The Ted Spread
Ted is the Chief Market Strategist and Vice President in charge of the Zaner Ag Hedge Group and specializes in agricultural hedging employing various strategies using futures, futures spreads, outright options and option combinations. He believes it is paramount to be able to use different strategies to adapt to market conditions. Ted works with large to mid size grain and livestock producers and end users in North, Central and South America.
New-Crop Soybeans Post a New High Close!
May 01, 2012
TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.
New Crop Soybeans Post a New High Close!
November soybeans were able to post an 11½¢ gain today despite widespread pressure in grains as well as old-crop beans. The May soybean contract has been experiencing higher than expected deliveries, suggesting that near-term price rationing may not be necessary for now. However, new-crop soybeans have begun to take on a life of their own as concerns over next year's balance sheet continue. Huge corn acreage, as well as a record pace in planting, suggest that we could be looking at very tight ending stocks for the 2012-2013 marketing year.
The record planting pace could dissuade producers from switching many acres back to soybeans, as there is still ample time to plant corn. However, it does seem that price action in the last few weeks may have bought some soybean acres, and producers are looking to double-crop soybeans wherever possible. If the November soybean contract is going to embark on a new leg higher, it could produce another 50¢ to 70¢ upside potential, but it would need to happen in the next few trading days. November beans have tested the $14.00 level four times since the previous high close on April 2, and another failure at $14.00 could bring in massive technical selling. This situation will need to be monitored closely in the next few days.
See November Soybean Daily chart:
This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be interested in some of the strategies that I am currently using.
To my mind, there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.
Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.
Ted Seifried (312) 277-0113 or firstname.lastname@example.org
Please check out my Blog at: http://tedseifriedfutures.com/
Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?rid=Seifried
Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.
FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURES PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION.