters in Western Hemisphere long-grain markets. Long-grain exports to Iraq are also expected to be lower. Increased competition, principally from Egypt, is expected to reduce medium-grain exports to Libya. All rice ending stocks for 2011/12 are projected at 38.3 million cwt., up 5.1 million from last month but down 10.1 million from the revised 2010/11 stocks.

The long-grain season-average farm price range is projected at $13.50 to $14.50 per cwt., up 80 cents per cwt. on both ends of the range from last month compared to $11.10 per cwt. for 2010/11. The combined medium- and short-grain farm price range is projected at $15.00 to $16.00 per cwt., up 50 cents per cwt. on each end of the range from last month compared to a revised $18.40 per cwt. for 2010/11. The 2010/11 all rice season-average farm price is forecast at $14.00 to $15.00 per cwt., up 80 cents per cwt. on each end of the range from last month compared to a revised $12.70 per cwt. for 2010/11. The increase in prices is due to both expected tighter domestic supplies, for long-grain, and higher global prices as a result of government policies in Thailand aimed at supporting domestic rice prices. Additionally, higher commodity prices in general will help to support rice prices.

Projected global 2011/12 rice supply and use are increased from last month. Global rice production is projected at a record 458.4 million tons, up 2.1 million tons from last month, primarily due to larger expected crops in Brazil, China, the Philippines and the U.S. China's 2011/12 rice crop is increased 1.0 million tons to 139.0 million, due mainly to an increase in the early rice crop. Brazil's rice crop is raised nearly a million tons due to both an increase in area and expected yield. The recent surge in global prices accounts for the increase in planted area in Brazil from last month's forecast. Global 2011/12 trade is nearly unchanged from last month. Global consumption is raised 0.7 million tons from a month ago, due mostly to China. Global ending stocks for 2011/12 are projected at 98.7 million tons, up 0.7 million from last month and the largest stocks since 2002/03. Stocks are raised for Brazil, China, the Philippines and the U.S.

SUGAR: Projected U.S. sugar supply for fiscal year 2011/12 is decreased 215,000 short tons, raw value, from last month, due to lower beginning stocks and production. Beet sugar production is lowered 175,000 tons based on lower forecast sugarbeet production. Sugar use is unchanged.


LIVESTOCK, POULTRY, AND DAIRY: The 2011 forecast of total red meat and poultry production is raised, reflecting higher beef production but lower pork production. Continued large cow slaughter is expected to boost beef production. A slower pace of slaughter in the third quarter and slightly lower weights due to heat stress are expected to result in lower pork production compared to last month. USDA will release its quarterly Hogs and Pigs report on Sept. 28, providing an estimate of sow farrowings in June-August and an indication of producer intentions for farrowings into early 2012. Broiler production is about unchanged, as an increased forecast of third-quarter production is offset by lower-than-expected production in the fourth quarter. No change is made to turkey production and only a slight revision is made to egg production.

For 2012, the beef production forecast is raised, but pork and poultry production forecasts are reduced from last month. Larger forecast early year beef production reflects marketing of the large number of calves which are being placed as a result of drought in the Southern Plains. However, production in subsequent quarters will reflect tighter supplies of cattle and lighter expected carcass weights due to the placement of lighter cattle and relatively high feed prices. Pork forecasts are reduced as tight feed supplies dampen hog weights. Poultry production forecasts are reduced as relatively high feed costs limit the sector's expansion. The egg production forecast is lowered due to lower hatching egg production.

Beef import forecasts are lowered in 2011 and 2012 as U.S. cow slaughter remains relatively high. The beef export forecast for 2011 is little changed from last month as lower-than-expected second-quarter exports are largely offset by higher forecast exports in the second half of the year. The pork export forecast for 2011 is lowered as second-quarter exports were smaller than expected. The broiler export forecast is also reduced on lower-than-expected shipments in the second quarter. No change is made to red meat or poultry exports for 2012.

The cattle price for 2011 is about unchanged as a higher third-quarter price is offset by a lower fourth-quarter price. Cattle prices for 2012 are forecast slightly lower as larger marketings pressure cattle prices early in the year. Hog prices are raised slightly from last month for 2011, but are unchanged for 2012. Broiler prices are lowered for 2011 as supplies remain relatively large and demand relatively weak. Prices for 2012 are raised from last month on lower production.

The milk production forecast for 2011 is raised, as the dairy herd has been expanding at a more rapid rate than expected. However, the forecast for 2012 is reduced as higher forecast feed prices reduce the rate of growth in milk per cow. Commercial exports for 2011 are raised on the strength of current product exports. For 2012, fat basis exports are lowered, largely on slightly weaker butter exports. Skim solids imports are raised for both 2011 and 2012.

Cheese prices for 2011 are forecast lower, but nonfat dry milk (NDM) and whey prices are forecast higher on the strength of relatively strong exports. Butter prices remain unchanged. The Class III price is lowered, based on the lower forecast cheese price, but the Class IV price forecast is unchanged from last month. For 2012, butter and cheese prices are unchanged, but NDM and whey prices are forecast higher. The Class III price is unchanged, but the Class IV price forecast is raised. The All-Milk price forecast is lowered to $20.15 to $20.35 per cwt. for 2011, but is unchanged at $17.80 to $18.80 per cwt. for 2012.


COTTON: This month's U.S. 2011/12 cotton estimates reflect lower supplies and offtake, resulting in ending stocks marginally above last month. Beginning stocks are lowered 250,000 bales while production is unchanged, based on a combination of higher area and lower yields. Domestic mill use is unchanged. Exports are reduced 300,000 bales to 12.0 million, due mainly to lower U.S. supplies and lower imports by China. Ending stocks are raised 100,000 bales to 3.4 million bales. The marketing-year average price received by producers is projected to range from 85 to 105 cents per pound, unchanged from last month.

The world 2011/12 estimates show small revisions from last month. Production is raised marginally, as an increase for China more than offsets reductions for Pakistan, Turkmenistan and Uzbekistan. World consumption is virtually unchanged and world trade is reduced slightly. Global ending stocks are now estimated at 51.9 million bales, 18% above the beginning level and slightly below last month.

The U.S. 2010/11 balance sheet is revised to reflect higher mill use and lower ending stocks relative to last month. The Aug. 25 U.S. Census Bureau report "Consumption on the Cotton System and Stocks" included preliminary end-of-season stocks data; however, this data will not be revised by Census in September due to the elimination of the Current Industrial Reports series. USDA's Farm Service Agency (FSA) collects data on both cotton domestic mill use and stocks in public warehouses as part of its ongoing program responsibilities. The August Census report and the FSA data were considered in making changes for 2010/11.

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Tel.1-312-573-2699, 1-312-823-9189

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

November Soybean & December Corn and September Corn Daily Numbers & Trade Ideas for 9/7/11

Sep 08, 2011

This report was sent to subscribers on 9/6/11 1:45 p.m. Chicago time to be used for trading on 9/7/11.

November Soybeans

After the close recap on 9/7/11: My resistance was 14.34 ½, .00 ¼ from the actual high, and my support was 14.08 ½, .04 from the actual low.

December Corn

After the close recap on 9/7/11: My resistance was 7.67 ½, .02 ½ from the actual high, and my support was 7.38 ½ FG, .05 ¼ from the actual low.

September Corn

After the close recap on 9/7/11: My resistance was 7.57 ½, .02 from the actual high, and my support was 7.28 ¾, .04 ¾ from the actual low.

Subscribe now! Do yourself a favor and get your numbers after the market is closed to be used for the next session trading. Ask yourself how much would it have been worth to read my comments and get my numbers 14 hours before today's open outcry.

All charts and numbers for 9/8/11 have already been sent to subscribers at 5:00 pm.

November Soybeans           
                                 
14.45 ¾ FG
14.34 ½
--------------14.21 ½ Pivot
14.08 ½
13.84

5 day chart... Down from last week same day
Daily chart .... Up
Weekly chart ... Up
Monthly chart Up $13.30 ½ is the 200 DMA
ATR 24 ½ Balanced 46%

nov beans 9 7 11

 

For 9/7/11: Uptrend line is now resistance, bracket line and then daily numbers support.

 

In my daily soybean numbers on Tuesday; my resistance was not in play with the sharply lower open; my support was .04 ¾ from the actual low.      
            
December Corn

 

7.67 ½ Top Channel Line
7.60 FG
-----------7.54 ½ Pivot
7.49
7.38 ½ FG Key Uptrend Line Support
 

5 day chart........ Down from last week same day
Daily chart ...... Up
Weekly chart .......Up
Monthly chart .... Up 6.28 ½ is the 200 DMA
ATR 18 ½ Balanced 50%
                               

december corn  9 7 11

For 9/7/11: "Top channel line at the gap is strong resistance. Uptrend line at the gap at $7.38 ½ is support, contract high at $7.79 resists".

In my daily December corn numbers on Tuesday; my pivot acted as resistance and was .01 from the actual high; my support was .04 ¼ from the actual low.           

September Corn

7.65 2011 High & "Double Top"
7.57 ½ FG
-------------7.49 ¾ Pivot
7.42
7.28 ¾ FG Use the same numbers as used on 9/6/11

ATR 17 ¾ Balanced 55% 200 day MA 6.56

You can zoom in on any chart
NO MATTER THE TRADE IDEA, I ALWAYS PLACE MY STOP AT THE SAME TIME I PLACE MY ENTRY ORDER.

sep corn  9 7 11

9/7/11: Bracket line is resistance, gap is support now.

In my daily September corn numbers on Tuesday; my pivot acted as resistance and was .00 ¾ from the actual high; my support was .06 from the actual low.

I always say "When we are near the bracket line support I have a take the buy signal bias, and when near the bracket line resistance I have a sell signal bias".

9/7/11:

Grains: Spot on corn numbers and soybean support, but soybean resistance was not in play. Soybeans opened at the gap support which turned out to be the high, and went down and jabbed below the bracket line support. The low of the day is support now, and the gap at $14.45 ¾ left from Friday's close is resistance. Choppy trade is to be expected this week not only for soybeans but corn too. I look for that low to hold and the gaps above to resist going into the report on Monday. In corn, the gap at $7.38 ½ coupled with the key uptrend line will support, and the top channel line at $7.67 ½ or the 2011 high of $7.79 will resist. Your guess is as good as anyone's. Informa came out at 151 bu./acre and you know I agree with that guess based on crop ratings. Speaking of which, continued to decline 2% in corn and 1% in beans. Others came out with sub-148 numbers. Nothing has changed for me; "I want to trade the numbers today with a bearish bias and risk $.06 in corn and $.08 in soybeans on any idea using a stop to protect."

December 2012 corn is now $1.10 below the July 2011 futures, and the record was posted in that spread in 2011 at $1.33 ½. This is a repeat of last year for the same reason when I said, either the old crop will come down to the new crop, or the new crop should gain on the old crop. Producers should only concentrate on hedging their 2011 crop and using their money for margin to do so, not to margin the 2012. They can make more on waiting for a good basis using options than what is lost on price for 2012. If all input costs for 2012 are already locked in, and you have enough money, it costs almost nothing to hedge locking in $6.60 until $1 down. I cannot remember a year that you could do it cheaper. Since it is more profitable to plant corn next year than soybeans, it could cause soybeans to gain in relation to corn by March.

9/5/11:

Grains: Spot-on grain numbers, and September corn support number was exact. November soybeans closed $.22 ¼ higher for the week, December corn closed $.07 lower. Action on Friday keeps the bulls' hopes alive, but until corn can close above the double top, I remain a seller, especially for day trades. November soybeans chart is bullish, but the gap lower trade on Thursday followed by a lower high for the day on Friday continues to point to further corrective action to the downside. The gap support from Thursday close was not filled and could provide the springboard higher if tested again and the bears fail to fill it.

I think I have summarized well the drivers in the grain market, as well as the sentiment, emotions and momentum. It is impossible to know what is really out there in the fields and what will actually be harvested. I do not bet money on my guesses, but rather try to take out of the market what I can when the market provides an opportunity at support or resistance levels, and the reward is worth the risk. When my number does not hold I KNOW why I lost money; can you say that on your fundamental idea right now? If I wanted to trade on my guess of the fundamentals, it would be when, at a chart level that provides an entry, I use a known risk option strategy that reflects my thoughts of my objective, and the time frame for it to happen, knowing I cannot be stopped out, lose more money than I thought on the idea, and have the luxury of buying the time to see if my idea will in fact profit.

9/1/11: Grains: Spot-on numbers. As long as September corn does not close above the double top, I will always want to day trade selling against it and risk $.06 on the trade idea. I also feel there is more risk to the downside rather than the upside going into the weekend. I insist you go with your own thoughts, but take under consideration the double top in corn, and that the marathon is in the last few miles before the finish line, for at least this race higher. $8 is within reason before the report on Sept. 12, and corn should be well supported with the market focused on yields and continued dry weather. Even if yields are known and are somewhat bullish, we have 12 months to ration what is there. I am still at 151ish bu./acre give or take 1 bu./acre, but if in fact we do get only 145, $9 should be tested.

SA soybeans stocks are up 400 mb and that should take away exports from the U.S. and relieve some of our tightness. In early August when SA reported stocks, the PRC demand was in question, and we went below $13 as a result, so I cannot get too friendly at this time at this price level. If continued dry weather persists and ratings decline, $15 could be seen near-term. I just cannot be bullish at this time with all the unknowns at this price level.

 

 

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July 25, 2011: Producers who started to hedge with me in January 2010 at $4 got $5 or more free and clear by December 2010. Half of my producers held their old crop into this year using my option strategies and sold when the CBOT was $6.50 or higher. About a third of my producers got $7.50 or more. I have three producers who still have some old crop corn and have already locked in $7.70 or more and have watched their "basis" improve dramatically. I have one producer in South Dakota who watched his basis improve from $1.30 under the CBOT price to plus $.45 last week. The basis is always in play with my strategies but can be locked in at any time.


For 2011 corn, we started hedging last summer by locking in as much input costs as possible. You cannot hedge until this is done because you are assuming more risk than not hedging at all, because after you lock in a futures price, until you buy your inputs, you might be "locking in a loss."


After input costs were locked in, I did not start to recommend hedging 2011 corn and soybeans until the last week of 2010, when December 2011 corn was at $5.50 and November 2011 soybeans were at $13. I recommended hedging only 25% to 50% at that time since the charts were still bullish, but still the prudent thing to do. Using my strategies, all of my producers have locked in $6.60 or higher now with most at $6.90. Yes, we "morphed" the original hedge $1.10 or higher. Soybeans are now between $13.60 and $14, but some have kept some of the original hedge at $13. They are protected at $13 down to $12.20, but at the same time they are long their crop above $13 unhedged until $15. Yes, they can make another $2 to the upside, or lock in some of it on the way up.


In the current one-day free trial that you receive, you will see much of the process of how and when they took advantage of the rally even though some were bearish. My strategy allows making more money than the original hedge if the market can rally, no matter the reason, and have some protection if the market goes down. You need not work with me to use my daily numbers service, but my option order execution is second to none. 

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

The seven markets now covered daily are Soybeans, Corn, Crude oil, S&P, 30-yr TBond, Gold, and Nat gas.

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.

Find out why my subscribers from Canada, China, Czech Republic, Germany, India, Switzerland, South Korea ,Turkey and the UK keep renewing this service.

HowardTyllas Daily Numbers & Trade Ideas cover eight markets for less than $10 a day,

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

$199.00 USD for each month, renewable monthly

 

The weekly service is "Monday only" and comes out usually by Saturday morning so you can prepare for Sunday night and Monday's trade.
 

WeeklyService: 13 weeks for $129 total subscription fee.

Copy and paste if the link is not working.
 

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May Your Next Trade Be The Best


Howard Tyllas

Tel.1-312-573-2699, 1-312-823-9189

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 promise, 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.

 

 

 

HowardTyllasDaily Numbers & Trade Ideas $ 199.00

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