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October 2010 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.

December Cattle Daily Numbers & Trade Ideas for 10/26/10

Oct 26, 2010

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This report was sent to subscribers on 10/25/10 5:30 p.m. Chicago time to be used for trading on 10/26/10. Everything is done by Howard Tyllas, no program or black box.

December Cattle

After the close recap on 10/26/10: My pivot acted as resistance and was 100.80, .12 from the actual high, and my support was 100.05, and was the EXACT actual low

Subscribe now! Do yourself a favor and get your numbers after the market is closed to be used for the next session trading. Ask yourself how much would it have been worth to read my comments and get my numbers 14 hours before today's open outcry?

All charts and numbers for 10/27/10 have already been sent to subscribers at 6:15 pm

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

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102.30

101.55      

------------100.80      Pivot 

100.05                                   

  

        Use the same numbers as used on 10/25/10

Trend            

5 day chart.......      Down    (last week same day)                                                          

Daily chart   ......   Up                      

Weekly chart .......Up                  

Monthly chart....    Up      95.67 is the 200 day MA         

ATR 1.20                           Balanced 59%

cat 10 26 10

I still say "Resistance at the 102.65 high, daily numbers support".

December Cattle (elec.) for 10/26/10:

This is another market made a new high for the run on Thursday and closed lower which bodes well for another down day to follow.

In my daily cattle numbers on Monday; my pivot acted as resistance and was the EXACT actual high, my support was .15 from the actual

Cattle: Exact high and spot on support number. Idea to take the sell signal was also spot on! Today I would trade without bias and risk .35 on any trade idea.

New Subscribers: Keep in mind that these are day trading numbers. They are equally to be used for swing trading and longer term trading time frames on the day I want to enter or exit my position. The charts are to be used for overall trade location looking for areas of price discovery of support and resistance levels. When the market does go to the charts longer term support or resistance levels such as bracket lines or longer term trend lines, I use my numbers on that day to enter or exit my position. The numbers do not tell you what to do, you are in control of that, but they will give you a framework to try and buy or sell at the best price for that day. For me it gives me a strategy and the best way I have found to discover the best price for entering or exiting my trade ideas.

If I have the exact numbers for the actual high and low of the day 12 hours in advance, the question has always been, how do I trade it? That is what I best describe in my numbers explanation. Any intuitiveness or nuances I trade, I would keep a journal to see if it is worthwhile overriding my plan. I rarely go against my explanation

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

The 9 markets now covered daily are Soybeans, Corn, Crude oil, S&P, Euro FX, 30 yr TBond, Gold, and Nat gas Cattle.

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 9 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

HowardTyllas Daily Numbers & Trade Ideas $ 199.00

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

www.farmerhedge.com 

www.howardtyllas.com          

www.futuresflight.com 

 

           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.

 

 

 

December Cattle Daily Numbers & Trade Ideas for 10/25/10

Oct 25, 2010

top1

This report was sent to subscribers on 10/22/10 11:30 p.m. Chicago time to be used for trading on 10/25/10. Everything is done by Howard Tyllas, no program or black box.

December Cattle

After the close recap on 10/25/10: My pivot acted as resistance and was 101.55, the EXACT actual high, and my support was 100.05, just .15 from the actual low.

All Results for 10/25/10 were:

Soybeans: My resistance was the EXACT actual high; my support was .02 1/2 from the actual low.

Corn:    My resistance was .04 from the actual high; my support was .01 from the actual low. 

Crude Oil: My resistance was .58 from the actual high; my support was .21 from the actual low.

Nat Gas: My resistance was .006 from the actual high; my support was .002 from the actual low.

S&P:    My resistance was .75 (3 ticks) from the actual high; my support was .75 from the actual low. 

Gold:     My resistance was $0.10 from the actual high; my support was $1.70 from the actual low. 

Euro:    My resistance was .16 from the actual high; my support was .09 from the actual low. 

Bonds: My resistance was 4 from the actual high; my support was 2 from the actual low. 

Cattle:  My resistance was the EXACT actual high; my support was .15 from the actual low. 

Subscribe now! Do yourself a favor and get your numbers after the market is closed to be used for the next session trading. Ask yourself how much would it have been worth to read my comments and get my numbers 14 hours before today's open outcry?

All charts and numbers for 10/25/10 have already been sent to subscribers at 5:20 pm. 

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

 Sign Up for Learn a better way to hedge for farmers

102.65

102.30

------------101.55      Pivot 

100.80                                   

100.05                                   

          Use the same numbers as used on 10/22/10

Trend           

5 day chart.......      Up    (last week same day)                                                          

Daily chart   ......   Up                      

Weekly chart .......Up                  

Monthly chart....    Up      95.57 is the 200 day MA         

ATR 1.32                           Overbought 85%

cat 10 25 10

Resistance at the 102.65 high, daily numbers support.

December Cattle (elec.) for 10/25/10:

This is another market made a new high for the run on Thursday and closed lower which bodes well for another down day to follow.

In my daily cattle numbers on Friday; my  resistance was .42 from the actual high, my support was .27 from the actual low.

Cattle: Accurate support and helpful resistance. Bull chart back to the resistance. Above there the next chart weekly resistance is 104.17 and then 107.05, both posted in September 2008. I want to take the sell signal and risk .35 on the trade idea.    

New Subscribers: Keep in mind that these are day trading numbers. They are equally to be used for swing trading and longer term trading time frames on the day I want to enter or exit my position. The charts are to be used for overall trade location looking for areas of price discovery of support and resistance levels. When the market does go to the charts longer term support or resistance levels such as bracket lines or longer term trend lines, I use my numbers on that day to enter or exit my position. The numbers do not tell you what to do, you are in control of that, but they will give you a framework to try and buy or sell at the best price for that day. For me it gives me a strategy and the best way I have found to discover the best price for entering or exiting my trade ideas.

If I have the exact numbers for the actual high and low of the day 12 hours in advance, the question has always been, how do I trade it? That is what I best describe in my numbers explanation. Any intuitiveness or nuances I trade, I would keep a journal to see if it is worthwhile overriding my plan. I rarely go against my explanation

December Cattle (elec.) for 10/22/10:

Cattle: Spot on support and accurate resistance. My idea to take the sell signal at resistance was a good idea. New high for the run and closed lower bodes well for another down day to follow on Friday, even though we are higher as I write. I want to take the sell signal and risk .35 on the trade idea

December Cattle (elec.) for 10/21/10:

Cattle: Spot on numbers. It looks like the market is exhausted after spending all its energy just to fill the gap resistance. I want to be a seller against the high of 102.65 and use a 102.82 buy stop to protect. I want to risk .35 on the trade idea. 

December Cattle (elec.) for 10/20/10:

Cattle:  Spot on support but not helpful resistance number. I said the bulls got the nod. I want to trade without bias and risk .35 on the trade idea.

December Cattle (elec.) for 10/19/10:

Cattle: Spot on resistance and not helpful support off .50. Bulls continue to get the nod but at the same time nearing strong resistance. I would continue to trade without bias and risk .35 on a given trade idea.

December Cattle (elec.) for 10/18/10:

Cattle: Accurate resistance but the support was not in play on this gap higher day. Now we are looking at a strong resistance gap above at 101.95, and a strong gap support at 98.27 below, the pivot of the two (the middle of the two) is 100.10, so I would say flip a coin or give the edge to the bulls because it is a bull chart but nearing and testing its resistance levels. With that in mind I want to day trade using the numbers without bias and risk .40 on any trade idea.

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

The 9 markets now covered daily are Soybeans, Corn, Crude oil, S&P, Euro FX, 30 yr TBond, Gold, and Nat gas Cattle.

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 9 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

HowardTyllas Daily Numbers & Trade Ideas $ 199.00

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

www.farmerhedge.com 

www.howardtyllas.com          

www.futuresflight.com 

 

           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.

 

 

 

Nonember Soybean Daily Numbers & Trade Ideas for 10/19/10

Oct 19, 2010

top1

This report was sent to subscribers on 10/18/10 4:00 p.m. Chicago time to be used for trading on 10/19/10. Everything is done by Howard Tyllas, no program or black box.

November Soybeans

After the close recap on 10/19/10: My resistance was 75.94, .36 from the actual high, and my pivot acted as support and was 73.70, just 0.02 from the actual low

Subscribe now! Do yourself a favor and get your numbers after the market is closed to be used for the next session trading. Ask yourself how much would it have been worth to read my comments and get my numbers 14 hours before today's open outcry?

All charts and numbers for 10/20/10 have already been sent to subscribers at 5:20 pm.

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

 Sign Up for Learn a better way to hedge for farmers

 

12.41 1/4                             

12.04 1/4                      2010 High    

--------------11.88          Pivot

11.72

11.62 3/4

11.52 1/2 FG

Trend       Use the same numbers as used on 11/19/10

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

Daily chart   ....  Up                     

Weekly chart ... Sideways             

Monthly chart    Sideways   $9.71 1/2 is the 200 DMA

ATR 26 3/4         Overbought 85%  

november soybeans 10 20 10

 

I continue to say "Bull chart continues as long as the bracket line holds at $11.65, and key support from the gap at 11.28 1/4. Resistances are now found on the weekly continuation chart".

November Soybeans for 10/19/10:

New high for the run but closed lower which bodes well for another down day to follow. It did not on Thursday. We will see if it works on Monday. It did, but by only $.01.

In my daily soybean numbers on Monday; my resistance was the EXACT actual high; my support was .03 from the actual low. 

Grains: Exact high in soybeans and spot on support, corn numbers were spot on too. When fundamentals are hard to get comfortable with, but you have numbers this good to work with, it makes the task of risking little to gain more than what is risked much easier. It also helps to enter an idea, and not look for more than the numbers offer. The numbers provided perfect and near perfect entries and exits for both bull and bear in both night and open outcry sessions (as in many markets on Monday that I cover). At 11am the market took out my support at $5.54 1/2 and found sell stops but the market never traded for 5 minutes below (low was $5.53). The buy signal to get long was good, or certainly to take a profit if short. 

So where are we going? Using the numbers day by day I do well to figure that out, but in today's world of the fund larger than the market it seems, the question should be how do you figure out what the funds will do?

Trading daily without bias works for me as you can tell, but I could only guess where we will be in 2 days or longer. I would have no problem wanting to buy these bull charts on a correction, but it is the fact we are over $5.50 and near $12 that prevent me from doing so. The only way I could get long here would be to buy a vertical call spread, or a condor or butterfly in or at the money.

$5.28 and $11.65 seem to be solid support for this week, $5.88 and at least the 2010 high in soybeans of $12.04 1/4 is resistance. I can see us trading until Friday's option expiration with soybeans testing their high and corn getting to $5.80 at best, and $5.40 and $11.65 at the least. Night volume has really dropped off tonight.

Lastly, I want you to look at the option settlements for Monday (link on page 5). The winner did not win (the puts) and the loser got killed (the calls). Only the 5.30 calls on down only lost what the futures lost, above there they lost up to 6 7/8. Even the $5.60 put lost $.00 1/4 and it is in the money. This implosion in premium is a statement from the options pit (and trade idea) that the market will not go too much higher or lower from here. That is a problem when it comes to buying put spreads to protect profits, because you want to see the market go higher, or earn what you paid for the put protection if they go down, but sideways action $.20 higher or lower from here does not do you good. Only if you sold call spreads (or put spreads) would be helpful when the market does not move too much.

Trouble is you do not know where we will be, and it comes down to not what corn and soybeans will do, but what you will do to keep profits if the market goes down. Subscribe now ...  is your way of being long by ... This is your decision and I would look at it in dollars and cents and as a business with risk reward to increase profits. Your shareholders (your family) does not want you to bet more than a percentage of income, so figure out what that is and obey that fact. Make sure what you do is right for you, and that does not mean it is right if you make more money, and not if it does not, it is right when you do it. If it is not right, why did you do it? It is not grain you have in the bin, it is money, do whatever is right for you.

I have the same thoughts and trade ideas as yesterday, and want to use the same risk stops.

New Subscribers: Keep in mind that these are day trading numbers. They are equally to be used for swing trading and longer term trading time frames on the day I want to enter or exit my position. The charts are to be used for overall trade location looking for areas of price discovery of support and resistance levels. When the market does go to the charts longer term support or resistance levels such as bracket lines or longer term trend lines, I use my numbers on that day to enter or exit my position. The numbers do not tell you what to do, you are in control of that, but they will give you a framework to try and buy or sell at the best price for that day. For me it gives me a strategy and the best way I have found to discover the best price for entering or exiting my trade ideas.

If I have the exact numbers for the actual high and low of the day 12 hours in advance, the question has always been, how do I trade it? That is what I best describe in my numbers explanation. Any intuitiveness or nuances I trade, I would keep a journal to see if it is worthwhile overriding my plan. I rarely go against my explanation

November Soybeans for 10/18/10:

Grain numbers were helpful at best. I said chances to see $6 had been reduced to 35% on Friday, and

it looks like $5.55 indeed will be seen first. The question is if the market can fill the gap at $5.28 1/4. Most open interest in the November corn options are the $5.60 puts and $5.80 calls, and the market might be content to close somewhere between the two when the options expire this Friday and make them both worthless.

Soybeans made a new high for the run on Friday but closed lower which bodes well for another down day on Monday, but last week that signal did not work in the soybean market, but it did in corn. Both markets deserve a pullback because since the previous Thursday we have rallied $.90 to $5.88 and pulled back $.25. Soybeans rallied $1.39 in the same time period but has pulled back only $.19. When soybeans were making new highs and corn could not get close to their old high, this is a pretty good sign that the near term high is in. Remember it was the corn market that is fundamentally bullish and has led the rally. Now that corn has stalled, the pressure to sell corn could be from the unwinding of long corn/short soybeans and wheat spreads. Also soybeans are cheap when near 2.0 the price of corn, and so since corn is not really going down, soybeans had no place to go but up.    

This is a year like no other I have seen in the 34 years of my grain trading, nearly 450,000 contracts of corn are held by the funds, and at the same time we are producing the 3rd biggest crop on record and we are sitting in the shadow of $6 corn! I know markets can and will do anything (people go broke thinking they cannot do anything and then watch the unimaginable happen) and with that in mind corn and soybeans could make a new high. If (a huge word) the production comes in less than thought now, exports pick up (right now they are going down), and if the funds have the willingness to hold ownership through the S. American growing season into the planting of our 2011 crop.

On the other hand, history questions the sustainability of $6 corn, because I know that high prices have a way of taking care of high prices through demand destruction, and an increase in production due to the profitability in the high price. I would not be surprised if corn and soybean production was less than thought, or more than thought which would not help the bull case. As I have said for months, it all comes down to the funds as far as I am concerned, because if they want to continue to buy, it does not matter what the fundamentals are, the market will go up until they stop buying. And if they want to take profits before year end, I do not think that end users and small speculators can purchase what would be needed to take over what the funds would be selling. They could sell off their position before year end and at a lower price level next year, start to own grains and begin the next cycle up.  

No matter if I knew or did not know the fundamentals I have only my charts for price discovery. In this year of dueling reports, record fund participation, and rarely seen prices, I can best predict what the market will do on the current trade day, but only at key supports or resistances would I want to take a swing trade. With $12 beans and a mild signal that soybeans have a better than 50% chance to see another down day on Monday, I want to use my numbers take the sell signals only in soybeans today and use a buy stop risking $.07 to protect. Corn has posted 3 down days in a row which means momentum is to the downside. Only at $5.54 1/2 if I was aggressive would I buy, but me not being aggressive above $5, I would first attempt to get long near the gap $5.28 1/4. That leaves me with trying to get short longer term near the high at $5.88, or at least I would have a buy stop just above there. Selling between $5.75 and $5.80 would be my entry level, and that risk of $.12 would be to go after a retest of the gap area and cover around $5.35 for a good reward if right. For a day trade I want to take the corn sell signals only on Monday but prefer to sell resistance and risk $.05 on the trade idea.   

Producers: I try and put myself in your shoes and I see it is hard to Subscribe now ... is one way of getting cash and taking advantage of the high price. For some, the basis is so bad that they would rather sell futures and wait for the basis to improve and then just buy back the future and sell the cash. With my option knowledge my producers have already found that they can lock in a futures price by subscribe now ... they have found out that they can actually get their crop back because it rallied through the top strike.  

Now you are faced with a decision to raise your protection or not spend some of the money the market has given you. If we knew the market was going to be here or higher in 6 weeks, we would not do anything. If we knew they were going to be lower and even better at what price, we would know exactly the protection we will need. They would not play the game or run the race if we knew who was going to win, that is why favorites get beat and upsets are made and there are odds of the probability in doing so. So what are your odds right now? How much will you lose if the market goes down to $5.30 or less? If you want to raise your protection to $5.60 ....

Your risk is down to $5.30 or $.30, what is your reward if right? If that dollar amount you feel comfortable losing down to $5.30 if you are wrong, and it should be insignificant or reasonable in relation to your income. If it seems like a big gamble though, then I would suggest going to Las Vegas or any casino where if they see you are a big gambler they will want you to stick around (no matter winner or loser because they know in time they should make money because the odds are in their favor) and give you a room, a drink, show or whatever, but the grain markets do not provide any of that.  

As a trader it is easy, I just want to make money and am only concerned with what I make and the risk I take in getting it, and I am not concerned with what I do not make. Only you can make the decision what is right for you, I am only trying to bring reality of the risk reward in what you are doing at this point in time. Use the options to reflect your thoughts, and I can help you understand how to do that if you ask, and you know I am here for you and willing to take the time.  

Lastly, I want to once again remind you that you are still long your 2011 crop. I believe my producers have been distracted until we got over $5 in December 2011 corn, that they are now realizing with the input costs they have locked in, they are looking at record profits right now, and now more than ever want to lock some of that in. I know many have inquired with me about hedging 2011 corn the last couple of months and I say the same to everyone, unless you have enough money to finish your hedge on this year's crop, do not worry about next year's crop, unless you have the money to do so. On Friday I executed December 2011 corn for $1 protection down at $5.20 for 19 1/4, it settled at $.20 1/8. That gives you an idea of what you can do. The other thing I have been saying is that I would look at it as if I was long both crops, and that when I .... for the 2010 crop, that is the least I could do to protect my overall position.

...  If nothing else I would have a plan on selling a percentage of my crop at a certain price level and at increments as we move higher. Remember you do get your crop back if it continues higher, and you are locking in record profits at these levels. No, you are not selling your crop away, ... Yes, you can figure your maximum margin (and you must) and then you are no longer gambling on what the price of corn will be in the future, but allow yourself more money if the market goes up. The beauty in options are the fact that they exactly reflect YOUR mindset no matter what that is. ...

November Soybeans for 10/15/10:

Grains: Exact and spot on grain numbers. Idea to trade without bias always works well when numbers are spot on. As the ATR increases, and the market trades on both sides of the pivot several times, the market will continue to see choppy action in corn. Soybeans are adjusting to corn, and since corn is not correcting to the downside, it makes sense to see soybeans rally instead.

Soybeans continue to post gains versus corn, and when corn gets to their recent high of $5.88, I expect the high in soybeans will be seen at the same time. Maybe corn can trigger the buy stops, but unless they close above $5.88, the high for this run will have been posted. Soybeans should be at a resistance number when the corn high is posted. Yesterday I thought it was a 50/50 chance to see $6 or higher or $5.55, now I would lower seeing $6 at 35%. We are trading higher tonight with soybeans posting new highs, and corn is now the weak sister being dragged to the dance (the $5.88 recently seen) and not being easy about it.

All in all the charts are bullish and more upside can be seen. The last 2 days the corn market has acted like a moving target and is trading up and down from support to resistance and then back down. I just want to take out some of that movement and not risk much in trying to do so.    

Nothing has changed and the decision on how much and when to protect your longs is entirely up to you, and as long as the market stays firm it is easier to delay. "Things do what they do until they do not do them anymore" and that is the only reason I think they can go higher. Have a plan no matter what it is, and make sure you execute it, that is important.

I want to continue to trade without bias and risk $.05 in corn and $.07 in soybeans today, and use a stop as always when entering your trade idea.

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

The 9 markets now covered daily are Soybeans, Corn, Crude oil, S&P, Euro FX, 30 yr TBond, Gold, and Nat gas Cattle.

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 9 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

HowardTyllas Daily Numbers & Trade Ideas $ 199.00

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

www.farmerhedge.com 

www.howardtyllas.com          

www.futuresflight.com 

 

           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.

 

 

 

November Soybean Daily Numbers & Trade Ideas for 10/14/10

Oct 14, 2010

top1

This report was sent to subscribers on 10/13/10 5:50 p.m. Chicago time to be used for trading on 10/14/10. Everything is done by Howard Tyllas, no program or black box.

November Soybeans

After the close recap on 10/14/10: My resistance was 75.94, .36 from the actual high, and my pivot acted as support and was 73.70, just 0.02 from the actual low

Subscribe now! Do yourself a favor and get your numbers after the market is closed to be used for the next session trading. Ask yourself how much would it have been worth to read my comments and get my numbers 14 hours before today's open outcry?

All charts and numbers for 9/15/10 have already been sent to subscribers at 5:20 pm.

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

 Sign Up for Learn a better way to hedge for farmers

 

12.41 1/4                             

11.94 1/2                             2010 High

--------------11.78 3/4          Pivot

11.62 3/4

11.52 1/2 FG

11.35 FG

Trend                

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

Daily chart   ....  Up                     

Weekly chart ... Sideways             

Monthly chart    Sideways   $9.69 is the 200 DMA

ATR 30 3/4         Overbought 88%  

november soybeans 10 14 10

Bull chart continues as long as the bracket line holds at $11.65, and key support from the gap at 11.28 1/4. Resistances are now found on the weekly continuation chart.

November Soybeans for 10/14/10:

New high for the run but closed lower which bodes well for another down day to follow.

In my daily soybean numbers on Wednesday; my resistance was .05 3/4 from the actual high; my pivot acted as support and was .03 3/4 from the actual low. 

Grains: Spot on soybean numbers, corn numbers were no help but almost perfect if using the 1/2 way rule. Corn was so strong up $.09 overnight, but closed almost $.10 lower in open outcry. Funds sold 15,000 corn and 3,000 soybean contracts. Nothing changed in that time period except the price. The EPA announced the 15% blend of ethanol, but only 1/6th of the cars on our roads can handle the blend (2007 or newer), and if anything that would be considered friendly.

The next report is the November Crop Production, but it will not be until the January report to clear up the feed/residual usage question mark. Back to the charts! The market made new highs for the run which bodes well for another down day to follow, but looking at tonight's action we have seen the soybeans rally from my pivot to the resistance number and stopping there for now. Corn is on their highs as I write up $.08. Like last night they were strong, and maybe today we can follow through this time and make new highs. Trying to even discuss fundamentals is a waste of time, unless discussing the fundamental factor of the funds massive position.

Corn looks to trade between $6.09 and $5.28 until the November report. I would be surprised if the market did breakout higher or lower from those price levels. Knowing my producers are going to make more money if they rally, and I get another commission or two, the upside is what provides us extra income. It is one thing to bet on the upside and if they go up making money is expected, but when we do not think the market can rally and it does, we made money without really betting on it. I like being wrong the market and still make money.

Soybeans look like the $12 strike could be in play when the November soybean options expire, and I have resistance at $12.42, so I think those numbers could be resistance for now, the bracket line acts as support at $11.65 and then the gap at $11.35.  

With those chart numbers being said as the parameters I would be using for longer term trade ideas, I would continue to trade without bias until those longer term numbers come into play for places to enter or exit. I want to continue to day trade and my bias comes from where we are in relation to the longer term numbers. As we get close to a support number my bias becomes a buyer, and when we are near resistance numbers, my bias is to take the sell. I want to risk $.05  in corn and $.08 in soybeans today on any trade idea.        

Bottom line is what the funds will do, and their willingness to stay long, or take profits. The Euro is up 125 tonight and shows the continued weakness in the dollar, and that should be helping all commodities as the dollar is making new lows for 2010.

New Subscribers: Keep in mind that these are day trading numbers. They are equally to be used for swing trading and longer term trading time frames on the day I want to enter or exit my position. The charts are to be used for overall trade location looking for areas of price discovery of support and resistance levels. When the market does go to the charts longer term support or resistance levels such as bracket lines or longer term trend lines, I use my numbers on that day to enter or exit my position. The numbers do not tell you what to do, you are in control of that, but they will give you a framework to try and buy or sell at the best price for that day. For me it gives me a strategy and the best way I have found to discover the best price for entering or exiting my trade ideas.

If I have the exact numbers for the actual high and low of the day 12 hours in advance, the question has always been, how do I trade it? That is what I best describe in my numbers explanation. Any intuitiveness or nuances I trade, I would keep a journal to see if it is worthwhile overriding my plan. I rarely go against my explanation

November Soybeans for 10/13/10:

Grains: Spot on grain numbers. In the first 15 minutes of trade the buy signal was clear trading just above the pivot, and not long after noon we saw the resistance number trade to take profits. Taking the sell at resistance would have stopped me out, or at best scratch the trade on the close. Tonight's session has produced trading on both sides of settlement multiple times, and the volume continues to be much above normal.

Funds bought 25,000 contracts on Tuesday and when the commitment of traders report comes out today it will be interesting to see what their new record long position could be. End user buying is the other entity that could have picked up the buying pace. I have traded long enough to know that this market is in bull mode and the driving factor is the willingness for the funds to maintain or add to their position. Bull chart was tested early with little chance to get into the gap area let alone fill it. Technically the charts look good, and $6 seems like a target. With that being said, it looks like the risk using a sell stop below $5.55 is more than the $.20 you would make if it gets there ($6). Let's say we can do that, at $6.09 I am looking for a corrective pullback but if they can close above there, the shorts are really going to be in trouble.

It is hard for me to imagine that we can sustain prices above $6 for an extended period of time with the 3rd biggest crop coming in. Bulls as well as my producers will just have to sit back and watch the show, knowing that it is easier to pay 35% of what you make to insure that when the market stops going up, you have locked in what you have protected. If the market continues to rally, profits to speculators and additional income than the original hedge for producers, is an easy task using options and willing to pay for the protection that allows you to go after higher prices without the risk of giving it all back if and when they crash. Also note that for a $5.80 December put costs $.34 1/4 now and equal to 34% for protection down. The alternative to this would be if the market would not have rallied and then you could not have been "protecting" anything and not have earned 65% of whatever this market will provide.

It makes sense to me to trade without bias when the numbers are spot on, and the market is so uncertain about the fundamentals and the ability of them to discover price or derive the sustainability of a higher price. I want to risk $.05 on any corn trade idea, and $.08 trading soybeans.   

November Soybeans for 10/12/10:

Results for 10/12/10 were:

Soybeans: My resistance was .03 from the actual high; my support was .03 1/4 from the actual low.

Corn:    My resistance was .04 1/2 from the actual high; my support was .00 1/2 from the actual low. 

Crude Oil: My resistance was .07 from the actual high; my support was .69 from the actual low.

Nat Gas: My resistance was .034 from the actual high; my support was .031 from the actual low.

S&P:    My resistance was 5.75 from the actual high; my support was .50 from the actual low. 

Gold:     My resistance was $2.80 from the actual high; my support was $0.40 from the actual low. 

Euro:    My resistance was .02 from the actual high; my support was .14 from the actual low. 

Bonds: My resistance was 14 from the actual high; my support was 5 from the actual low. 

Cattle:  My resistance was .10 from the actual high; my support was .05 from the actual low. 

Grains: Numbers were helpful. Market opened limit in the night session and through resistances in open outcry so a day trade was not in order. Corn closing $.27 1/2 higher was down $.10 from Friday's synthetic close. Soybeans were only $.05  above the limit up settlement on Friday, but gained $.17 1/2 on Monday. This spreading between the two crops is probably the result of soybeans keeping pace with corn for acreage, and also because the two are interchangeable to an extent in feed usage. Right now soybeans are just over 2.0 the price of corn and could be considered cheap (1.8, I would consider that an extreme). But even with the reduction in soybean stocks, it is ample going forward. Tight corn stocks provide 1 ingredient to a bull market, demand is the other. I have never seen fundamentals that make no sense to me, and such a wide variance on what everyone thinks production will be. Due to the holiday we will get the crop progress report on Tuesday, and exports on Friday. Harvest is ahead of normal and I cannot wait to see what the condition of the crops are, and how that justifies the shortfall in yield. Lastly, how can soybeans have a record yield but corn is not close? I am getting used to the fact that nothing makes sense, I guess reading about how capitol hill spends our money is enough to prepare me for that.

Tonight the market resumes its strength but now the shorts at least have resistance numbers from the high on Monday to sell against. Bull's have the gap left from Friday's close to underpin the chart more than the resistance resists. A close below the gap turns the chart negative, and new highs will propel the market to test $6. Your guess is as good as mine! I see a continued bull chart that is approaching historic levels. Until the next report I think the funds will continue to defend their position. As far as I am concerned they ARE the market.

Producers: Subscribe now!...... Your bin is going higher while your put spreads are going down in value. Since your upside is open, your account will only need money to fund your put protection as the market goes higher your puts go down in value, and when you feel the need to buy more protection, you need the money to do so. You have the understanding of how you are long your bin and rolling puts up protects what gains have been made. It is not my decision of when and how much protection you should take, that is up to you. Your strategy allows you to stay long until the high has been made and have little margin left to worry about. At the same time you will be protected when the top is in and will not be exposed to the task of managing risk, it is built into the strategy for you already. It takes the emotion out of what will happen if the Market goes straight down for $1.50, or straight up!

I want to remind all of you that not only are you long this crop, you are also long 2011 crop too, until hedged. I looked at the Subscribe now! .... You should have a plan on when you are going to lock in a hedge, and a strategy that reflects your thoughts.

Even though it feels like the market is going higher, and the charts cannot argue with that, but I only want to take the sell signal at resistance using a $.04 buy stop in corn and a $.07 buy stop in soybeans. I would trade a smaller contract size in this contra trend trade at the high of the year.

November Soybeans for 10/11/10:

Grains: Spot on corn numbers, and spot on soybean support but the resistance was not in play since the market opened limit up in open outcry but off only .04 3/4 in the overnight session.

Talk about a surprise, I was again shocked when I read the numbers. This time the USDA took away 496 million bushels off of this year's corn production from their last month's estimate. They did add 258,000 acres to what they believe will be harvested, but with the yield being reduced 6.7 bushel per acre from 162.5 to 155.8, that was the biggest reduction in 31 years. If that comes to be reality, then I will make note that hotter and dryer temperatures (especially at night) in August even with adequate subsoil moisture, had a bigger impact on yield than was thought by the trade, my producers, and myself. This is a pleasant surprise because the bottom line is that this will still be the 3rd largest crop ever produced, and the current price has only been seen for a short period of time in history.

This is an impossible year for me to trade off of the fundamentals with more variables such as feed, and ethanol usage when you figure the higher price of grains and that implication of higher prices cuts off demand. You would think that the USDA would have lowered its feed/residual usage with the higher forecasted prices, but instead they raised it 300 million bushels, go figure? With the possibility of production numbers that could come in even less than what was estimated, and that would cause an even tighter stocks to usage ratio, the upside is still open.

Even if I knew the fundamentals I would still go right to my charts for price discovery of where support and resistances are. This year more than ever we have a fundamental that is getting bigger than the market, the funds!  When they currently have more than twice the carryover of all the corn in the USA, that cannot be ignored. 400,000 contracts is 2 billion bushels, the carryout looks to be 902 million bushels according to the USDA. We are producing 12.644 billion this year (less than 13 billion). Will they take profits before the year end, or roll next month to the March contract, or liquidate some of their position, or buy even more and turn this market into the next wheat market that does not reflect the actual cash prices? End users look stuck and they should be there on any breakdown in price, but small speculators alone will not be enough to take over their position.     

It is rare for producers to have a big crop (3rd largest) and high prices at the same time. The question becomes how do I keep this high price and still have the right to make more? The best and cheapest way is to ... Subscribe now! 

I want all of you to not ignore, no matter speculators or producers, in the grain market or any other market, the markets can and will do anything at anytime, and is like a pendulum that swings from one extreme to the other. In the case of grains this year and not having a clue as to what yields will really be, the market can rally further, but the funds can put an end to it at any time. Eventually the market will get to the top and then the pendulum will swing the other way, and that is the reason if you are a speculator and have been long, or a producer who has his crop back, the Subscribe now! ... is the best and cheapest way to stay long and lock in 2/3 of the profits. I want you to think about 2008 as a perfect example. You could have sold at some time along the way up, but it would have been hard to pick the top, and keep up with the margin money. The corn market went from $7.40 down to $2.90 four months later in November and December. My strategy allows you to capture 65% or more without having to exit before the high is made, and protected without worry when it falls. There is no "what should I do" when the market does crash, because you are doing it (taking protection) while you are making money as they go up.

It is very important to have a strategy and plan and to know what you are doing (or not doing) at all times. I have said before that I do not know what the market will do but I do know what I am going to do. Have a risk reward that makes sense, money management, and not lose more than an insignificant amount if wrong.

You can see by the settlements that corn synthetically was trading around $5.58 but in fact were trading at $5.65 on the close. That is about $.08 from what will be limit up on Monday's open outcry session. It will be interesting to see if the market only opens $.10 higher which would actually be $.27 lower than where they were on Friday's close. They could open limit up on Sunday night and come down, or open higher and then go limit.

The way I look at the market is, If I bought at $5.60, my objective would be the strong resistance at $6.08 3/4, and at that point what would be the risk reward from $6? Bulls at that level seem to be risking more than the money to be made going higher from there. Corn was trading above my first resistance for Monday on Friday's close, so we will see if they open above it. I want to ... Subscribe today! 

Lastly, Friday was a traders dream day. Do you realize that the pits were no different than barking seals looking for a fish to be thrown at them? Floor traders like myself would be yelling "limit bid for em" and if a floor broker would sell a 100 lot to me (not going to happen and I would be lucky to get 10 contracts), I would make $135,000 instantly! For 10 contracts I would make $13,500. How? I told you that synthetically corn was trading at $5.65 in the corn options market, and if a floor broker sold to me at limit up I would have only paid $5.28 1/4, I would have then signaled to my floor broker standing in the option pit to sell the 100 contracts by ... Subscribe now or ask your option broker ... (same as a short futures position) and lock in $5.65. $.27 is $1,350 per contract. Now you know why when I am watching the electronic trade and I see 1 contract to 100 contracts at a time trade at limit up, I shake my head and cannot believe what I see after thousands of contracts are traded. I do not blame the speculator or producer who does not have the option knowledge, but any "broker", elevator, or anyone else that oversees an account, should have the knowledge but apparently many do not. Knowledge is power, but what I take for granted that all should know, I am learning for the most part is not. I am realizing that knowledge is hard to find, but someone looking for commissions is easy to find, and for the most part what they have to offer is an opinion, and you should stay away from the opinion (follow your own) but get close to someone who has answers to your questions and is truly helpful in your pursuit of successful trading (or hedging).

November Soybeans for 10/8/10:

Grains: Spot on soybean numbers and corn support, corn resistance was accurate. The way I look at the fundamentals right now is that no matter what the report says unless it is another surprise, it is how the funds and the rest of the market reacts to it is what I am concerned with. If there is a bullish surprise we would be limit up at this year's recent high, and so selling resistance there is a risky affair and one you might not be able to get out of for a day trade. I would only use a known risk option strategy if selling at limit up (and hopefully sell higher synthetically).    

I want to use the numbers without bias and have stops in to make sure I am not caught in a limit move against me. I want to risk $.05 in corn and $.08 in soybeans. The report comes out at 7:30 my time, 15 minutes after the night session closes. I will send my comments at 9am to you and give an early opening call.

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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.

 

 

World Agricultural Supply and Demand Estimates Report 10/8/10

Oct 08, 2010

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World Agricultural Supply and Demand Estimates Report 10/8/10

Looks like limit up to me in corn, sharply higher for soybeans and wheat.

OILSEEDS:U.S. oilseed production for 2010/11 is projected at 102.8 million tons, down 2 million from last month.  Soybean production is forecast at 3.408 billion bushels, down 75 million based on both lower harvested area and yield.  Harvested area is reduced 1.2 million acres to 76.8 million.  The soybean yield is projected at 44.4 bushels per acre, down 0.3 bushels.  Sunflower seed and peanut production are also projected lower this month while canola and cottonseed production are projected higher.

 

U.S. soybean exports are increased 35 million bushels to 1.520 billion reflecting strong export sales and reduced export prospects for Argentina resulting from lower beginning stocks.  Soybean crush is raised 15 million bushels to 1.665 billion due to improved prospects for domestic soybean meal disappearance and to a small reduction in the projected soybean meal extraction rate.  The September 1 soybean stocks estimate confirmed a third consecutive marketing year of relatively low residual use.  For 2010/11 residual use is reduced to 32 million bushels, down 38 million from the previous estimate.  Soybean ending stocks are projected at 265 million bushels, down 85 million from last month.

 

Prices for soybeans and products are all raised this month, supported by strong prices for corn.  The U.S. season-average soybean price range for 2010/11 is projected at $10.00 to $11.50 per bushel, up 85 cents on both ends of the range.  The soybean meal price is projected at $290 to $330 per short ton, up $20 on both ends of the range.  The soybean oil price range is projected at 39.5 to 43.5 cents per pound, up 2 cents on both ends.

 

Global oilseed production for 2010/11 is projected at 440.6 million tons, unchanged from last month.  Global soybean production is projected at 255.3 million tons, up 0.4 million.  Brazil soybean production is raised to 67 million tons, up 2 million due to increased area.  India soybean production is raised 0.4 million tons to 9.2 million, also due to increased harvested area.  Global sunflower seed production is reduced this month as lower production for Russia is only partly offset by an increase for Ukraine.  Other changes include increased cottonseed production for Australia and India.  Global oilseed stocks for 2010/11 are reduced 1.7 million tons to 71.4 million.  Soybeans account for most of the change, with a reduction for the United States partly offset by projected increases for Brazil and China.

 

COARSE GRAINS:U.S. feed grain production for 2010/11 is projected lower this month based on reduced forecasts for corn and sorghum and smaller production estimates for barley and oats from the Small Grains 2010 Summary report.  Corn production is forecast 496 million bushels lower as a 258,000-acre increase in harvested area is more than offset by a 6.7-bushel-per-acre reduction in yield.  As forecast, this year’s yield and production still would be the third highest on record.

 

Higher 2010/11 corn beginning stocks raise prospects for 2010/11 feed and residual disappearance, especially during the September-December quarter.  Ending stocks for 2009/10 are raised 322 million bushels based on the September 1 stocks estimate.  Larger-than-expected carryout of old-crop corn combined with an unusually early start to this year’s harvesting suggest heavy new-crop corn use before the September 1 beginning of the 2010/11 marketing year.  Individual state harvest progress reports suggest that 600-700 million bushels of corn were harvested across the South, Southern Plains, and southern Corn Beltbefore September 1.  This is about double the level of the preceding 2 years and similar to what happened between the 2006/07 and 2007/08 marketing years.  New-crop corn usage ahead of September 1, 2007, lowered feed and residual disappearance during the June-August quarter of 2006/07 and boosted feed and residual disappearance during the September-December quarter of 2007/08.

 

Despite the increase in 2010/11 beginning stocks, lower forecast production and higher projected domestic disappearance leave ending stocks down sharply from last month.  Feed and residual use for 2010/11 is projected 150 million bushels higher reflecting the expected impact of new-crop corn usage before September 1 on indicated disappearance during the current marketing year.  Exports are lowered 100 million bushels with tighter available supplies, higher prices, and increased competition from Argentina.  U.S. ending stocks for 2010/11 are projected 214 million bushels lower at 902 million.  The season-average farm price is projected at $4.60 to $5.40 per bushel, up 60 cents on both ends of the range.

 

A number of changes are made this month to 2009/10 corn usage with the biggest a 358-million bushel reduction in feed and residual use as indicated by the September 1 stocks and small upward revisions to exports and food, seed, and industrial (FSI) use based on the latest available data.  Sorghum FSI use and exports for 2009/10 are also lowered slightly this month.  Changes to 2009/10 feed and residual use for barley and oats reflect small revisions to June 1 stocks from the September 30 Grain Stocks report.

 

Global coarse grain supplies for 2010/11 are nearly unchanged with lower U.S. supplies offset by increased foreign coarse grain production.  World corn production is lowered 6.4 million tons with the lower U.S. production and a 0.5-million-ton reduction for Russia only partly offset by increases for Argentina, Serbia, EU-27, and several Sub-Saharan Africa countries.  Production for Argentina is raised 4.0 million tons on higher expected area as rising corn prices and favorable early season soil moisture support a rapid pace of early corn planting.  Global barley production is lowered 1.4 million tons with reductions of 0.7 million tons for EU-27, 0.5 million tons for Russia, and 0.3 million tons for Canada.

 

Global coarse grain exports for 2010/11 are increased this month mostly reflecting higher expected corn exports from Argentina, which are raised 3.5 million tons, along with small increases for Paraguay, Mexico, and Zambia.  Corn imports are increased for Turkey, Colombia, Indonesia, and South Korea supporting higher expected corn feeding in these countries.  Global corn ending stocks for 2010/11 are projected 3.2 million tons lower this month despite increases for Argentina, EU-27, Zambia, and Iran.  The reduction in U.S. corn ending stocks outweighs these increases.

 

 

WHEAT:U.S. wheat ending stocks for 2010/11 are projected 49 million bushels lower this month with lower estimated production and higher expected feed and residual use.  Production is lowered 41 million bushels based on the Small Grains 2010 Summary report.  Feed and residual use is raised 10 million bushels on higher-than-expected disappearance during the June-August quarter as indicated by the September 1 stocks.  Higher carryin with small upward revisions to estimated 2009/10 production and ending stocks are partly offsetting.  The 2010/11 season-average farm price is projected at $5.20 to $5.80 per bushel compared with $4.95 to $5.65 per bushel last month.

 

Global wheat supplies for 2010/11 are projected 1.0 million tons lower mostly reflecting lower production in the United States.  World production for 2010/11 is projected at 641.4 million tons, down 1.6 million tons from last month; however, beginning stocks are raised 0.6 million tons with upwardly revised 2009/10 production estimates for South America and Canada.  For 2010/11, production is lowered 0.5 million tons for Mexico and 0.3 million tons each for Algeria and Canada.  Production is raised 0.5 million tons for Europe and 0.3 million tons for Ethiopia.

 

World wheat trade for 2010/11 is nearly unchanged this month.  Imports are raised for North Africa and Mexico, but lowered for EU-27 and Iran.  Exports are raised for Uruguay, but lowered for Mexico.  World exports for 2009/10 are raised 1.6 million tons on the latest available trade data.  Large late-season shipments boost 2009/10 Argentina and EU-27 exports 1.0 million tons and 0.6 million tons, respectively. 

 

Global consumption is raised 2.1 million tons for 2010/11 with higher expected feed use for EU-27, Canada, and the United States.  Global ending stocks for 2010/11 are projected 3.1 million tons lower with the largest reductions for EU-27 and the United States.  Other reductions include Canada, Uruguay, Syria, and Iran.  Ending stocks are projected higher for Brazil and Egypt.  At the projected 174.7 million tons, 2010/11 stocks remain 50.2 million tons above the recent low in 2007/08.

 

RICE:U.S. rice production in 2010/11 is forecast at a record 242.3 million cwt, but down 13.1 million from last month due entirely to a decrease in yield.  Average yield is estimated at 6,687 pounds per acre, down 360 pounds from last month, and the lowest yield since 2005/06.  Harvested area is unchanged at 3.62 million acres.  Long-grain production is forecast at a record 182.0 million cwt, 9.8 million below last month, and combined medium- and short-grain production is forecast at 60.3 million, down 3.25 million.  The import and domestic- and residual-use forecasts are unchanged from a month ago.  The total rice export projection at 119 million cwt is unchanged from a month ago; however, the rough rice export projection is raised 1.0 million, and the combined milled- and brown-export forecast (rough-equivalent basis) is lowered the same amount.  Total rice ending stocks are projected at 52.5 million cwt, down 13.1 million from last month and the largest stocks since 1985/86.

 

The 2010/11 all rice season-average price is forecast at $12.10 to $13.10 per cwt, up $1.80 per cwt on both ends of the range compared to $14.00 per cwt for 2009/10.  The long-grain season-average price range is projected at $10.50 to $11.50 per cwt, up $2.00 per cwt on each end of the range compared to $12.80 per cwt for last year.  The combined medium- and short-grain price range is projected at $17.30 to $18.30 per cwt, up $1.30 per cwt on each end compared to $17.70 per cwt for 2009/10.  The price increase is due to a smaller U.S. crop, higher global prices, and a weaker dollar.

 

Projected global 2010/11 rice production and consumption are lowered from a month ago, and trade and stocks are little changed.  World rice production is forecast at a record 452.5 million tons, down 2.1 million from a month ago mostly owing to decreases in the United States, Burma, and India.  India’s 2010/11 rice crop is lowered 2.0 million tons to 97.0 million due mostly to below normal monsoon rains in the east.  Global consumption is lowered 1.7 million tons owing to a reduction in India. Global 2010/11 ending stocks are projected at 94.3 million tons, down 0.3 million from last month, and nearly the same as 2009/10.

 

SUGAR:Projected U.S. sugar supply for fiscal year 2010/11 is increased 63,000 short tons, raw value, from last month, due to higher beginning stocks more than offsetting lower production.  Florida cane sugar production is reduced 65,000 tons to match processor production projections, while Hawaii is increased 35,000 tons to be in line with the previous year=s estimate.  Sugar use is increased 100,000 tons, in line with the increase for 2009/10.

 

For 2009/10, U.S. supplies are increased 208,000 tons, due to higher production and imports.  Production is increased 98,000 tons to account for larger-than-expected September output of U.S. beet sugar and Hawaii cane sugar.  Imports are increased 110,000 tons, mainly due to higher imports from Mexico.  Total use is increased 115,000 tons to reflect the strong demand for imported sugar and minor changes in sugar exports and deliveries for re-export products.  Ending stocks are increased 93,000 tons, to 1.6 million tons or 14.4 percent of total use.

 

LIVESTOCK, POULTRY, AND DAIRY:The forecast of total U.S. meat production is raised for 2010 but lowered for 2011.  Beef and broiler production forecasts for 2010 are raised as second half production is higher than previously expected, but the pork production forecast is reduced due to lower slaughter and slower growth in slaughter weights.  The 2011 beef production forecast is raised primarily in the first quarter as larger-than-expected third quarter 2010 placements are marketed.  Pork production for 2011 is lowered from last month as relatively high feed prices are expected to keep the growth in sows farrowing modest and dampen hog weights.  Broiler and turkey production forecasts for 2011 are lowered from last month as higher feed prices slow growth.  Likewise, egg production for 2011 is forecast lower.

 

Beef import forecasts are lowered for 2010 and 2011 as supplies in Oceania are expected to be relatively tight while foreign demand strengthens.  Export forecasts for beef are raised on continuing strong sales to a number of markets.  Pork and poultry trade forecasts are unchanged from last month.

 

The cattle price forecasts for 2010 and 2011 are virtually unchanged.  Hog prices are forecast higher on tighter supplies for both 2010 and 2011.  The broiler price for 2010 is forecast lower on increased production, but the price forecast is raised slightly for 2011 on reduced output.  Egg prices for 2010 and 2011 are forecast lower.

 

Forecast milk production for 2010 is raised slightly from last month as higher milk per cow more than offsets lower cow numbers.  The forecast for 2011 is reduced as higher feed prices are expected to slow the rate of growth in cow numbers and milk per cow compared with last month.  Import and export forecasts are unchanged.  Fat basis stocks are reduced for 2010 as stocks of butter are forecast to be tight.  Skim solids stocks are unchanged.

 

Continued strength in demand for cheese and relatively tight supplies of butter support higher forecast prices for 2010 and 2011.  Price forecasts for nonfat dry milk (NDM) are raised for 2010 and 2011 as supplies are tighter.  The 2010 whey price forecast is increased slightly but is unchanged for 2011.  Both Class III and Class IV price forecasts for 2010 and 2011 are raised due to the higher product prices.  The all milk price is forecast to average $16.45 to $16.55 per cwt for 2010 and $16.00 to $16.90 per cwt for 2011.


 

COTTON: This month’s U.S. cotton supply and demand estimates are virtually unchanged from last month.  Production is raised marginally, as increases for the Delta and Southwest are nearly offset by reductions for the Southeast.  Domestic mill use and exports are unchanged.  Ending stocks remain at 2.7 million bales, the equivalent of 14 percent of total use.  The forecast range for the marketing-year average price received by producers is forecast at 67 to 79 cents per pound, compared with 63 to 77 cents last month.  At the midpoint of the range, the forecast is 10 cents above the final 2009/10 marketing-year average price of 62.9 cents per pound.

 

Slight adjustments to the world cotton estimates for 2010/11 result in slightly lower ending stocks compared with last month.  Higher production in Argentina, Australia, and Turkey is more than offset by a 1.0-million-bale reduction for China, which is based mainly on lower area as reported by Chinese agencies.  China’s beginning stocks also are reduced as the current severe shortage suggests that consumption in 2009/10 was higher than previously forecast.  Estimates of total world consumption and trade are raised slightly.  World ending stocks are now forecast at 44.7 million bales, down about 2.0 million bales from the beginning level.  Compared to last season, China’s stocks are forecast to fall by 3.5 million bales, while stocks are expected to rise in Brazil, India, and Australia.

 

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   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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