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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.

January Soybean & march corn Daily numbers & Trade ideas for 12/17/10

Dec 20, 2010

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This report was sent to subscribers on 12/16/10 5:00 p.m. Chicago time to be used for trading on 12/17/10. Everything is done by Howard Tyllas, no program or black box.

Results for 12/17/10:

My soybean resistance was .03 ¾ from the actual low, and my support was .04 ½ from the actual high.

My corn resistance was .01 from the actual low, and my support was .00 ¾ from the actual high.

My nat gas resistance was .031 the actual low and my support was .013 from the actual high.

My crude oil resistance was .29 the actual low, and my support was .28 from the actual high.

My bonds resistance was 3 from the actual low, and my support was 10 from the actual high.

 My gold resistance was 5.40 the actual low and my support was 3.80 from the actual high.

My S&P resistance was 1.25 from the actual low and my support was .50 from the actual high.

January Soybeans

After the close recap on 12/17/10: My resistance was 13.03 3/4, .03 3/4 from the actual high, and my support was 12.79, .04 1/2 from the actual low.

March Corn 

After the close recap on 12/17/10: My resistance was 6.00, .01 from the actual high, and my pivot acted as support and was 5.86 1/4, .00 3/4 from the actual low.

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January Soybeans

13.14 ¾       

13.03 ¾          

--------------12.91 ½        Pivot

12.79

12.73 ¼  

  

Trend                

5 day chart...       Up       from last week same day                                                

Daily chart   ....  Up                     

Weekly chart ... Up                

Monthly chart    Up        $10.45 is the 200 DMA

ATR 27 ¾                         Balanced 55%  

Bean 12 17 10

I continue to say "Bracket line at $12.91 is pivotal now, and the bracket line (not shown) is key support coupled with the uptrend line at $12.41. High of November is the only resistance above $13.07".          

January Soybeans for 12/17/10

I said "Bulls remain in control as long as the new uptrend line holds which is near $12.41 this week". 

In my daily soybean numbers on Thursday; my resistance was .11 from the actual high; my pivot acted as support and was .08 ¾ from the actual low.  In open outcry the pivot was .04 ¼ from the actual high, and the pivot was .06 ¾ from the actual low, this tells me the market is looking for direction.)

March Corn 

6.00                                      Resistance

5.94 ½

------------- 5.86 ¼          Pivot

5.78                            

5.69                     

       Use the same numbers as used on 12/16/10

Trend          

5 day chart........       Up from last week same day                                                                                                                                                   

Daily chart   ......     Up                       

Weekly chart .......  Up             

Monthly chart ....    Up 4.57 is the 200 day ma

ATR 15                      Overbought 83%    

 Corn 12 17 10

I continue to say "Uptrend lines have held perfectly except for the day they made the low at $5.06 ¼ when the market jabbed below it briefly. Bulls are ready to take back control of the market if they can close above the top uptrend line that now acts as resistance". These lines that were started months ago are not random as you can see for yourself. 

March Corn for 12/17/10

In my daily corn numbers on Thursday; my resistance was .04 ½ from the actual high, and my support was .03 ½ from the actual low. 

12/17/10:

Grains: Spot on corn support and accurate resistance.  Soybean numbers were only helpful at best, but in open outcry they were spot on (less than the stop risk of $.07). Holiday trade is getting sloppy and choppy, and marking time until year end. Fundamentals are bullish as is the charts, and I cannot see why the bears would want to be short except for a day or swing trade. No matter long or short a trader needs to always be aware that the market can and will do anything, and at all times you should have a risk reward that makes sense. Keep in mind 2008, and even more recently was the $1.70+ break in soybeans and $.95 break in corn after a bullish report for soybeans.

The biggest bullish factor for me is the USDA keeping the ethanol usage to 4.8 billion bushels, while weekly and monthly grind figures are pointing to 5.3 billion. Of course as the price of corn moves higher, the exports and usage goes down, and this is where the January Final report will be helpful to estimate what the final carryover (of stocks) will be. I expect they will take off 200 million bushels or so, and I believe for now, that is the strongest fundamental that is underpinning corn, which underpins soybeans at the same time. The Senate approved the $.45 tax credit extension for 1 year, not it goes to vote in the House.

Exports for corn picked up this week which is normal for the year end. China again raised its forecast for their corn crop in the ground by 3.5 MMT to 172.5, compared to last year at 164 or the year before at 166. They said that reflects a surplus of 7.5 MMT over their consumption. US prices are about $1.25 above the price in China, and I do not expect any major buying program from them in the near future.  

Exports for soybeans were a mere 3 million bushels (MB) while the market was looking for 22 to 33, and this could have pressured the market early in the open outcry session, but fundamentals like that never last long before the market reverts back to price and time, and buyers took the opportunity and bought soybeans and pushed back over $13 on the same day. Fundamental of the last bullish report took a few days before that was just another fact that succumbed to profit taking and chart resistance. What are impressive to me were the facts of poor exports this latest week, rain in SA, but still had the ability to hang around $13. The tight balance sheet is not going away for now, and the bulls in both markets are comfortable remaining long and waiting for the next bullish news such as trouble with the SA crop, or when we get closer to our planting with an adverse weather forecast. Almost every year we get a weather scare that will rally grains even though in most years in the end, it never materialized.

I want to trade without bias today and risk $.04 in corn and $.07 in soybeans on any trade idea using the numbers, and having a stop to protect from further losses if the number does not hold.

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

The 8 markets now covered daily are Soybeans, Corn, Crude oil, S&P, 30 yr TBond, Gold, and Nat gas

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Feel free to email with any comments or question you:  www.howardtyllas@howardtyllas.com

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           May Your Next Trade Be The Best                          

                     Howard Tyllas            

   BT

Disclaimer:     No guarantee of any kind is implied or possible where projections of future conditions are attempted. 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.

 

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