Sep 19, 2014
Home| Tools| Events| Blogs| Discussions| Sign UpLogin


August 2014 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.

WASDE Report for 8/12/14

Aug 12, 2014

 WASDE Report for 8/12/14

 

Sign up: Learn a better way to hedge for free

 
Attention Corn & Soybean Producers:

 

Feel free to inquire on learning about the best way to hedge. In my opinion my strategy is the best I have seen since I became a member in 1976 trading corn and soybeans for my own account.

 


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 40 years. 

 

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

 

 OILSEEDS:  U.S. oilseed production for 2014/15 is projected at 113.7 million tons, up 0.6 million from last month mainly due to a higher soybean production forecast.  Soybean production for 2014/15 is forecast at 3,816 million bushels, up 16 million due to a higher yield.  Harvested area is forecast at 84.1 million acres, unchanged from July.  The first survey-based soybean yield forecast is a record 45.4 bushels per acre, 0.2 bushels above last month and 2.1 bushels above last year.  Soybean supplies for 2014/15 are projected slightly above last month based on the higher production forecast.  With minimal supply gains, soybean exports and crush are unchanged, leaving ending stocks projected at 430 million bushels.

The U.S. season-average soybean price for 2014/15 is forecast at $9.35 to $11.35 per bushel, down 15 cents on both ends.  Soybean meal and oil prices are forecast at $340 to $380, down 10 dollars at the midpoint.  Soybean oil prices are forecast at 35 to 39 cents per pound, down 1 cent at the midpoint.

U.S. soybean balance sheet changes for 2013/14 include reduced imports and increased exports.  Imports are lowered 5 million bushels to 80 million based in part on revised import data for September – December 2013 from the U.S. Department of Commerce.  Exports are raised 20 million bushels to 1,640 million reflecting both revised export data for September through December 2013 from the Department of Commerce and inspections data for July 2014.  These changes are offset with lower residual use, leaving ending stocks unchanged at 140 million bushels.  With these changes, the 2013/14 soybean stocks-to-use ratio is projected at 4.2 percent, which if realized would be the lowest in more than 40 years.

Global oilseed production for 2014/15 is projected at 521.8 million tons, slightly below last month.  Gains for rapeseed and cottonseed are more than offset by reductions for soybeans, sunflowerseed, and peanuts.  Higher soybean production for the United States is offset by a reduction for India where the delayed monsoon results in lower planted area.  Rapeseed production is raised for China, EU, and Ukraine.  These gains are partly offset by a smaller crop projected for Canada with lower area resulting from flooding in parts of Saskatchewan and Manitoba.  Other changes include lower sunflowerseed production for Russia, reduced peanut production for China, and increased cottonseed production for India.

WHEAT:  Projected U.S. wheat supplies for 2014/15 are raised this month mostly with an increase in forecast Hard Red Winter (HRW) wheat production as well as smaller increases for Soft Red Winter (SRW), Hard Red Spring (HRS), and Durum.  Northern parts of the HRW belt have substantially higher yields than the drought damaged southern and central plains.  The largest HRW increases are in Colorado and Nebraska.  After a delay in planting, HRS wheat has had very good growing conditions and yields are forecast well above average.  Feed and residual use for all wheat in 2014/15 is raised 10 million bushels to 155 million due to the larger supplies.  All wheat exports for 2014/15 are increased 25 million bushels because of the larger HRW crop.  The projected season-average farm price range is lowered 30 cents at the midpoint to $5.80 to $6.80 per bushel. 

World wheat production for 2014/15 is raised 10.9 million tons to a record 716.1 million.  The largest foreign increases are 6.0 million tons for Russia, 2.0 million tons for China, and 1.0 million tons for Ukraine.  The Russia and Ukraine increases are based on harvest reports that indicate very high winter wheat yields, especially for Russia.  The China increase reflects the latest government estimates for summer harvested grains.  Production is also raised 0.6 million tons for Belarus and 0.4 million tons for Moldova. 

Global wheat consumption is raised 6.9 million tons due mainly to increased prospects for wheat feeding.  The biggest feeding increase is for EU, which is raised 2.5 million tons.  Excessive harvest-time precipitation in several European production regions has increased the quantity of feed-quality wheat.  Russia wheat feeding is raised 1.0 million tons, and Ukraine and Belarus are each raised 0.5 million tons due to increased production in those countries.  Smaller feeding increases are made for Philippines, Moldova, and Israel. 

Global wheat trade for 2014/15 is nearly unchanged with increases in Russia and the United States offset by reductions in EU and several other countries.  The changes reflect larger crops in Russia and the United States as well as quality problems in EU.  India exports are lowered 0.5 million tons because of competition, especially from lower quality wheat in Ukraine and southeastern EU.  China and Russia imports are lowered 1.0 million tons and 0.5 million tons, respectively, because of increased production.  Egypt imports are lowered 0.5 million tons due to changes in its bread subsidy program that are expected to reduce waste.  Iran imports are raised 0.5 million tons reflecting government announced purchases.  With supplies rising faster than use, global ending stocks are raised 3.4 million tons and remain at a 3-year high.

COARSE GRAINS:  Projected 2014/15 U.S. feed grain supplies are raised this month with higher production forecasts for corn, sorghum, barley, and oats.  Corn production for 2014/15 is forecast 172 million bushels higher at a record 14,032 million bushels.  The first survey-based corn yield forecast, at a record 167.4 bushels per acre, is up 2.1 bushels from last month’s trend-based projection.  Sorghum production is forecast 19 million bushels higher with the forecast yield 3.0 bushels per acre higher than last month’s projection.  Small yield increases also boost barley and oats production slightly.

Corn supplies for 2014/15 are projected at a record 15,243 million bushels with the increase in production partly offset by a 65-million-bushel reduction in beginning stocks.  Corn use for ethanol and exports are raised 45 million bushels and 20 million bushels, respectively, for 2013/14, based on reported data to date.  Projected corn use for 2014/15 is higher with use for ethanol and exports each raised 25 million bushels, and feed and residual disappearance 50 million bushels higher with the larger crop.  Projected ending stocks for 2014/15 are raised slightly to 1,808 million bushels.  The projected season-average farm price for corn is lowered 10 cents at both ends of the range to $3.55 to $4.25 per bushel.

Sorghum supplies for 2014/15 are projected 4 million bushels higher as a 15-million-bushel increase in 2013/14 exports lowers 2014/15 beginning stocks, mostly offsetting the higher forecast production.  Projected sorghum exports for 2014/15 are raised 10 million bushels.  The season-average farm price for sorghum is also projected 10 cents lower at both ends of the range to $3.30 to $4.00 per bushel.

Global coarse grain supplies for 2014/15 are projected 4.9 million tons higher, mostly reflecting larger expected corn crops in the United States and EU and increased barley production for FSU-12.  The smaller projected carryin for the United States partly offsets this month’s 6.6-million-ton increase in global coarse grain output.  EU corn production is raised 1.4 million tons after abundant rainfall and favorable temperatures during July.  FSU-12 barley production is raised 3.1 million tons with a 2.0-million-ton increase for Russia and smaller increases for Belarus and Ukraine.  Barley production is also raised 0.3 million tons for EU.  Reduced prospects for corn, sorghum, and millet, with the delayed monsoon, lower India total coarse grain production 2.7 million tons, partly offsetting increases elsewhere.  Turkey corn production is also lowered 0.3 million tons.

Global coarse grain consumption for 2014/15 is raised this month with a 2.3-million-ton increase in world corn use.  Higher corn use in the United States accounts for most of the increase.  Corn consumption is lowered 2.0 million tons for EU as heavy summer rains have reduced wheat quality across the region, raising prospects for wheat feeding.  Corn food use is reduced 0.5 million tons for India with the smaller crop outlook.  Higher projected corn use for Egypt, Saudi Arabia, South Africa, Algeria, and Taiwan partly offset these reductions.  Corn imports are lowered for EU, but raised for Turkey, Saudi Arabia, Taiwan, Lebanon, and Algeria.  Global barley trade is raised with higher imports for Turkey and higher exports for Russia and Ukraine.  Global 2014/15 coarse grain ending stocks are projected 2.7 million tons higher reflecting larger barley ending stocks.  Global corn ending stocks are lowered slightly.


SUGAR:  The Mexico 2013/14 estimate for sugar production is reduced by 5,000 metric tons (MT) to 6.020 million, based on end-of-harvest reporting from Mexican authorities.  The 2013/14 estimate of exports is increased by 50,000 MT based on pace-to-date of exports to the United States.  Deliveries for consumption are reduced by 106,000 MT, based on a slowdown in the pace through June.  With 2014/15 beginning stocks 51,000 MT higher than last month, imports in 2014/15 are reduced by that same amount to meet consumption needs until the full start of the 2014/15 harvest in mid-December.  There are no changes to 2014/15 production, deliveries, total exports, or ending stocks.  Exports to the United States are reduced by 575,000 MT based on signed contracts confirmed by the USDA committing Mexico to ship to non-U.S. destinations in that amount in 2014/15.

 

The U.S. 2013/14 cane sugar production is lowered by 25,000 short tons, raw value (STRV) based on a slow harvest pace in Hawaii.  Tariff-rate quota (TRQ) shortfall for 2013/14 is increased by 87,547 STRV and 2013/14 imports from Mexico are increased by 58,423 for a net import reduction of 29,000.  For 2014/15, beginning stocks are reduced 54,000 STRV, cane sugar production is increased by 116,000 based on processors’ reporting, and imports from Mexico are reduced by 672,000 to 1.205 million.  With no other changes, ending stocks are projected at 837,000 STRV.

LIVESTOCK, POULTRY, AND DAIRY:  The forecast for total meat production in 2014 is raised from last month.  Production is raised for beef, pork, and broilers as lower feed prices encourage producers to raise animals to heavier weights.  Turkey production is reduced slightly based on June production data.  Egg production is reduced based on lower expected hatching egg production.  For 2015, lower feed costs are expected to lead to higher cattle, hog, and broiler weights, but in the case of beef, reduced feedlot numbers are expected to lead to lower slaughter, more than offsetting any gains from carcass weights.  Broiler producers are also expected to increase bird numbers more rapidly than previously forecast during 2015 as returns are expected to be more favorable.  Egg production forecasts are unchanged.

Forecasts for 2014 and 2015 beef imports are raised as demand for processing grade beef remains strong.  Exports for 2014 and 2015 are raised as demand in a number of countries remains strong, despite high beef prices.  Pork imports for 2014 and 2015 are raised slightly.  Despite the closure of Russia to U.S. exports into 2015, pork export forecasts for 2014 and 2015 are raised as demand in other major markets is expected to grow.  Broiler exports are reduced for 2014 and 2015 as Russia’s import ban will affect sales.  Turkey export forecasts are raised for 2014, but are unchanged for 2015.  

Cattle price forecasts for 2014 and 2015 are raised from last month on the strength of demand and continued tight supplies of fed cattle.  The annual price forecast for hogs is unchanged for 2014, but is lowered for 2015 from last month on slightly weaker expected demand.  The annual broiler price forecast for 2014 is lowered, but the price for 2015 is unchanged.  The turkey price forecast for 2014 is raised based on July price data.  The egg price forecasts for both 2014 and 2015 are raised as demand remains strong. 

The milk production forecasts for 2014 and 2015 are raised slightly as lower feed costs are expected to support higher output per cow.  Fat basis export forecasts for 2014 and 2015 are lowered as Russia’s ban on imports from a number of dairy exporting countries will likely increase competition in export markets.  Fat basis imports are raised as supplies in competing exporters are expected to be large.  The skim-solids export forecast is raised slightly for 2014, but is reduced in 2015 as competition increases.  Skim-solids imports are unchanged from last month.

Butter prices and whey price forecasts are raised for 2014 with strength in butter prices expected to carry into 2015.  Cheese prices and nonfat dry milk prices are forecast higher in 2014, but their price forecasts for 2015 are unchanged from last month.  Class III and Class IV prices for 2014 are raised on stronger component product prices and the Class III price forecast for 2015 is raised reflecting strength in whey prices.  The all milk price is raised to $23.55 to $23.75 per cwt for 2014, but remains unchanged at $19.75 to $20.75 per cwt for 2015.

COTTON:  The U.S. 2014/15 cotton forecasts include higher production, exports, and ending stocks compared with last month.  Beginning stocks are reduced 100,000 bales due to preliminary stocks indications for July 31, 2014.  Production is raised 6 percent to 17.5 million bales in the first survey-based estimate of U.S. crop production, mainly on lower expected abandonment.  Domestic mill use is unchanged, but exports are raised 500,000 bales to 10.7 million on stronger foreign import demand and the larger available supply.  Ending stocks are now forecast at 5.6 million bales, 39 percent of total use, the largest stocks-to-use ratio since 2007/08.  The forecast range for the marketing-year average price received by producers of 58-72 cents per pound is lowered on both ends, with the midpoint now forecast at 65 cents.

Revisions to the 2014/15 world cotton supply and demand balance sheet result in marginally lower global ending stocks compared with last month’s forecast.  Beginning stocks are reduced 600,000 bales due to adjustments in 2013/14 for several countries.  For 2014/15, production is raised for the United States, India, and Mexico, but lowered for Brazil and Australia.  World consumption is raised about 1 percent from last month to 112.6 million bales, the highest level since 2010/11, as falling prices are anticipated to boost cotton’s share of textile fiber use.  Ending stocks are now projected at 105.1 million bales, with stocks outside of China expected to grow by about 4 million bales from 2013/14.  

RICE:  U.S. 2014/15 total rice supplies are projected at 282.6 million cwt, up 2.8 million from last month on higher production.  USDA's first survey-based forecast of the U.S. 2014/15 rice crop is 228.8 million cwt, up nearly 21 percent from the previous year.  Average all rice yield is forecast at 7,560 pounds per acre, up 91 pounds per acre from last month’s projection, but down nearly 2 percent from last year’s record.  Area harvested is unchanged at 3.03 million acres.  Long-grain production is forecast at 169.3 million cwt and combined medium- and short-grain production at 59.5 million, up 0.3 million and 2.5 million from a month ago, respectively.  The all rice import projection is 21.0 million cwt, down 9 percent from last year.

U.S. 2014/15 total rice use is projected at 243.0 million cwt, 3.0 million above last month, and 12 percent above the previous year.  Total domestic and residual use and exports are forecast at 134.0 million cwt and 109.0 million, up 1.0 million and 2.0 million, respectively.  Long-grain and combined medium- and short-grain exports are projected at 75.0 million and 34.0 million, respectively.  U.S. all rice ending stocks for 2014/15 are projected at 39.6 million cwt, down 0.2 million from last month, but 21 percent above the previous year. 

The 2014/15 U.S. long-grain rice season-average farm price is projected at $12.00 to $13.00 per cwt, unchanged from last month.  The 2014/15 combined medium- and short-grain price is projected at $17.50 to $18.50 per cwt, up 50 cents per cwt from a month ago.  The 2014/15 all rice price is projected at $13.80 to $14.80 per cwt, up 30 cents per cwt on each end of the range from last month.

The projected decrease in global 2014/15 total supply is greater than the drop in total use resulting in a decrease in world ending stocks.  Global production is lowered 2.1 million tons to 477.3 million, still a record, due primarily to forecast reductions for Bangladesh, Brazil, Indonesia, and India, offset partially by an increase in the United States.  India’s 2014/15 rice crop is lowered 1.0 million tons to 103.0 million, attributed mostly to a slower rate of planting of the kharif rice crop due to the late start of the monsoon and below normal precipitation in some rice growing areas.  Global beginning stocks for 2014/15 are lowered 1.4 million tons due mostly to a 1.3-million-ton reduction for Indonesia—where the 2013/14 crop is lowered to 36.0 million tons.  World 2014/15 consumption is reduced 0.3 million tons to 482.1 million, still a record.  Global trade is lowered 0.3 million tons due mostly to a reduction in exports from India, partially offset by an increase in the United States.  Global 2014/15 ending stocks are projected at 105.4 million tons, down 3.2 million from last month, and a decline of 4.7 million from the previous year.  The largest stocks reductions from a month ago are in Bangladesh, Brazil, Indonesia, and India. 


 


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

 


The markets covered daily are 2013 & 2014 Soybeans and Corn.

 


My numbers are sent before the night session begins. (via your email)

 

Find out why many of my subscribers keep renewing this service for years. 
 
Howard Tyllas Daily Numbers and Hedge Ideas is designed to help you plan your hedging strategies, and speculators for day or longer term trading.

 

 

 

 $299.00 USD for each month, renewable monthly

 

Howard Tyllas Daily Numbers and Hedge Ideas $299.00 monthly

 

 

 

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

Hedging November Soybean and Commentary for 8/11/14

Aug 12, 2014

 

 

Sign up: Learn a better way to hedge for free

 
Attention Corn & Soybean Producers:

Feel free to inquire on learning about the best way to hedge. In my opinion my strategy is the best I have seen since I became a member in 1976 trading corn and soybeans for my own account.


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 40 years. 

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

 These numbers were sent on 8/8/14 at 3.00 pm to be used for trading on Monday 8/11/14.

 November Soybeans

 Use the same numbers as used on 8/7 & 8/14
                    
10.98 ¼         
10.94 
--------------10.82    Pivot  
10.70                                           
10.59 ½                                        
5 day chart...         Up from last week same day                                                                            
Daily chart   ….     Down   
Weekly chart …   Down   
Monthly chart ….Down                  11.66 is the 200 DMA
ATR 20 ¾                                                 Balanced 48%

 

 

For 8/11/14: I continue to say "10.88 ¼ bracket line is pivotal on Monday, 2014 low at $10.54 is support.   

In my daily November soybean numbers on Friday; my pivot acted as resistance and was .03 from the actual high; my support was .01 ¾ from the actual low.     

 

All thoughts in this article are of my opinion, and you can have your opinion, but it is my intention for producers to rethink what they are doing, and consider becoming self directed. I do not care what service you use, make sure you are learning a better way to hedge than you are doing now.                
                                    

8/11/14:

Grains: Corn closed just off the contract low but still higher for the week. Soybeans gained $.26 ¼ for the week, buoyed by the August contract which gained $.34 ¾ on Friday alone, and up $.69 ¾ for the week. Dueling forecasts latest winner is the calling for much dryer and warmer temperatures in the 10 to 15 day forecast, just enough to keep the bulls "hope" alive. If corn keeps going down, it will weigh heavily on soybeans. Report on Tuesday is just as important as what the weather forecasts look like on that day. Fundamentals and final crop production will not be known until the grain is in the bin, but perception and market sentiment will swing the pendulum for now. Whatever happens on Monday will be meaningless on Tuesday after the report comes out.   

It is easy for me as a trader to assume risk when I want to, but producers who are truly looking to reduce the gamble and more concerned with assuring some income, are also assuming the risk they want to. But the unhedged or any part thereof, is their gamble and does have significant risk, as the unhedged are finding out again. Months ago I said was really concerned not only about 2015, but 2016 too, and knowing if I were a farmer I would be hedging as far out as I could especially if the price is profitable. I might not get what I want, but I will get what I need. When a shortfall is apparent that would change the supply, I can change my hedge to reflect it. I know it is not easy to hedge at these prices, but I say it is much harder not to.

Nobody knows what the market will do this week let alone by harvest, but knowing how surplus markets act, I have strong feelings that we will be lower than here at harvest. How low depends on how large the crop comes in. I see no reason at harvest to be higher than where we are now. At these price levels we have a long way to go before we see a bottom. Corn charts look terrible, soybeans look like there are still bulls fighting the fight, but the direction is still down.

Monday I do not expect too much to happen, but Tuesday anything can happen. The report can send prices one way, and by the end of the day it can finish the other way. Do not take anything for granted. I just trade the numbers, the report does not have anything to do with how I trade, I do not trade the report, I trade the charts and the numbers I get from them.

This report can be volatile, and unless it is near the average trade estimates, we can move significantly. Corn spreads that are $.02 ½ or less from full value will lose greatly if we rally $.30, and larger spreads like a $.80 put spread will lose greatly. Yes, we want every penny we can get from these hedges, and unless the market is above... Subscribe now!

Obviously nobody thought prices could get below $4 this year, because nobody thought we would get ideal conditions this far either. Give me 80% of the first $.50 down from the original $5.60 hedge and then it was every bear for himself. If I got half of what the market went down from $5.10 until here because my protection ran out, I would be more than happy if I was a bull and got paid for being wrong, or I am going to get the rest with the crop insurance I have. Any scenario including just getting $.40 of a $.50 hedge and did nothing else, I would at least have something to say I am glad I did right.    

Have you looked at your past thoughts lately as you had written down in your journal or notes to keep yourself real? You must ask yourself what you will do if 1 year from today if we trade $2.90 or $5.90. You must have a plan all the way up, or all the way down. Live in the now, but you MUST plan for the future, I have always lived my life this way, and of course reflected in my trading approach, same as I look at what I made not what I left on the table, half full or half empty, and will always be half full to me. Just like being unhedged, whatever I left on the table or what I would not sell/hedge had risk attached to it, and when I ended my trade I ended my risk and so what was left on the table was not just the profit, but the risk I would have taken to have gotten it.

I see why having a hedge protection cheaply and leaving $.50 upside unscathed is not good enough, or $.80 up in soybeans like we do, it is because the unhedged are no different than the 99 out of 100 traders, who do not exit losing trades because they are more worried that the market will turn around and they would make "all this money" instead of worrying about losing more money in a losing trade. $1 down and then $2, and they worry about it going higher? Let me try to say it this way, if you produce $500,000, $5,000,000, or more than $50,000,000 worth of grains when at prices seen in May, how much did you lose? Now take that money lost and tell your wife you lost it in Las Vegas, or that the amount you just lost was lost on the Superbowl, what would she say, or what would you say "it is part of the business" and was lost due to the price of grains going down, really? She does not know you could have hedged, she does not know that a part of farming is betting it all on the Superbowl, or the stock market, or the grain market? I rest my case your honor.

These are my opinions and you or those services can think differently, I feel strongly about the things I say, and if you wonder how you botched marketing this year, look at all the people and services around you and ask yourself if they did any better. If you have a service that you are happy with the last 2 years as the market has come down, continue using that service. If not, you should think about and consider being self directed. Use any service that helps you in the pursuit of being self directed, so you can reflect the risks you want to take, and the rewards you are happy to live with. When services act like without them you are powerless, you should know you are in trouble already. Knowledge will empower you, not the knowledge of how to form the best guess about the fundamentals, but how to get hedge protection cheaply and allow for some upside too. Maybe you do not think the market can get high enough like the service is looking for, why should you follow their bullish thoughts. Take their opinion into consideration, but always do what is right for you. Some want more of a gamble, and some want little gamble at all, so how can they both listen to the service that is "one size fits all"? I am posting this article and the last 2 paragraphs are more for unhedged producers to think about.

Options premiums (prices paid for the strike) should come down after the report is out, and would take a move of twice the ATR to keep the premium in there, so if we have a normal range we will see premiums really decline. Time and crop problems are reduced every day, and every day we are closer to harvest.

I still say "I want to sell rallies today at resistance much more than buying support numbers today, but would trade without bias and risk $.03 in corn and $.05 in soybeans using a stop to protect any idea". That will be my idea for report day too. I have the same chart parameters going into and after the report as before. 

                    
8/8/14:

Grains: November soybeans have closed only 4 times above the bracket line at $10.88 ¼ in the last 4 weeks. Any rally up to there should be sold or hedged before the report on Tuesday. I want to have known risk option bear strategies or be well hedged going into the report, I do not want to have futures on before the report, have no problem day trading futures once the report is out. I could care less what the report says, I am only concerned with how the market reacts to it. Report or no report I trade the charts. Knowing there is a report has always been a "red flag" for futures contracts, but I have no problem using known risk strategies and the odds already in my favor. I will say that soybeans do not look bad, and they are up $.19 ½ for the week. On the other hand they do not look good above $10.88 ¼, and I remind you the parameters I gave you with $11.18 ¾ resistance, $10.55 (now $10.54 contract low) support, and the pivot of those two numbers is $10.87. I said we would trade sideways until the report inside those parameters, and we rotated twice up and down for $.62 or more. If you could take $.25 of each $.60 move up and down, you would make $1 instead of $.62 selling the high and buying the low or looking for more. I want to hedge or improve hedges wherever possible going into the report, and that includes reducing any 2014 call above $12.20, they will no longer do you any good unless we can rally $.60, but will not help you until we get "up there".

Read comments for Monday until now, last Friday we closed in "the hole" with no way of knowing how we would open Sunday night, but not only did I have a plan for the upside on Monday, I had a plan for the week no matter if the market went up or down or both ways more than once. I wanted to "buy" or reduce my upside, and both corn and soybeans still have nice gains for the week.

It is a silly game to bet, with everything unknown, assumed, and can change on any given morning when the weather could change dramatically. We could have much more or less than guesses today, but nobody knows what the reality will be about true production numbers. What is worse, we might have already priced in what is guessed, or the price at harvest based upon expectations, or we could be way off in what the price will be. In October when we can get a better handle with what is out there, only the "old lady" will tell you after the fact what you should do TODAY. So go look into the mirror and ask her to tell you what you should do now. Whatever she said you should do today, DO IT! Always do what is right for you, and make sure that you do not risk too much on any idea such as hedge or improve one.

Days are getting shorter, nights are longer, and temperatures are ideal for a big crop. Rainfall could not have been better for more than half the crop, and only certain areas are crying rain. US grain production has never been in a greenhouse, but this year is one of those years that it looks like it is. Wherever the shortfall, other areas will more than make up for it. Cliché’s get to be cliché’s because there is a lot of truth in the statement. "Big crops get bigger" was around long before I was born, because there is some truth to it. No matter what the crop size is, the next factor the market will need to discover is price, the price that is in balance with supply and demand. Knowing the crop size is one thing, knowing what "fair value" is for that crop is another.  

Some of the downfalls of services and analysts have many things in common, the main thing is that none of them could trade their way out of a paper bag if their life depended on it. They can talk the talk, but not only can they not walk; they have not learned to crawl yet. The first things you have learned from me are, know and control your risks at all times, and never risk more than you are willing to make. I am a simple man and it made sense to me to know what I am doing before I started to trade. It does not take a genius to know that if you lose all your money, you will not be able to continue to trade (or farm). I did not learn from the people who were successful, I learned from the losers, and what did they all have in common, they lost too much money. Making money was not the problem, losing money was. So as a person who is learning what does not work, I am learning what does work or should I say what I need to avoid.

These analysts, brokers, hedge services, let alone producers, should know what I knew before I bought a seat, risk control, and they are nowhere near competent to have a valid mindset to approach trading or hedging. I have taught you to think what you want, but have lines in the sand on EVERYTHING you do, THEY broke my kindergarten rule and now have placed many a farm and trading account in jeopardy. Do not forget "do not sell it below $5.50 and just sell it in 2014"! Do not forget those looking to sell or hedge $1 higher and have lost $2 trying to do so. They are not traders, THINK what you want, but be prepared for reality. Never again will you be anyone’s victim, except if you ignore what you have learned and become your own victim. From what I have seen the last 6 years, I would take advice from most of my producers, but do not want to even listen to anyone who has not been completely hedged 2014 above $5.10. 

Year after year you see I need no reason to sell or capture what I can on rallies, or buy or capture what I can on breaks. I can stay in a trend for almost 2 years and counting, and I could take swing trades against the trend or reduce or improve my position/hedge at the same time when opportunities present it. This is what I reinforce when the market is quiet, things that improve your mindset so you can accept the things that will help you, but does not seem comfortable since it is against your herd mentality that you were running with in the past. You never read or at least I have not seen too much of, anything from anyone that can truly teach you something new that can actually help you in your pursuit of successful hedging or trading, so they mostly talk about fundamentals that can easily be disputed with just another "guess".

These are my opinion, and reasons for you to become self directed, and needing no other information than what you can find in a chart, and the knowledge you have learned to implement and use as a hedging strategy no matter bull or bear market. From what I have seen "out there" the last few years, you would need to try very hard in order to do worse than the "guru’s" have. Just like you learned from your parents growing up, learn how to be self reliant, take responsibility for what you do, and improve in time from the wisdom you get from your experiences. I have 38 years as a member, 3 years prior experience on the trading floor, and I can see how the 38 year olds in these companies might have more to learn, but you would think that the people who "run" these services would have the knowledge and oversight to at least be 100% hedged long ago. Corn can go to $2.90 and they go home and ask "what’s for dinner", and those who listened to them might be wondering if they have a home to go home to after harvest. Shameful! Hedge means to take risk off the table, ask yourself, how well are they doing, and can you do better yourself?

Nothing has changed in the market as far as the charts and I am concerned. I have always said I hate to buy a quiet market, but things do get quiet before a major report, and this one is major. The problem is, they are not factual and are based on best guesses, and then of course the "guru’s" get to second guess the USDA guesses. And you think that I want to bet on that?

You have today, Monday, and Tuesday morning to adjust your positions/hedges. Do what is right for you, reduce the upside exposure as cheaply as possible, and sit back and watch the "game" begin at 11am Tuesday.

I still say "I want to sell rallies today at resistance much more than buying support numbers today, but would trade without bias and risk $.03 in corn and $.05 in soybeans using a stop to protect any idea".
  

 


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


The markets covered daily are 2014 & 2015 Soybeans and Corn.


My numbers are sent before the night session begins. (via your email)

Find out why many of my subscribers keep renewing this service for years. 
 
Howard Tyllas Daily Numbers and Hedge Ideas is designed to help you plan your hedging strategies, and speculators for day or longer term trading.

 

 $299.00 USD for each month, renewable monthly

Howard Tyllas Daily Numbers and Hedge Ideas $299.00 monthly

 

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

Log In or Sign Up to comment

COMMENTS

Receive the latest news, information and commentary customized for you. Sign up to receive Dairy Today's eUpdate today!

 
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions