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The Grain Report

This is Tim Hannagan it's Friday, April 11. Our first crop condition report of the year for wheat came out this week and will come out each Monday at 3 PM central time. This report is leaned on heavily by large traders to determine whether the crop is getting better or worse on yields. This first report showed 35% of the crops in the Western wheat states are in good to excellent condition, down 1% from 36% a year ago. A good crop rating is  65%. When this crop went dormant the last crop condition report November 24, 2013 showed 62% in good to excellent condition. The 27 percentage point drop was the largest ever over a winter period and the worst for this time of year in the last 12 years. Two main reasons were the drought and the polar vortex. This winter subzero temperatures were consistent and often and caused a lot of stress and winter kill in the young wheat seedlings lying dormant. Key states to follow are number one wheat producing state Kansas, then Texas, Nebraska, and Colorado. The key to trading now is to follow one weather report at a time one week at a time. The current forecast by WXRISK.com the AG weather site sees rain falling on the eastern side of those major states we just noted. Should this system track farther east over the weekend taking the rain out of the western wheat belt, look for a higher open Sunday night but should the system hold as projected, followed by another rain system, with even more rain called for the following Thursday and Friday we should expect May wheat to break 6.52 support and test 6.44 major support before short covering or profit-taking starts. This first-rain system begins Saturday, Sunday, and Monday and then a second system starting next Thursday and Friday. Although the rain is bearish for wheat, it's brings light support to corn, as  the rain being forecast across the Midwest and the cold temperatures, look to delay fieldwork being done in the Midwest and planting being done in the southern Delta. We don't expect a big corn rally off the forecast but we do expect corn to hold its support at 4.94. Beans of course are planted later so it’s  not as concerned about planting delays at this point but more concerned about the softening demand with Brazil  noting that China has canceled more beans shipments which may be re-purchased by the US to make up for some of our shortfall on ending stocks. Technical’s read like this. May wheat resistance is 6.68 then 680 with support at 6.52 and 6.44. May soybean support is 14.55 then 14.20 with resistance at 15.15. May corn resistance is 5.14 support 4.94 then 4.88.

For those interested I hold a weekly grain webinar each Thursday at 3pm. I cover everything related and pertinent to the grain market in detail. It is free for anyone who wants to sign up and link for sign up is below. If you cannot attend live a recording will be sent to your email upon signup.

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DAN BURKE'S DAILY OPTION RUN 10/02/13

Oct 02, 2013

DAN BURKE'S DAILY OPTION RUN 10/02/13

GRAINS                                

MACRO OUTLOOK:  For grains, the day was steady with no surprises.  However, grain traders are heading into harvest with eyes fixed on nov beans.  The nov beans found resistance at 1280.  Support can be found at 1260 and 1220 respectively.  Dec corn followed through to the downside after Monday’s settle through 446.  The next support should be found at 422.  I am neutral if we get a settle above 446.  The dec wheat is up on a very bullish chart.  I am bullish.  The support can be found at 680.  I find comfort in getting long and leaning on the 664 level of support. Please keep in mind, while looking below, that commissions and fees are not included in the cost of the option.

SOYBEAN HEDGE OPPORTUNITIES

PRODUCERS

NOV '13

DEC13

MAR14

MAY14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

1250P

21.1

1056.25

1260P

34.1

1706.25

1220P

45.2

2262.50

1200P

52.2

2612.5

1240P

17.5

881.25

1250P

29.5

1481.25

 

 

 

 

 

 

1200P

8.4

425.0

1240P

25.5

1281.25

 

 

 

 

 

 

END USERS

NOV'13

DEC '13

MAR '14

MAY '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

1350C

5.4

275.0

1370C

9.7

393.75

1540C

5.4

275.0

1600C

4.7

243.75

1360C

4.4

225.0

1400C

6.4

325.0

 

 

 

 

 

 

1400C

2.1

106.25

1450C

3.3

168.75

 

 

 

 

 

 

 

CORN HEDGE OPPORTUNITIES

PRODUCERS

NOV'13

DEC '13

MAR’14

MAY’14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

430P

6.2

312.5

440P

15.4

775.0

410P

8.4

425.0

400P

8.3

418.75

420P

3.3

168.75

430P

10.5

531.25

 

 

 

 

 

 

400P

1.0

50.0

400P

3.0

150.0

 

 

 

 

 

 

END USERS

NOV '13

DEC '13

MAR '14

MAY '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

450C

5.4

275.0

470C

5.0

250.0

550C

3.1

156.25

570C

5.0

250.0

460C

2.7

143.75

490C

2.4

125.0

 

 

 

 

 

 

470C

1.5

81.25

500C

1.6

87.50

 

 

 

 

 

 

 

WHEAT HEDGE OPPORTUNITIES

PRODUCERS

NOV '13

DEC '13

MAR '14

MAY '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

655P

5.0

250.0

650P

9.1

456.25

580P

3.3

168.75

550P

3.1

156.25

630P

1.1

56.25

640P

6.4

325.0

 

 

 

 

 

 

 

 

 

630P

4.3

218.75

 

 

 

 

 

 

END USERS

NOV '13

DEC '13

MAR '14

MAY '14

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

STRIKE

PRICE

COST

690C

11.7

593.75

690C

19.1

956.25

770C

14.5

731.25

820C

12.6

637.50

700C

8.6

437.5

700C

15.4

775.0

 

 

 

 

 

 

710C

6.3

318.75

720C

10.3

518.75

 

 

 

 

 

 

RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING.  THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT.  WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.

Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The views and opinions expressed in this letter are those of the author and do not reflect the views of Walsh Trading Inc. or its staff.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Walsh Trading Inc. Copyright © Walsh Trading Inc.

In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Support refers to an area on a chart where buy orders may be clustered. Resistance is an area where there may be sell orders.  Fibonacci retracement is named after a 12th century Italian mathematician and based on the theory that prices rise or fall by predictable amounts after reaching a high or low.

For more market information, Dan can be reached at 312.957.8248 or via e-mail at dburke@walshtrading.com.

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