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March 2012 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.

USDA 2012 Plantings Intentions Report in Millions of Acres for 3/30/12

Mar 30, 2012

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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.

USDA 2012 Planting Intentions Report in millions of acres (released March 20, 2012, 7:30 a.m. CST)
released March 30, 2012

Crop

USDA March Estimate

Average Guess

Range

USDA 2011 Plantings

Corn

95.9

94.7

93.7 - 95.7

91.921

Soybeans

73.9

75.5

74.5 - 76.7

74.976

All Wheat

55.9

57.6

56.6 - 58.3

54.409

Winter Wheat

41.7

42.0

41.5 - 42.6

40.646

Spring Wheat

12.0

13.4

12.1 - 14.5

12.394

Durum

2.2

2.3

1.5 - 25

1.369

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

The 6 markets now covered daily are Soybeans,Corn, Crude oil, S&P, 30 yr TBond and Gold

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.

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Howard Tyllas

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

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 3/30/12

Mar 30, 2012

Sign up: Free Learn a better way to hedge for farmers

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. Grain Stocks

Released March 30, 2012, by the National Agricultural Statistics Service
(NASS), Agricultural Statistics Board, United States Department of
Agriculture (USDA).

Corn Stocks Down 8 Percent from March 2011
Soybean Stocks Up 10 Percent
All Wheat Stocks Down 16 Percent

Corn stocks in all positions on March 1, 2012 totaled 6.01 billion bushels,
down 8 percent from March 1, 2011. Of the total stocks, 3.19 billion bushels
are stored on farms, down 6 percent from a year earlier. Off-farm stocks, at
2.82 billion bushels, are down 10 percent from a year ago. The
December 2011 - February 2012 indicated disappearance is 3.64 billion
bushels, compared with 3.53 billion bushels during the same period last year.

Soybeans stored in all positions on March 1, 2012 totaled 1.37 billion
bushels, up 10 percent from March 1, 2011. Soybean stocks stored on farms are
estimated at 555 million bushels, up 10 percent from a year ago. Off-farm
stocks, at 817 million bushels, are up 10 percent from last March. Indicated
disappearance for the December 2011 - February 2012 quarter totaled
998 million bushels, down 3 percent from the same period a year earlier.

All wheat stored in all positions on March 1, 2012 totaled 1.20 billion
bushels, down 16 percent from a year ago. On-farm stocks are estimated at
217 million bushels, down 25 percent from last March. Off-farm stocks, at
983 million bushels, are down 14 percent from a year ago. The
December 2011 - February 2012 indicated disappearance is 462 million bushels,
down 9 percent from the same period a year earlier.

Durum wheat stocks in all positions on March 1, 2012 totaled 35.3 million
bushels, down 37 percent from a year ago. On-farm stocks, at 17.4 million
bushels, are down 51 percent from March 1, 2011. Off-farm stocks totaled
17.9 million bushels, down 13 percent from a year ago. The
December 2011 - February 2012 indicated disappearance of 13.2 million bushels
is up 10 percent from the same period a year earlier.

Barley stocks in all positions on March 1, 2012 totaled 93.7 million bushels,
down 32 percent from March 1, 2011. On-farm stocks are estimated at
26.5 million bushels, 54 percent below a year ago. Off-farm stocks, at
67.2 million bushels, are 16 percent below March 2011. The
December 2011 - February 2012 indicated disappearance totaled 45.3 million
bushels, 7 percent above the same period a year earlier.

Oats stored in all positions on March 1, 2012 totaled 72.5 million bushels,
16 percent below the stocks on March 1, 2011. Of the total stocks on hand,
19.8 million bushels are stored on farms, down 27 percent from a year ago.
Off-farm stocks totaled 52.8 million bushels, down 11 percent from the
previous year. Indicated disappearance during December 2011 - February 2012
totaled 6.60 million bushels, down 55 percent from the same period a year
ago.

Grain sorghum stored in all positions on March 1, 2012 totaled 108 million
bushels, down 37 percent from a year ago. On-farm stocks, at 12.8 million
bushels, are down 2 percent from last March. Off-farm stocks, at 95.1 million
bushels, are down 40 percent from a year earlier. The
December 2011 - February 2012 indicated disappearance from all positions is
43.0 million bushels, down 35 percent from the same period last year.

Sunflower stocks in all positions on March 1, 2012 totaled 910 million
pounds, up 4 percent from March 1, 2011. All stocks stored on farms totaled
377 million pounds and off-farm stocks totaled 533 million pounds. Stocks of
oil type sunflower seed are 732 million pounds; of this total, 298 million
pounds are on-farm stocks and 434 million pounds are off-farm stocks. Non-oil
sunflower stocks totaled 178 million pounds, with 78.7 million pounds stored
on the farm and 99.5 million pounds stored off the farm.

This report was approved on March 30, 2012.

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

The 6 markets now covered daily are Soybeans, Corn, Crude oil, S&P, 30 yr TBond and Gold

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.

 

$199.00 USD for each month, renewable monthly

HowardTyllasDaily Numbers & Trade Ideas $ 199.00

 

Howard Tyllas

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

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

Tel.1-312-573-2699, 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 3/9/12

Mar 09, 2012

Sign up: Free Learn a better way to hedge for farmers

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.

 

 WASDE Report for 3/9/12

OILSEEDS: U.S. soybean supply and use projections for 2011/12 are mostly unchanged this month. U.S. soybean exports are unchanged at 1.275 billion bushels as reduced supplies in South America raise prices, reducing global imports. Although soybean meal exports and domestic use are raised this month, soybean crush remains unchanged due to a higher soybean meal extraction rate. Food use of soybean oil is reduced reflecting increased imports of canola oil and palm oil. Soybean oil stocks are projected at 2.4 billion pounds, up 100 million from last month.

The U.S. season-average soybean price range for 2011/12 is projected at $11.40 to $12.60 per bushel, up 30 cents on both ends of the range. Soybean meal prices are forecast at $310 to $340 per short ton, up 20 dollars on both ends of the range. Soybean oil prices are forecast at 50.5 to 54.5 cents per pound, unchanged from last month.

Global oilseed production for 2011/12 is projected at 445.7 million tons, down 6.7 million from last month. Foreign production, projected at 354.5 million, accounts for all of the change. Brazil soybean production is forecast at 68.5 million tons, down 3.5 million tons from last month due to lower projected yields resulting from hot, dry conditions in the southern states. Argentina soybean production is reduced 1.5 million tons to 46.5 million. Despite improved weather in recent weeks in much of the country, lower yields are projected due to continued warm, dry weather through February in northeastern growing areas. Paraguay soybean production is also reduced this month due to the effects of drought. With precipitation for November through February at the lowest level in over 25 years, soybean production is projected at 5 million tons, down 1.4 million from last month and 34 percent below early-season expectations. Other changes include lower rapeseed, peanut, and sunflowerseed production for India, increased cottonseed production for Brazil, and increased sunflowerseed production for Argentina.

Global oilseed trade for 2011/12 is projected at 108.4 million tons, down 2.1 million mainly reflecting reduced soybean trade. Lower soybean exports are forecast for Brazil and Paraguay. Soybean imports are reduced for China, EU-27, Indonesia, Japan, South Korea, and Taiwan. China soybean imports are reduced 0.5 million tons to 55 million. Global oilseed ending stocks are projected at 67.8 million tons, down 3.4 million from last month. Reduced soybean stocks in Brazil and Argentina account for most of the change.


WHEAT: U.S. wheat ending stocks for 2011/12 are projected 20 million bushels lower this month as lower food use is more than offset by higher exports. Projected food use is lowered 5 million bushels reflecting the latest flour production data reported by the North American Millers' Association. Exports are projected 25 million bushels higher based on shipments and sales to date. Projected exports of Hard Red Spring and White wheat are each raised 10 million bushels. Projected Durum exports are raised 5 million bushels. Prices received by producers for the 2011/12 marketing year are projected at $7.15 to $7.45 per bushel, unchanged from last month.

Global wheat supplies for 2011/12 are nearly unchanged with lower China and Bangladesh beginning stocks offsetting higher production for Australia. Beginning stocks are lowered 1.0 million tons for China with an increase in food, seed, and industrial use for 2010/11. Australia production for 2011/12 is raised 1.2 million tons in line with the latest official estimate by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).

Global wheat trade is raised for 2011/12 with higher imports for a number of countries. The biggest increase is for Iran, up 0.8 million tons, reflecting recent purchases and expected deliveries before the end of the local April-March marketing year. Imports are raised 0.3 million tons each for Algeria, South Korea, and Uzbekistan. Smaller increases are made for Azerbaijan, Chile, Georgia, and Angola. Imports are lowered 0.2 million tons for Syria. The largest export increase is for the United States. Exports are also increased for Australia, Brazil, and Kazakhstan, each up 0.5 million tons. Smaller increases are made for Turkey and Serbia. At the projected 142.9 million tons, global exports are just 0.6 million tons short of the 2008/09 record.

Global wheat consumption for 2011/12 is raised 3.5 million tons mostly on higher food, seed, and industrial use in China and higher wheat feeding in Australia, Iran, and South Korea. Partly offsetting are reductions in EU-27 wheat feeding and food, seed, and industrial use. Global ending stocks for 2011/12 are projected 3.5 million tons lower, mostly reflecting a similar sized reduction for China. EU-27 ending stocks are projected 1.5 million tons higher, but changes in a number of other countries, including the United States, offset the EU-27 increase.

COARSE GRAINS: U.S. corn, sorghum, and barley balance sheets for 2011/12 are unchanged this month. Oats imports for 2011/12 are projected 5 million bushels higher with larger expected shipments from Canada. Projected U.S. oats ending stocks are increased by the same amount. The projected ranges for the season-average corn and sorghum farm prices are both narrowed 10 cents on each end to $5.90 to $6.50 per bushel and $5.80 to $6.40 per bushel, respectively. The barley farm price range is lowered 10 cents on the top end of the range to $5.20 to $5.50 per bushel. The oats farm price range is raised 10 cents on the bottom end of the range to $3.35 to $3.55 per bushel.

Global coarse grain supplies for 2011/12 are projected 1.6 million tons higher with production increases for Brazil corn and India corn and millet. Partly offsetting are reductions in sorghum output for India and Argentina and corn output for South Africa and Ecuador. Brazil corn production is raised 1 million tons on higher expected area for the second crop, which is planted following soybeans. India corn and millet production are raised 0.5 million tons and 1.5 million tons, respectively, in line with the latest government crop assessments. India sorghum production is lowered 0.7 million tons mostly reflecting lower expected area as the crop faces significant competition from cotton, soybeans, and pulses. Argentina sorghum production is lowered 0.2 million tons with lower expected yields. South Africa corn production is lowered 0.5 million tons as higher reported area is more than offset by reduced yield prospects. Below-normal rainfall and above-normal temperatures throughout South Africa's maize triangle adversely affected pollination and early grain fill during February. Corn production for Ecuador is lowered 0.3 million tons as excess rains lower area and yields.

Global coarse grain trade for 2011/12 is raised with increases for corn and barley. Corn imports are raised for EU-27, Ecuador, and Peru, but lowered for Malaysia. Corn exports are raised for Brazil and India. Barley imports are raised for Iran and China. Barley exports are raised for Australia. Lower sorghum exports for Argentina are offset by higher expected shipments from Australia.

Global coarse grain consumption for 2011/12 is raised 2.2 million tons mostly on higher corn feeding in EU-27 and India, and higher millet use in India. EU-27 corn feeding is raised 1.0 million tons as corn is expected to replace higher priced wheat in animal rations. India corn and millet feeding are raised a combined 1.0 million tons. Millet food use is also raised 0.6 million tons for India. Partly offsetting these increases are reductions in sorghum food use in India, barley feeding in Australia, and corn feeding in Malaysia. Global coarse grain ending stocks for 2011/12 are lowered slightly, with 0.8-million-ton reduction in projected world corn stocks.


SUGAR: Projected U.S. sugar supply for fiscal year 2011/12 is increased 381,000 tons, raw value, from last month, due to higher imports and production. Florida cane sugar production is increased 30,000 tons based on processors( production projections reported in Sweetener Market Data. Imports are increased 351,000 tons, with a 301,000-ton increase from Mexico and a 50,000-ton increase in re-export imports. Total use is increased 210,000 tons, in line with higher deliveries reported for October-December 2011 in Sweetener Market Data.

For Mexico, updated data for 2010/11 show lower use and higher ending stocks, compared with last month. For 2011/12, Mexico(s projected domestic use is lowered, commensurate with the change in 2010/11. Imports of sugar are increased to reflect entries during October to January 2011/12. With higher projected supplies and lower domestic use and ending stocks, exports are raised.

LIVESTOCK, POULTRY, AND DAIRY: The 2012 forecast of total red meat and poultry production is raised from last month as higher broiler and turkey production is expected to more than offset lower forecast beef production. The pork production forecast is unchanged. The broiler production forecast is raised for the first half of the year based on January production data and stronger forecast prices. Beef production is lowered from last month. Steer and heifer slaughter is forecast lower, but is partly offset by higher expected cow slaughter. Early year carcass weights are raised due to mild weather in much of the country. Turkey production is forecast higher as higher prices are expected to encourage a more rapid expansion. Egg production is lowered slightly for 2012 as prices are forecast lower. Poultry and egg production for 2011 is adjusted to reflect revisions in production data.

The beef export forecast for 2012 is unchanged but imports are raised. Pork exports are raised from last month based on the strength of December export data. The broiler export forecast is unchanged from last month. Changes in estimates for 2011 trade reflect December data.

Cattle prices for 2012 are raised from last month, reflecting tightening supplies of fed cattle. Hog price forecasts are unchanged from last month. Broiler and turkey price forecasts are raised as current prices have strengthened. Egg price forecasts are reduced on lower-than-expected early year prices.

The milk production forecast for 2012 is raised. Milk cow numbers are raised as herds are increasing more rapidly than expected. Although herds are expected to decline from 2011 in the second half of the year, the rate will be less than previously expected. Mild weather in the early part of the year is also supporting higher levels of milk production. Import and export forecasts are unchanged. Changes in 2011 estimates of supply and use reflect revised annual stocks data and December trade data.

With higher forecast 2012 milk production, prices for cheese, butter, nonfat dry milk, and whey are lowered. As a result, both Class III and Class IV price forecasts are reduced from last month. The all milk price for 2012 is lowered to $17.60-$18.20 per cwt.

COTTON: The 2011/12 U.S. cotton supply and demand estimates include revisions to domestic mill use and ending stocks. Estimated mill use is reduced 100,000 bales from last month, reflecting activity to date. With beginning stocks, production, and exports unchanged, ending stocks are raised to 3.9 million bales. The forecast range for the average price received by producers of 88 to 93 cents per pound is raised one cent on the lower end.

The 2011/12 world cotton supply and demand estimates reflect higher supplies and lower consumption, resulting in an increase of nearly 1.6 million bales in forecast global ending stocks. Beginning stocks are raised mainly in Brazil and Egypt, while production is raised in Brazil and Pakistan, but lowered in Australia. Forecast consumption is reduced for China, Brazil, Egypt, and others, but is raised for South Korea. World trade is estimated nearly 4 percent above last month, as India government sources have reported sharply higher exports to date this season than were estimated previously. The revised India export forecast of 7.75 million bales assumes that the ban on further exports announced March 5, 2012, remains in place. Forecast world imports are raised 1.35 million bales, due mainly to a 1.5-million-bale increase in imports by China, where nearly 40 percent of domestic production has been placed in the government reserve. Based on these revisions, China's ending stocks are now projected at just over 20.0 million bales.

RICE: Small changes are made to the U.S. 2011/12 rice supply and use balances. The 2011/12 all rice import forecast is raised 1.0 million cwt to 20.0 million, based largely on the pace of imports reflected in the U.S. Bureau of the Census import data through December-all in long-grain rice. The increase in rice imports is largely due to a noticeable increase in fragrant rice imported from Thailand and India. Although the all rice export forecast is unchanged at 89.0 million cwt, combined medium- and short-grain rice is increased 1.0 million cwt to 32.0 million, and conversely, the long-grain projection is lowered the same amount to 57.0 million. The rough rice export forecast is lowered 1.0 million cwt to 31.0 million, which is offset by an increase in the combined milled and brown export forecast to 58.0 million (rough-equivalent basis). All rice ending stocks are projected at 40.5 million cwt, up 1.0 million from a month ago. Long-grain rice ending stocks are projected at 23.6 million cwt, up 2.0 million from last month, and combined medium- and short-grain rice stocks are forecast at 14.2 million, down 1.0 million from a month ago.

The 2011/12 long-grain season-average price is projected at $13.20 to $13.80 per cwt, down 20 cents on each end of the range from last month. The combined medium- and short-grain price is projected at $15.40 to $16.00 per cwt, up 20 cents on each end of the range. The all rice season-average price is forecast at $13.90 to $14.50 per cwt, unchanged from a month ago. Global rice prices from most sources have been trending down during the past month due largely to lackluster import demand and aggressive pricing by India.

USDA's rice Interagency Commodity Estimates Committee recently reviewed foreign rice milling rates in the USDA global supply and use database for the period 2006/07 through 2011/12. The Foreign Agricultural Service staff of USDA at U.S. embassies around the world provided actual milling yields, milling practices, and milling technology in an effort to better calibrate the average milling yield for a given country. Some countries indicated significant increases in the milling yields: Burma increased from 58 percent to 64 percent, Nigeria increased 60 percent to 63 percent, and Turkey increased 60 percent to 67 percent. The average milling yields used for India and China are unchanged at 66.7 percent, and 70.0 percent, respectively. Most of the changes are small. Average milling yields were changed for about 40 countries.

Global 2011/12 rice production and consumption are up more than 2.5 million tons from a month ago, while trade and ending stocks changes are less than 0.3 million. A large portion of the changes in global production and consumption can be attributed to the changes made to global milling rates as described in the preceding paragraph. The change in Burma's milling rate led to a 10 percent increase in forecast milled production for 2011/12-up 1.1 million tons. India's rice crop is raised 0.75 million tons to a record 102.75 million based on official data from the government of India. Conversely, Brazil's crop is lowered 0.14 million tons due to the effects of drought in Rio Grande do Sul, an important rice-growing State. The increase in global consumption is due primarily to increases for Burma, Egypt, and India. The changes in global trade are small. Global 2011/12 ending stocks are raised 0.2 million tons to 100.3 million, up 2.5 million from the previous year, and the largest since 2002/03.

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

The 6 markets now covered daily are Soybeans,Corn, Crude oil, S&P, 30 yr TBond and Gold

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 6 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

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.1-312-573-2699, 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.

March Soybean and Corn Daily Numbers & Trade Ideas

Mar 02, 2012

Daily Numbers & Trade Ideas for 3/1/12

Sign up: Free Learn a better way to hedge for farmers

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.

Sign up: Free 1 Day Trail of Daily Numbers & Trade Ideas

This report was sent to subscribers on 2/29/12 3:50 p.m. Chicago time to be used for trading on 3/1/12.

March Soybeans

After the close recap on 3/1/12: My pivot acted as resistance and was 13.13, .04 1/2 from the actual high, and my support was 13.01 1/2, .01 1/2 from the actual low.

March Corn

After the close recap on 3/1/12: My pivot acted as resistance and was 6.57 3/4, .00 1/4 from the actual high, and my support was 6.51 1/4, .01 3/4 (only .00 3/4 in open outcry) from the actual low.

All charts and numbers for 3/2/12 have already been sent to subscribers at 4.40 pm.

March Soybeans


13.38 ½ FG
13.24 ½
--------------13.13 Pivot
13.01 ½
12.91 ½

5 day chart... Up from last week same day
Daily chart .... Sideways
Weekly chart ... Sideways
Monthly chart Up 12.85 ¼ is the 200 DMA
ATR 17 Ex. Overbought 95%


For 3/1/12: I still say "The bracket line is support; daily numbers resists".

In my daily soybean numbers on Wednesday; my resistance was .07 (.05 ¼ in open outcry) from the actual high, my pivot acted as support and was .06 ½ from the actual low.

March Corn

6.76 ¼
6.64 ¼ Key Resistance near the 200 DMA
-----------6.57 ¾ Pivot
6.51 ¼
6.42

5 day chart.... Up from last week same day
Daily chart ...... Sideways
Weekly chart .......Down
Monthly chart .... Sideways 6.63 ½ is the 200 DMA
ATR 12 Ex. Overbought 93%



For 3/1/12: I still say "Low on Monday is support at the new steep uptrend line; January high resists".

In my daily corn numbers on Wednesday; my resistance was .05 ¼ from the actual high; my pivot acted as support and was .01 ¾ from the actual low.


3/1/12: Grains: Add $.01 ¼ to the March corn numbers to get the May numbers, add $.06 ½ to the March soybean numbers to get the May numbers.

Soybeans death march is killing the bears, but the bulls should be prepared if their guns are taken away and now pointed at them, to have a plan for defense. Gap lower open in tonight's market could spell the end to further advances, and if we can rally close enough to the pivot to only risk $.06 using a buy stop above $13.13, I would take the sell signal every time. Let me lose $.06 on this trade idea, if I get stopped out I would feel like a casino owner and will not have a thought about it, because after making a new high for the run and gap lower open and in range to take a sell signal, the odds are in my favor and works well in the long run. Let's face it, I feel it was money well spent; the odds are well in my favor. When the number does not hold and I get stopped out, I do not lose sleep over $.06.

My old subscribers are aware humans who trade and gamble on anything and not knowing where the odds of success are; will let a trade idea get away from them and it turns into a disaster. Not knowing where you are wrong is deadly compared to not knowing when to take a profit. This service has insisted that you form an approach based on your own criteria that fits your personality, be risk sensitive and have a reward that is worth the risk. Do not risk more than a reasonable amount on any trade idea, never be emotional, and have a plan for doing so. Lastly, be able to execute your plan and journal your thoughts and what you did or did not do. Keep it real, by doing so you can get better by improving what you see in writing and you should be able to listen to yourself or you are your own enemy.

Corn performance is clearly been good closing on the high for February, but to me as I have said is just trading in a sideways pattern and will continue to do so through the end of March until more is known about planting intentions and the weather in which to do so. December corn uptrend line comes in at $5.60 today and the downtrend line comes in at $5.73. December corn is about unchanged from where it closed on 12/21/11, which is almost exactly between the high and low that was made since then.

Options have been pumped up on the rally which is common, but today it would not surprise me to see at the money calls down almost exactly what the futures will be down. The "delta" for any at the money call or put with 3 weeks to go is 50%, meaning the option will move 50% of what the underlying futures contract moves.

I still say "I want to keep my bearish bias in soybeans and at resistance in corn today, and day trade the numbers and risk $.04 in corn and $.06 in soybeans using a stop to protect any idea".

2/29/12:

Grains: Spot on grain numbers! Excellent performance by the soybean bulls to grind higher up to my resistance of $13.08, with my next significant resistance being at the gap $.30 higher. A pullback to test the bracket line support is in order, and a further break to $12.80 would be where the bulls will want to defend to continue control. If the bracket line holds, the bulls will have reloaded and will try to overcome $13.08 on its way to the gap at $13.38 ½. It does not matter the fundamental reasons for the day by day price movement, because everything known and unknown result in the last trade price that I say is never wrong.

Bulls looking to get back in should first look to do so at the bracket line at $12.90. Typical bull chart action like this, the market will pause in 2 or 3 days after getting above the bracket line and come back to test it, and if it holds I look for $13.38 ½ FG. Since there are many days of higher highs and higher lows, I can make a case for buying at $12.80, but then I would only look for a retest of $13.08, not $13.38 ½ FG.

Everyone is mostly short April $6.50 (settled $.19) and $6.60 calls ($.14), and if this was the last day the $6.50 call would be worth $.07 ¼, the $6.60 would be worthless. The last day is 3 weeks from this Friday. You want the market to be above $6.50 (May contract) on expiration, because all will make at least $.10 seeing how you only have $6.40 put spreads. If you are bullish you should roll your April calls to May calls if you are going to hold grain (or your spec position) or you believe we can rally from here in the next 3 weeks. If not bullish, keep what you have. Because if they go higher your $6.50 call if the May futures are at $6.69 is still worth only $.19, anything lower is in your pocket, but below $6.40 you lose that $.10 in the bin until $6.50. Above $6.69 you make that $.10 in the bin. Regardless, at some point in time before expiration you will be able to buy back your April call and sell the May call.

Speculators should look at both sides of what April $6.50 calls are. You know how I just showed you if you sold that call and the market settled at $6.69 you would not lose money even though you are wrong the market. You can make money and be wrong, and if you are right you can make $.19 if May is just $.08 lower at $6.49 on expiration for the call to be worthless.

On the other hand if you buy that option for $.19, you would need to be right just to get your money back, and at $6.88 just to make even money of $.19. The reason it is costly to buy is that you pay a premium for the fact that you can only lose what you pay for it and there is no margin. The seller has unlimited risk and margin. I am telling you that you should look at each option no matter in or far out of the money as a futures contract, because it could happen when a "what if" occurs. Being long is one thing, being short is completely different. Look at being short the $6.50 call instead of being short a futures contract. I would only sell a future if I felt in the same timeframe as the call expiration; I was looking for much more downside than $.19. Otherwise instead of selling the future, it was much more in my favor to sell the call. I could be wrong the market and make money, and just a little right to make a lot. Here is the key, I ALWAYS used STOPS. I would use a $.09 stop to make the $.19, so my buy stop is at $.28. If the market went through a resistance level, on my chart that I no longer wanted to be short the market, I would get out. It did not matter if it was $.13 or $.33, the reason for being short was the chart NOT the option, and when the chart is no longer a sell, I want out. If they got to a support I would consider just taking a profit before expiration. I might have started with a $.09 stop, but I never risk more than the option is worth. If it is worth $.05 and I think it will be worthless, I am not going to risk more than $.05 to get it, so I use a $.10 stop. It does not matter that I sold it at $.19; I am always short from the last trade price when I determine the risk for the reward that remains.

I still say "I want to keep my bearish bias in soybeans and at resistance in corn today, and day trade the numbers and risk $.04 in corn and $.06 in soybeans using a stop to protect any idea".

2/28/12:

Grains: Spot on soybean numbers and accurate corn numbers. I said "Soybeans just do not want to break, or go up too quickly, and are on a mission to "jab" above the bracket line at $12.90 to see what is up there". They only pulled back a few cents, and now closing above $12.90 could turn into a death march for the bears, and the bulls are holding the reins. Like I also said before, "it will stop going up when it stops going up". Almost a daily barrage of higher highs and higher lows, but most days closing well off the high showing lack of conviction, but the market also has courage to buy any support on a day trading basis and push to see where the sellers come out.

As you know $12.90 is truly the line that separates what in the recent past has been the war between the bulls and bears and who takes control of direction. Above $13.08 the bears should run from this market, but until then if you are long here, you will earn every penny you make.

Producers always make more money if we rally by morphing and capturing when it is significant, you become bearish the price level, or just happy to lock in the money. Producers who are holding old crop have already locked in $13 to $14 and got long again from $11.20 to $11.60. Since then, soybeans have outperformed our expectations by rallying above the call strike sold almost monthly. They always got the difference between the put spread they were long until the call strike sold, that money is in the bin (speculators use a long futures contract), and they also got premium from the call strike sold each month, to more than pay for the put spread. If you did nothing, you no longer made money above the call strike, you lost in the hedge account, you made equal amount in the bin. When you roll you can start over at a higher strike, or morph the call and trade time for a higher strike price. Real time examples of what you can do follow.

If bullish, you are betting on the upside, and if right you will make money on having an ... Subscribe now!

The $12.90 call is working well and is bullish enough, but if you want to bet on higher prices, this would cost nothing to roll to the May $13.20 call. At some point of time when you think the market is at a place you want to take profits, you would then roll up the put spread to $13.20. Remember, you get to sell April calls and then May calls, so if you need to roll to May and not make much on the April call, you make it on the May call. If you can just add $.20 (let alone $.40 or more) to your bin every 2 months while getting protection for free, that is very profitable to continue to do.

The beauty of my strategy is that it looks to improve income while always having some protection. You can make more or less if bullish or bearish, but getting 70% more than the original hedge of what we can rally, is what my strategy is all about. Other services that are unhedged are no different than betting it all, and they are always happy when we rally, and they usually watch income come and go as seen in my comments with the typical hedge service that still has not sold some of its 2011 crop yet, and some sold 20% when we were at the absolute low of the last 9 months. My service locked in $7+ and had protection all year. You should always be concerned with the downside and protecting what you got, and allow for the "what if" and are in position to always make more if the market can rally no matter the reason or that you are a bull or a bear.

The only time you should gamble on an outcome is when you have a conviction for the trade idea. How much you gamble is the next thing to decide, and reflect that in contracts. My strategy has a known risk, so it is easy to figure the wager. If no conviction just stand aside and do nothing.

I want to keep my bearish bias and day trade the numbers and risk $.04 in corn and $.06 in soybeans using a stop to protect any idea.

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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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