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September 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.

WASDE Report for 9/30/10

Sep 30, 2010

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WASDE Report for 9/30/10

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OILSEEDS:  U.S. oilseed production for 2010/11 is projected at 104.8 million tons, up 1.5 million from last month.  Soybean production is forecast at a record 3.483 billion bushels, up 50 million from last month based on an increase in the projected yield to a record 44.7 bushels per acre.  Production of peanuts and cottonseed are also raised this month.

Soybean exports for 2010/11 are increased 50 million bushels to 1.485 billion reflecting strong early season sales and a projected increase in global import demand, especially for China.  Soybean ending stocks are projected at 350 million bushels; down 10 million from last month as higher export demand more than offsets the increased supply.

Soybean exports for 2009/10 are projected at a record 1.495 billion bushels, up 25 million from last month reflecting strong shipments in the final weeks of the marketing year.  The increase is partly offset with a lower residual, leaving ending stocks projected at 150 million bushels, down 10 million.  Other changes for 2009/10 include reduced use of soybean oil for biodiesel and increased soybean oil exports.  Season ending soybean oil stocks are projected record high at 3.21 billion pounds.

Prices for soybeans and products are all raised this month, supported by strong prices for corn and wheat.  The U.S. season-average soybean price range for 2010/11 is projected at $9.15 to $10.65 per bushel, up 65 cents on both ends of the range.  The soybean meal price is projected at $270 to $310 per short ton, up $20 on both ends of the range.  The soybean oil price range is projected at 37.5 to 41.5 cents per pound, up 1 cent on both ends of the range. 

Global oilseed production for 2010/11 is projected at 440.6 million tons, up 0.9 million from last month.  Global soybean production is projected at 254.9 million tons, up 1.2 million mainly due to a higher production forecast for the United States.  China soybean production is reduced 0.2 million tons to 14.4 million based on lower yields.  Global rapeseed production is projected higher as increased production for Canada more than offsets reduced crops for Russia and Ukraine.  Other changes include reduced peanut and cottonseed production for China, reduced cottonseed production for Pakistan, increased cottonseed production for Australia, and reduced palm oil and palm kernel production for Indonesia.

Global oilseed trade for 2010/11 is raised 3.8 million tons to 108.7 million.  China soybean imports are raised 3 million tons to 55 million, up from a revised 50 million in 2009/10.  Imports are raised to reflect increased protein meal consumption and higher soybean stocks, now projected to reach 15.5 million tons.  Global oilseed stocks are projected lower mainly due to reduced soybean stocks in the United States and South America.

COARSE GRAINS:  Projected U.S. feed grain supplies for 2010/11 are lower this month with lower carryin and reduced production for corn and sorghum.  Beginning stocks for corn are projected 40 million bushels lower with higher 2009/10 corn use for ethanol and a small increase in exports.  Corn production for 2010/11 is forecast at 13,160 million bushels, down 205 million, but still the largest crop on record.  The national average yield is forecast at 162.5 bushels per acre, down 2.5 bushels.  The largest reductions in forecast yields are for the eastern Corn Belt, which account for more than half of the reduction in total output.

Domestic corn use for 2010/11 is lowered 100 million bushels with lower expected feed and residual use as higher prices trim feeding demand and the smaller crop reduces residual disappearance.  Projected exports are raised 50 million bushels with rising world demand for coarse grains, particularly corn.  U.S. corn ending stocks are expected to decline to 1.1 billion bushels, down 196 million bushels.  At this level, 2010/11 carryout would be the lowest since 2003/04.  Stocks as a percentage of total use would be the lowest since 1995/96.  The season-average farm price is projected at $4.00 to $4.80 per bushel, compared with $3.50 to $4.10 last month.

Other 2010/11 feed grains changes include lower projected ending stocks for sorghum and oats.  Sorghum production is forecast 7 million bushels lower.  Sorghum exports are raised 10 million bushels with stronger world demand for coarse grains.  Sorghum feed and residual use is lowered 10 million bushels.  Oats imports are lowered 10 million bushels with lower expected production in Canada.

Global coarse grain supplies for 2010/11 are projected down 8.7 million tons with reduced foreign and U.S. production.  Most of the foreign reductions this month are in EU-27 and FSU-12 countries.  A 10.3-million-ton reduction in world coarse grain production for 2010/11 is partly offset by larger corn beginning stocks for Brazil with a 1.8-million-ton increase in 2009/10 corn production.  Lower U.S. and EU-27 corn production account for more than half of the reduction in 2010/11 global coarse grain output.  EU-27 corn production is reduced 1.2 million tons with lower reported area and yields for France and Germany and lower reported yields for Italy, Austria, and Spain.  World barley production is lowered 2.0 million tons with reductions for Russia, EU-27, Belarus, and Morocco.  World oats production is reduced 0.9 million tons with lower production for EU-27, Canada, and Belarus.  Lower rye production in EU-27 and Belarus lowers world output 1.0 million tons. 

Global coarse grain trade is increased this month with U.S. corn exports raised 1.3 million tons.  A 0.5-million-ton reduction for EU-27 corn exports is offset by a 0.5-million-ton increase for Ukraine.  Corn imports are raised 2.0 million tons for EU-27 as corn partly replaces wheat in feeding.  Russia corn imports are raised 0.7 million tons helping to offset reduced supplies of feed barley. 

Global corn consumption is lowered as reduced prospects for corn feeding in the United States and Ukraine more than offset higher expected corn feeding in EU-27, Russia, Mexico, and Canada.  Global corn ending stocks are projected 3.6 million tons lower.

WHEAT:  U.S. wheat ending stocks for 2010/11 are projected lower this month with higher expected world demand for U.S. wheat.  Strong early season sales and reduced supplies in EU-27, particularly of higher quality wheat, support an improved outlook for U.S. exports.  Wheat exports are projected 50 million bushels higher with larger expected shipments of Hard Red Winter, Hard Red Spring, and White wheat.  Projected ending stocks are lowered by the same amount to 902 million bushels.  At the projected level, stocks would remain the second highest in more than a decade.  The 2010/11 season-average farm price is projected at $4.95 to $5.65 per bushel, compared with $4.70 to $5.50 last month.

Global wheat supplies for 2010/11 are projected down 0.7 million tons as higher carryin mostly offsets a 2.7-million-ton reduction in world output.  Much of the offset is explained by Canada, where beginning stocks are increased 1.5 million tons, as reported by Statistics Canada, and production is increased by 2.0 million tons.  These changes mostly offset lower production in Russia and EU-27.  Production for Russia is lowered 2.5 million tons based on the latest harvest results for the drought-affected central growing areas in the Volga and Urals Federal Districts.  EU-27 production is lowered 2.4 million tons with the largest reductions for Hungary and Romania where heavy summer rains reduced yields.  Smaller reductions in a number of other member countries also reduce EU-27 production.  Although the reduction for Germany is small, persistent and heavy August rains have reduced supplies of high quality milling wheat.  Other production changes include a 0.3-million-ton reduction for Belarus and a 0.4-million-ton increase for Morocco.

World wheat trade for 2010/11 is raised with global exports projected 1.4 million tons higher.  Export shifts among countries largely reflect availability of supplies and increased competition from North America.  Exports are raised 2.0 million tons for Canada and 1.4 million tons for the United States.  Exports are also raised 0.5 million tons each for Iran and Kazakhstan.  A 0.5-million-ton increase in Russia exports reflects larger-than-expected shipments during early August, before implementation of the export ban on August 15.  These increases more than offset a 3.0-million-ton reduction for EU-27 and a 0.5-million-ton reduction for Australia. 

EU-27 exports are lowered with reduced supplies and increased competition from Canada.  Logistical constraints are expected to limit exports from Australia.

World wheat imports for 2010/11 are raised with increases for Russia and Nigeria.  Imports for Russia are raised 1.4 million tons as imports from regional suppliers support domestic usage, particularly for feeding.  World wheat consumption is lowered 3.8 million tons with lower consumption in EU-27, Russia, and Kazakhstan outweighing increases for Pakistan, Canada, and Nigeria.  Wheat feeding is lowered 2.0 million tons for EU-27 with imported coarse grains expected to partly replace wheat in livestock and poultry rations.  Global ending stocks are projected 3.0 million tons higher with increases for EU-27, Canada, and Australia.  Ending stocks are lowered for Pakistan and Russia.

RICE:  U.S. rice production in 2010/11 is forecast at a record 255.3 million cwt, up 9.4 million from last month due to both an increase in area harvested and yield.  Harvested area is estimated at 3.62 million acres, up 130,000 acres from last month and the second highest on record.  The average yield is estimated at 7,047 pounds per acre, up 8 pounds per acre.  Long-grain production is estimated at a record 191.8 million cwt, up 4.6 million from last month, while combined medium- and short-grain production is estimated at 63.5 million, an increase of 4.9 million. 

All rice beginning stocks for 2010/11 are raised 2.8 million cwt from last month to 36.7 million based on USDA’s Rice Stocks report released on August 27.  The import projection is reduced slightly based in part on the revised 2009/10 estimate and the recent trend of little to no growth in imports.  Domestic and residual use for 2010/11 is lowered 2.0 million cwt to 127.0 million based mostly on a reduction in the 2009/10 estimate. 

Exports for 2010/11 are projected at 119.0 million cwt, up 5.0 million cwt from last month, and up 8.8 million from the revised 2009/10 estimate.  Long-grain exports are raised 3.0 million cwt to 83.0 million, and combined medium- and short-grain exports are up 2.0 million to 36.0 million.  Larger exports are expected to the Middle East and the Western Hemisphere.  Ending stocks for 2010/11 are projected at 65.5 million cwt, up 8.7 million from last month, up 28.8 million from 2009/10, and the largest stocks since 1985/86.

The 2010/11 all rice season-average farm price is forecast at $10.30 to $11.30 per cwt, down 45 cents per cwt on each end of the range from last month compared to $14.00 per cwt for 2009/10.  The long-grain season-average farm price range is projected at $8.50 to $9.50 per cwt, down 50 cents per cwt from last month compared to $12.80 per cwt for 2009/10.  The combined medium-and short-grain farm price range is projected at $16.00 to $17.00 per cwt, down $1.00 per cwt on each end of the range from last month compared to a revised $17.70 per cwt for 2009/10.

Projected global 2010/11 rice supplies and use are both lowered from last month.  Global rice production is projected at a record 454.6 million tons, down 4.6 million tons from last month's estimate, mainly due to large declines for several countries including China, Indonesia, and Pakistan. 

China’s 2010/11 rice crop is reduced 1.5 million tons to 136.0 million, due mainly to a decrease in the early rice crop.  Both area and yield are reduced by early season drought in some areas combined with late-season flooding in other areas.  Indonesia’s 2010/11 rice crop is reduced 2.0 million tons to 38.0 million, based in part on a report from the U.S. Agricultural Counselor in Jakarta.  Indonesia’s 2009/10 rice crop is also reduced—a reduction of 1.7 million tons to 37.1 million.  Indonesia’s yield growth has stagnated due to weather, pests, and disease problems.  Pakistan’s 2010/11 rice crop is reduced by 1.2 million tons or 18 percent to 5.3 million as severe flooding lowered both area and average yield. 

Global 2010/11 exports are reduced by 0.6 million tons to 31.0 million, mainly due to a reduction for Pakistan.  Global consumption is lowered by nearly 2.3 million tons, mainly due to decreases for China    (-0.5 million) and Indonesia (-1.35 million).  Global ending stocks for 2010/11 are projected at 94.6 million tons, down 3.0 million from last month, but up slightly from 2009/10.  Stocks are lowered for China, Indonesia, Vietnam, and Iran, and raised for the United States.

SUGAR:  Projected U.S. sugar supply for fiscal year 2010/11 is increased 101,000 short tons, raw value, from last month, due to higher beginning stocks and production. Beet sugar production is increased 80,000 tons based on higher forecast U.S. sugarbeet production.  Forecast U.S. sugarcane production is little changed from last month.  Sugar use is increased 275,000 tons in line with the increase for 2009/10.

For 2009/10, U.S. supplies are increased 141,000 tons, due to higher production and imports.  Louisiana cane sugar production is increased 35,000 tons based on expectations of an early start to the 2010-crop harvest in September.  Imports are increased 105,000 tons, with 135,000 tons more from Mexico and high-tier imports more than offsetting increased shortfall under the tariff rate quota.  Total use is increased 120,000 tons to reflect the stronger-than-expected pace of deliveries in recent months.  Ending stocks are increased 21,000 tons.

For Mexico, 2010/11 ending stocks are lowered 64,000 metric tons, raw value, due to higher domestic use more than offsetting slightly higher beginning stocks.  Mexico=s 2009/10 beginning stocks are increased to reflect recently released government data, while increased domestic use and exports are nearly offsetting.

LIVESTOCK, POULTRY, AND DAIRY:  Total U.S. meat production forecasts for 2010 and 2011 are reduced slightly from last month.  The forecast for 2010 is reduced as lower pork and broiler production more than offset an increase in beef production.  The 2011 forecast is reduced as higher feed prices encourage cattle producers to keep cattle on forage longer and tempers pork, broiler, and turkey production gains.  USDA’s Quarterly Hogs and Pigs report will be released on September 24 and will provide an indication of sow farrowing intentions into early 2011.  Egg production forecasts for 2010 are adjusted to reflect a revision in second-quarter production but the 2011 forecast is unchanged.

Beef imports are reduced for 2010 and 2011 as imports have been lower than expected.  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.

Livestock and poultry prices for 2010 are raised but forecasts for 2011 cattle and hog prices are unchanged.  The broiler and turkey price forecasts for 2011 are raised slightly on expected tightness in supplies. 

COTTON:  The 2010/11 U.S. cotton forecasts include higher production, domestic mill use, and exports relative to last month.  Production of 18.8 million bales is nearly 2 percent above last month, based on increases across all regions of the cotton belt.  Domestic mill use is raised to 3.6 million bales, reflecting recent increases in consumption rates and prospects for additional spinning capacity.  Exports are raised 500,000 bales to 15.5 million due to continued very tight foreign supplies.  U.S. ending stocks are now forecast at 2.7 million bales, 500,000 bales below last month.  If realized, both the stocks level and the stocks-to-use ratio of 14 percent would be the smallest since 1995/96.  The average price received by producers is forecast at 63 to 77 cents per pound, 2 cents above last month.  The midpoint of the interval, 70 cents per pound, would also be the highest price since 1995/96.

The aggregate world cotton 2010/11 forecasts are adjusted slightly from last month.  World production is raised marginally, as reductions for China, Pakistan, and Tanzania are more than offset by increases for Australia and the United States.  Consumption is reduced for Pakistan and others but is raised for India and the United States, resulting in a slight net reduction.  World trade is reduced, due mainly to a 1.5-million-bale reduction in exports by India resulting from the recent restrictions imposed by the government.  Lower exports by India are mostly offset by higher exports from Australia, the United States, and Brazil.  World ending stocks are about unchanged from last month.  The projected world stocks-to-use ratio of 38 percent is the lowest since 1994/95. 

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, Nat Gas and 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.

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$199.00 USD for each month, renewable monthly

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 The weekly service is "Monday only" and comes out usually by Saturday morning so you can prepare for Sunday night and Monday's trade.

Weekly Service: 13 weeks for $129 total subscription fee.

 

           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 (elec.) Daily Numbers & Trade Ideas for 9/27/10

Sep 27, 2010

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This report was sent to subscribers on 9/25/10 11:30 p.m. Chicago time to be used for trading on 9/27/10. Everything is done by Howard Tyllas, no program or black box.

December Cattle (elec.)

After the close recap on 9/27/10: My resistance was 99.55, .05 from the actual high, and my pivot acted as support and was 98.10, .07 from the actual low.

All Results for 9/27/10 were:

Soybeans: My resistance was .03 from the actual high; my support was .06 ¼ from the actual low.

Corn:    My resistance was .05 from the actual high; my support was .01 3/4 from the actual low. 

Crude Oil: My resistance was .22 from the actual high; my support was .19 from the actual low.

Nat Gas: My resistance was .030 from the actual high; my support was .005 from the actual low.

S&P:    My resistance was 5.25 from the actual high; my support was 8.75 from the actual low. 

Gold:     My resistance was $0.30 from the actual high; my support was $5.80 from the actual low. 

Euro:    My resistance was .11 from the actual high; my support was .22 from the actual low. 

Bonds: My resistance was 8 from the actual high; my support was 5 from the actual low. 

Cattle:  My resistance was .05 from the actual high; my support was .07 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 9/28/10 have already been sent to subscribers. 

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  99.55

  99.10

------------98.10       Pivot

  97.10                   

  96.45    

    Use the same numbers as used on 9/ 23 & 24 /10   

Trend                                        

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

Daily chart   ......   Up                  

Weekly chart .......Up                

Monthly chart....    Up      94.60 is the 200 day MA         

ATR 1.35                           Extremely Oversold  6%

 

cat 9 27 10

 

I still say "Uptrend line is resistance now, 98.10 is pivotal, 97.10 supports". 

December Cattle (elec.) for 9/27/10:

 I said ""Spike Top" was posted on Friday because of the Monday price action that opened lower than Thursday's close. Bearish action should bode well for further corrective action".

In my daily cattle numbers on Friday; my resistance was .07 from the actual high, my pivot acted as support and was .05 from the actual low.  

Cattle: Spot on numbers! When my support and resistance are off by only 2 or 3 ticks from the low and high of the day, trading with stops risking .35 works well. I have the same numbers as I have used the last 2 days, and have the same thoughts. This is a bull chart that is breaking down badly and is looking for real support now.

 December Cattle (elec.) for 9/24/10:

Cattle: Spot on resistance and accurate support. Spike top signal on Monday has banked over 3.50 and you can chalk this up to one that worked. Does not matter if next time you are stopped out, if it works 1/2 the time like this it is a casino owner's money maker in the long run. This has nothing to do with cattle, but rather the chart formation and does not matter the name on the chart.  

December Cattle (elec.) for 9/23/10:

Cattle: Spot on numbers! My idea to take the sell signals was a good one. Now that we went to the support in my numbers and chart comments, I want to trade without bias today and risk .35 on any trade idea.

December Cattle (elec.) for 9/22/10:

Cattle: Spot on numbers. Trade idea to take the sell signals only was a good one, and I want to do the same today risking .40 on the idea using a buy stop to protect.

December Cattle (elec.) for 9/21/10:

Cattle: Accurate support and helpful resistance at best. Bull chart with a bearish chart signal on Monday. Bull chart is strong but at longer term resistance. I can only take the sell signal today and would risk .40 using a buy stop to protect. 

December Cattle (elec.) for 9/20/10:

Cattle: Helpful numbers. Bull chart with resistances from the weekly and monthly chart compared to the uptrend line support. I can only trade this bull market without bias using the numbers to day trade with. I want to risk .35 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, Nat Gas and 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

 The weekly service is "Monday only" and comes out usually by Saturday morning so you can prepare for Sunday night and Monday's trade.

Weekly Service: 13 weeks for $129 total subscription fee.

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 Soybeans Daily Numbers & Trade Ideas for 9/22/10

Sep 22, 2010

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These numbers were sent to subscribers on 9/21/10 2:2530 p.m. Chicago time to be used for trading on 9/22/10. Everything is done by Howard Tyllas, no program or black box.

I will not post grains online again until the report on 9/30/10.

November Soybeans

After the close recap on 9/22/10: My resistance was 10.93 3/4, just .01 from the actual high, and my pivot acted as support and was 10.81, .01 1/2 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 9/23/10 have already been sent to subscribers at 5:10pm. 

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10.99 ¾                       

10.93 ¾                       

--------------10.81           Pivot   

10.68 ¼ 

10.54 ¼ 

  

Trend             

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

Daily chart   ....  Up                    

Weekly chart ... Sideways           

Monthly chart    Sideways   $9.61 1/2 is the 200 DMA

ATR 19 1/2         Overbought 75%  

november soybeans 9 22 10

I  still say "Bracket line from 12/1/09 high is support now, uptrend line at $10.30 is key support. Monthly chart gives me the next resistance at $11.14 1/4". Monday's high at $11 still resists.

November Soybeans for 9/22/10:

In my daily soybean numbers on Tuesday; my resistance was .06 from the actual high; my pivot acted as support and was .04 3/4 from the actual low.

Grains: Spot on corn resistance and accurate support, soybean numbers were accurate. If you watched the action on Tuesday you witnessed a fight for control on both sides of settlement more than once, but at the end of the day the bears were winners but exhausted. Forget weather chatter in other countries at this time because that is not in play right now in pricing our grain. Nothing has changed fundamentally and nothing but day to day exports and farmer sales on tap this week. Funds have made their bets and I doubt they will exit before the report on the 30th, maybe take some profits and position off the table though. Bulls might have been buying put protection on Tuesday because when corn was up $.08 the $.30 out of the money put spreads were unchanged, same as they were when corn was up only $.02 earlier.

As long as corn holds the gap at $4.96 they are poised to test $5.42. I need a close above $5.27 before I would look for $5.42. I do not know (or anyone else) if the funds will push it higher before the report. The report will give enough updated information and "guesstimates" that could push grains $1 higher or lower within a week after release. Known risk strategies or a minimal futures position is always the prudent thing to do going into a report. I look at this one as being "lucky" if you pick the right side. Yes I could always make the case of selling historic high prices with unknown fundamentals, but if the report numbers warranted I would completely lose that bias and would become a buyer at support levels going forward, or a seller at current levels if it was bearish numbers. No matter what, I always trade the numbers as a day trader and less likely to have a bias except when nearing bracket or trend lines on the chart.   

If you are a position trader and want to buy or sell, on the day you want to do so I always use the numbers to try for the best price based on my day trade approach. If let's say I want to buy today but the market opens below the pivot, I would try and buy lower and my risk of waiting might mean to buy higher instead when it goes over the pivot. So you ask me, where are we going from here? I have been honest, I have no idea! I cannot remember not having an opinion for a week or two out until the last 2 months literally writing I have no clue, and explained why I am not position trading. No sense in position trading without a conviction. My numbers have been spot on for the most part as I have been consistent in my accuracy year in and out for decades. Maybe 4 weeks out of the year 1/2 the markets I cover struggle to be accurate, the rest of the time it is smooth sailing. Nothing is 100% and as far as I am concerned, this is the closest you are going to come. Markets are not going to be orderly and without chaos at times, but my numbers do well during those times too. The problem to contend with is big moves up and down in short periods of time without change in fundamentals. That is never the problem when I day trade because when they go to a support I buy and when they go to a resistance I sell and always use a stop to protect. But in longer term trading if you are looking for larger gains, the swings can be larger too.

With that being said, these markets can break from here and come back to post new highs for the year. many bull markets have deep corrections before posting new highs. But if the numbers are truly bearish, we could be at $4 in a heartbeat, maybe on this report, or after the combines are in. I have always said "markets can and will do anything". This is what the task of a trader is, try and get the most out of winners but preserve gains when right, and limit losses when wrong. It takes only one time to disregard a loser before it turns into disaster, never leave yourself in that position.

Bulls and my producers alike are faced with the task of keeping the money gained with having the prospects to make more. At this price level I can only ... Subscribe Now!

You can be the person who knows what to do after the fact, and complain about protection not needed, or how smart you were to have taken it, but life, reality, and trading unfortunately does not work that way. What is reality is to have protection for money I have made and if I am wrong and the market does not go higher. I am never worried about what money I leave behind, I am in pursuit of making more and now have the courage to do so knowing if I am wrong I get my protection money back, and I keep my profits.

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I am in day trader mode without bias today and want to risk $.05 in corn and $.07 in soybeans.

November Soybeans for 9/21/10:

Grains: Spot on grain supports, and resistances were blown away. Funds bought 40,000 corn contracts and 7,000 soybeans it was estimated on Friday. Market continues to go up and will continue as long as the funds are willing to add to their positions. At some point in time the producers will sell crops to put income in their hands, and that is the only factor I can see to stop the advance until crops coming in can show what yields are. The yields will propel prices higher, or will shut the door in the bull's faces. For now the charts are bullish, momentum is totally in control of the bulls, and the market is climbing higher until sellers such as funds taking some profits off the table or producers selling stops it.

The fact that cash is not keeping up with futures is a divergence created by speculative buying in the futures markets. This is what happened in 2008, and eventually the markets should come in line, no matter if cash comes up to the futures, the futures come down to the cash, or a combination of both.

Soybean yields have been coming in big, but with corn making new highs, soybeans are compelled to go higher too, because there is a relation in feeding corn or soybean meal, and the fight for acreage between the two.

As I said on Thursday night when corn was sitting just above $5, the bulls smell bear blood, and by the time the night session ended the volume was almost 70,000 contracts! By the time the day session ended it was over 215,000 contracts electronically alone. The commitment of traders (COT) report for the week ending 9/14/10 showed they added only 10,000 contracts to 412,000, less than I had thought. Since Tuesday they bought around 60,000 contracts so it will be interesting to see what their position shows this week. They left their soybean position unchanged at 137,000 contracts, but nearly a record.

In 2008 crude oil went to $147, the stock market was on a 5 year rally, and the delayed plantings had the market thinking we would need to ration supplies. But the actual planted acres came in more than expected, weather improved greatly, and thoughts production and carryout would be adequate sent prices over the waterfall's edge. Of course when the equities market plunged that was the kiss of death for risk taking and commodity ownership.

Last week the bulls had cries of an early frost in the PRC and Canada, new all time highs in gold, equities rallying, $ weakness, and bull charts in their favor. Bulls continue to press yields less than 160 bushels per acre and talk by many of 158. Ethanol still at profitable levels and the market moving higher is the natural way to price in the perceived shortfall in production to ration usage through higher prices. Funds can also be in the mood to buy even more contracts even at these position record levels and high prices.

I am keeping in mind that October grain options (based on December contracts) expire this Friday and might want to sit on the $5 mark on Friday. If farmers come out and sell, and or funds take pause in their buying, we could see a shakeout correction. I think this should happen before the September 30th report, and it could be from a higher level near $5.42 when it happens. If that report adds on 100 to 150 million more bushels to stocks than what is expected, that could trigger massive exiting from long positions. (Look at my comments about the Quarterly stocks report in my commentary on (9/17/10) USDA is forecasting a 2010/11 soybean carryout of 350 million bushels based on a record 44.7 yield. If it came in at 43 BPA we would have stocks of 230 million compared to the 2007/08 of 215 million.

Those are the statistics I am looking at for price direction; my charts are what I look at for price discovery. My resistance numbers are from weekly and monthly charts and I use them for places to take profits if long, and or a place to go short if looking to do so. My task as a trader is to make money, and with grains having fundamentals that are for me impossible to pin down at this time, leaves me in day trader mode which is the easier time frame to predict what the market will do and what prices will provide support and resistance. The higher we go the more I want to trade from the short side, but remember if I am wrong (meaning the numbers do not hold) I only lose $.04 in corn and $.06 in soybeans. My strategy to sell corn and soybeans with a known risk and no margin is losing money, and I will hold until the report on the 30th proves to exit this losing trade, or keep it. The losses in being wrong this strategy loses less as I get more wrong (market going higher) but since my strategy cost between $.10 and $.20 total, the loss is not much more than a day trade, and I still have until expiration to be right or exit for whatever it is worth when I no longer think so.

Producers have a much more complex situation than a futures trader when it comes to profits (or losses). They have a basis to deal with, adjustment to production size, and input costs forecasting next year's crop. But when it comes to selling no matter what, it is against the "CBOT board" price. This is what we all do, buy or sell the CBOT, and we try and risk a certain amount to make a certain amount. Every day we have another chance to adjust our position accordingly, or manage a trade we have to protect profits or limit losses. Before option trading a producer would sell the futures and were done with it, and waited for the basis to improve before lifting the futures (buying back) and selling the "cash". With options there is a much better way because you can literally reflect your thinking in an exact option strategy that completely reflects what you think and want to do, and there is nothing else I know of that comes close to that. Does it have a cost? Yes, but the costs are completely known, and the costs give you the protection you want and the chance to make more money if the price goes up. (Warning, without option knowledge you can be right the market and lose money with the wrong option strategy. With option knowledge you can be wrong the market but still make money with the right strategy)

My producers for the most part have gotten back their crops and ... Subscribe Now! The reality of what they, you, or I do is that at the time we do things, that is what we actually think at the time, and looking back and saying what we should have done is not reality. Everyone knows who to bet after the race is over, so thinking you knew something other than what you bet speaks for itself.

I am not surprised at grains rallying to these levels or above, but I did not think it would happen until after the 30th report and production is coming in smaller than expected. At some point of time a producer or speculator must sell, and when they do they should be happy with the price they locked in. If you are not happy because they go higher, and when they go below where you sold you are happy, then you have personal issues. You make a decision based upon risk reward, and producers make the same decisions but it is their income, their livelihood at stake, not just another trade idea that does not affect their income used to finance a speculative trading account.

The good news is that my producers are faced with windfall profits from their original hedge. It is one thing to achieve higher prices; it is another task to keep the profits obtained from it. Ask the producers who did nothing in 2008 and watched the market rally to unheard of windfall profits, and then watched them go below the cost of production and did nothing. This mindset of trying to sell the high of the year or more than what the farm next door gets is disaster because that is not what a speculator or producer should be focused on. In the feat of trying to sell for a high price, you are gambling that the price will not go down. If it does you will lose money.

The reason that my producers who were bullish (or bearish) could withstand the drawdown was because they had protection when it went to $3.44 on June 30th. Yes, less than 3 months ago we were there, do you know where they will be 3 months from now? I do not know right now. Now they are getting the money they were going after. They and even the bears who hedged are now finding themselves not hedged above $4.60 and are now faced with how to keep it. Just like any un-hedged crop, looking at prices and locking them in are 2 different things. I have always been in the camp of giving up a % of my profits to insure what I have made and continue to have the right to make more in doing so. My job as a trader is not to get every penny, but to have a plan and strategy to take out what I can. It is what I make or lose that is important, not what I did not make and left on the table.

Bullish speculators or producers are faced with the task of locking in profits and allowing for further gains without losing what they have already gained. I did this before there was options by reducing my position as the market went my way, so if they went back to where I started, I had locked in good profits along the way, and have a much smaller position than what I started with. Options came along and I found ways to remain in my position and even add on if I wanted, but pay a % of what I made for "protection".

Producers should ... Subscribe Now! ... when you feel the need or just because of locking in profits. You sleep at night knowing that if the market breaks, you are protected, and if they keep rallying you are making more than what the protection costs. I would be happy to give $.25 to $.35 to protect a $1 down if it happens, but give me the freedom for continued upside profits. I am happy with $.65 on the dollar and protected, than the $.35 paid and not needed. Lastly, when the bullish producer does want to sell some upside (call spreads or when in the bin an outright call), that should help pay for some of the put spreads. In 2008 you should have been glad you if you sold corn above $5 or soybeans above $10, and not complained when they were much higher, or glad after they went much lower. With options you would have made $.65 on the dollar all the way up! This way you should be happy knowing that you have unlimited upside potential, and protection at the same time. Life insurance is worthless while you are alive but you cannot say it is not worth it. It gives your family the protection needed without your income if you are not around. You do not complain for having life insurance and being alive do you?

Volatility is going up as is normal as the market goes higher (because now there is more room down to zero) and the market can and will do anything. My numbers give me a good idea where support and resistance is, and I use them to day trade my ideas as well as entering or exiting longer term trade ideas. I want to risk $.05 in corn and $.08 in soybeans on any day trade idea.   

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

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

 The weekly service is "Monday only" and comes out usually by Saturday morning so you can prepare for Sunday night and Monday's trade.

Weekly Service: 13 weeks for $129 total subscription fee.

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 (elec) Daily Numbers & Trade Ideas for 9/22/10

Sep 22, 2010

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This report was sent to subscribers on 9/21/10 6:40 p.m. Chicago time to be used for trading on 9/22/10. Everything is done by Howard Tyllas, no program or black box.

December Cattle (elec.)

After the close recap on 9/22/10: My pivot acted as resistance and was 99.87, .12 from the actual high, and my support was 98.20 FG, just .10 from the actual low

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101.10                          Resistance

------------99.87        Pivot & Key Uptrend Line Support 

  98.65                   

  98.20 FG                    Support

         

Trend                                        

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

Daily chart   ......   Up                  

Weekly chart .......Up                

Monthly chart....    Up      94.50 is the 200 day MA         

ATR 1.27                           Extremely Oversold  5%

cat 9 22 10

Uptrend line is pivotal now, 101.10 resists, and 98.00 supports. 

December Cattle (elec.) for 9/22/10:

 I said ""Spike Top" was posted on Friday because of the Monday price action that opened lower than Thursday's close. Bearish action should bode well for further corrective action, but as long as the uptrend line holds, the bull chart is intact".

In my daily cattle numbers on Tuesday; my pivot acted as resistance and was .25 from the actual high, my support was .27 from the actual low (but only .07 in open outcry).  

Cattle: Spot on numbers. Trade idea to take the sell signals only was a good one, and I want to do the same today risking .40 on the idea using a buy stop to protect.

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

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

 The weekly service is "Monday only" and comes out usually by Saturday morning so you can prepare for Sunday night and Monday's trade.

Weekly Service: 13 weeks for $129 total subscription fee.

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 (elec.) Daily Numbers & Trade Ideas for 9/21/10

Sep 21, 2010

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This report was sent to subscribers on 9/20/10 6:30 p.m. Chicago time to be used for trading on 9/21/10. Everything is done by Howard Tyllas, no program or black box.

December Cattle (elec.)

After the close recap on 9/21/10: My my pivot acted as resistance and was 100.85, .25 from the actual high, and my support was 99.47, .27 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 9/22/10 have already been sent to subscribers at 6:15pm. 

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102.65

101.95

------------100.85       Pivot 

  99.72                   

  99.47 XX        Key Uptrend Line Support (stops below)    

         

Trend                                        

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

Daily chart   ......   Up                  

Weekly chart .......Up                

Monthly chart....    Up      94.45 is the 200 day MA         

ATR 1.15                           Balanced 41%

cat 9 21 10

I continue to say "Uptrend line is key support at 99.40, recent high resists".  

December Cattle (elec.) for 9/21/10:

 "Spike Top" was posted on Friday because of the Monday price action that opened lower than Thursday's close. Bearish action should bode well for further corrective action, but as long as the uptrend line holds, the bull chart is intact.

In my daily cattle numbers on Monday; my resistance was .45 from the actual high, my pivot acted as support and was .32 from the actual low.

Cattle: Accurate support and helpful resistance at best. Bull chart with a bearish chart signal on Monday. Bull chart is strong but at longer term resistance. I can only take the sell signal today and would risk .40 using a buy stop to protect. 

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 9/20/10:

Cattle: Helpful numbers. Bull chart with resistances from the weekly and monthly chart compared to the uptrend line support. I can only trade this bull market without bias using the numbers to day trade with. I want to risk .35 on any trade idea.

December Cattle (elec.) for 9/17/10:

Cattle: Spot on numbers. Closing above all the bars on the daily chart and near their high of the day warrants expectations for follow through to the upside today. I want to trade without bias and risk .40 on a buy stop to protect.

December Cattle (elec.) for 9/16/10:

Cattle: Accurate numbers. I have the same thoughts and numbers as yesterday.

Results for 9/16/10 were:

Soybeans: My resistance was .03 from the actual high; my support was .01 ¼ from the actual low.

Corn:    My resistance was .02 ½ from the actual high; my support was .03 ½ from the actual low. 

Crude Oil: My resistance was .14 from the actual high; my support was .15 from the actual low.

S&P:    My resistance was 3.00 from the actual high; my support was 4.75 from the actual low. 

Gold:     My resistance was $3.00 from the actual high; my support was $2.90 from the actual low. 

Euro:    My resistance was .02 from the actual high; my support was .19 from the actual low. 

Bonds: My resistance was 9 from the actual high; my support was 8 from the actual low. 

Cattle:  My resistance was .17 from the actual high; my support was .12 from the actual low. 

December Cattle (elec.) for 9/15/10:

Cattle: Exact high and only .10 off the low. I want to continue to trade without bias.

December Cattle (elec.) for 9/14/10:

Cattle: Spot on numbers off .10 on support and .10 from the resistance numbers. Market failed miserably from the resistance number, but bulls managed to close higher for the day. Resistance now is well known now, and the uptrend line and gap below are support, we are in the middle. I want to trade without bias and risk .35 on a trade idea.

Results for 9/14/10 were:

Soybeans: My resistance was .01 1/2 from the actual high; my support was .02 1/4 from the actual low.

Corn:    My resistance was .03 3/4 from the actual high; my support was .01 1/4 from the actual low. 

Crude Oil: My resistance was .03 from the actual high; my support was .17 from the actual low.

S&P:    My resistance was 2.00 from the actual high; my support was 2.25 from the actual low. 

Gold:     My resistance was $5.90 from the actual high; my support was $3.80 from the actual low. 

Euro:    My resistance was .46 from the actual high; my support was .29 from the actual low. 

Bonds: My resistance was 14 from the actual high; my support was 12 from the actual low. 

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

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

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

The weekly service is "Monday only" and comes out usually by Saturday morning so you can prepare for Sunday night and Monday's trade.

Weekly Service: 13 weeks for $129 total subscription fee.

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 Soybeans Daily Numbers & Trade Ideas for 9/20/10

Sep 20, 2010

Top

This report was sent to subscribers on 9/18/10 5:30 p.m. Chicago time to be used for trading on 9/20/10. Everything is done by Howard Tyllas, no program or black box.

November Soybeans

After the close recap on 9/20/10: My resistance was 10.99 3/4, .00 1/4 from the actual high, and my pivot acted as support and was 10.72, .03 3/4 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?

Grain numbers for 9/21/10 have already been sent to subscribers at 2:00pm. 

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10.99 ¾                            Resistance

--------------10.72          Pivot    

10.54 ¼                            Support

 

  

Trend              

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

Daily chart   ....  Up                    

Weekly chart ... Sideways           

Monthly chart    Sideways   $9.61 is the 200 DMA

ATR 18 ¾          Extremely Overbought 93%  

soybean 9 20 10

Bracket line from 12/1/09 high is support now, uptrend line at $10.22 is key support. $11.78 1/2 was the front month high when the bracket line was made and acts as resistance as well as the top channel I just added. Monthly chart gives me the next resistance at $11.14 1/4. I added the uptrend line from the low of July which will provide key support, and will be in play sometime in the future.

November Soybeans for 9/20/10:

In my daily soybean numbers on Friday; my resistance was 11 1/4 from the actual high; my support was .03 ¼ from the actual low.

Grains: Spot on grain supports, and resistances were blown away. Funds bought 40,000 corn contracts and 7,000 soybeans it was estimated on Friday. Market continues to go up and will continue as long as the funds are willing to add to their positions. At some point in time the producers will sell crops to put income in their hands, and that is the only factor I can see to stop the advance until crops coming in can show what yields are. The yields will propel prices higher, or will shut the door in the bulls faces. For now the charts are bullish, momentum is totally in control of the bulls, and the market is climbing higher until sellers such as funds taking some profits off the table or producers selling stops it.

The fact that cash is not keeping up with futures is a divergence created by speculative buying in the futures markets. This is what happened in 2008, and eventually the markets should come in line, no matter if cash comes up to the futures, the futures come down to the cash, or a combination of both.

Soybean yields have been coming in big, but with corn making new highs, soybeans are compelled to go higher too, because there is a relation in feeding corn or soybean meal, and the fight for acreage between the two.

As I said on Thursday night when corn was sitting just above $5, the bulls smell bear blood, and by the time the night session ended the volume was almost 70,000 contracts! By the time the day session ended it was over 215,000 contracts electronically alone. The commitment of traders (COT) report for the week ending 9/14/10 showed they added only 10,000 contracts to 412,000, less than I had thought. Since Tuesday they bought around 60,000 contracts so it will be interesting to see what their position shows this week. They left their soybean position unchanged at 137,000 contracts, but nearly a record.

In 2008 crude oil went to $147, the stock market was on a 5 year rally, and the delayed plantings had the market thinking we would need to ration supplies. But the actual planted acres came in more than expected, weather improved greatly, and thoughts production and carryout would be adequate sent prices over the waterfall's edge. Of course when the equities market plunged that was the kiss of death for risk taking and commodity ownership.

Last week the bulls had cries of an early frost in the PRC and Canada, new all time highs in gold, equities rallying, $ weakness, and bull charts in their favor. Bulls continue to press yields under 160 bushels per acre and talk by many of 158. Ethanol still at profitable levels, and the market moving higher is the natural way to price in the perceived shortfall in production to ration usage through higher prices. Funds can also be in the mood to buy even more contracts even at these position record levels and high prices.

I am keeping in mind that October grain options (based on December contracts) expire this Friday and might want to sit on the $5 mark on Friday. If farmers come out and sell, and or funds take pause in their buying, we could see a shakeout correction. I think this should happen before the September 30th report, and it could be from a higher level near $5.42 when it happens. If that report adds on 100 to 150 million more bushels to stocks than what is expected, that could trigger massive exiting from long positions. Look at my comments about the Quarterly stocks report in my commentary on (9/17/10) USDA is forecasting a 2010/11 soybean carryout of 350 million bushels based on a record 44.7 yield. If it came in at 43 BPA we would have stocks of 230 million compared to the 2007/08 of 215 million.

Those are the statistics I am looking at for price direction, my charts are what I look at for price discovery. My resistance numbers are from weekly and monthly charts and I use them for places to take profits if long, and or a place to go short if looking to do so. My task as a trader is to make money, and with grains having fundamentals that are for me impossible to pin down at this time, leaves me in day trader mode which is the easier time frame to predict what the market will do and what prices will provide support and resistance. The higher we go the more I want to trade from the short side, but remember if I am wrong (meaning the numbers do not hold) I only lose $.04 in corn and $.06 in soybeans. My strategy to sell corn and soybeans with a known risk and no margin is losing money, and I will hold until the report on the 30th proves to exit this losing trade, or keep it. The losses in being wrong this strategy loses less as I get more wrong (market going higher) but since my strategy cost between $.10 and $.20 total, the loss is not much more than a day trade, and I still have until expiration to be right or exit for whatever it is worth when I no longer think so.

Producers have a much more complex situation than a futures trader when it comes to profits (or losses). They have a basis to deal with, adjustment to production size, and input costs forecasting next year's crop. But when it comes to selling no matter what, it is against the "CBOT board" price. This is what we all do, buy or sell the CBOT, and we try and risk a certain amount to make a certain amount. On any given day we have another chance to adjust our position accordingly, or manage a trade we have to protect profits or limit losses. Before option trading a producer would sell the futures and were done with it, and waited for the basis to improve before lifting the futures (buying back) and selling the "cash". With options there is a much better way because you can literally reflect your thinking in an exact option strategy that completely reflects what you think and want to do, and there is nothing else I know of that comes close to that. Does it have a cost? Yes, but the costs are completely known, and the costs give you the protection you want and the chance to make more money if the price goes up.

My producers for the most part have gotten back their crops and have... Subscribe Now!

The reality of what they, you, or I do is that at the time we do things, that is what we actually think at the time, and looking back and saying what we should have done is not reality. Everyone knows who to bet after the race is over, so thinking you knew something other than what you bet speaks for itself.

I am not surprised at grains rallying to these levels or above, but I did not think it would happen until after the 30th report and production is coming in smaller than expected. At some point of time a producer or speculator must sell, and when they do they should be happy with the price they locked in. If you are not happy because they go higher, and when they go below where you sold you are happy, then you have personal issues. You make a decision based upon risk reward, and producers make the same decisions but it is their income, their livelihood at stake, not just another trade idea that does not affect their income used to finance a speculative trading account.

The good news is that my producers are faced with windfall profits from their original hedge. It is one thing to achieve higher prices, it is another task to keep the profits obtained from it. Ask the producers who did nothing in 2008 and watched the market rally to unheard of windfall profits, and then watched them go below the cost of production and did nothing. This mindset of trying to sell the high of the year or more than what the farm next door gets is disaster because that is not what a speculator or producer should be focused on. In the feat of trying to sell for a high price, you are gambling that the price will not go down. If it does you will lose money.

The reason that my producers who were bullish (or bearish) could withstand the drawdown was because they had protection when it went to $3.44 on June 30th. Yes, less than 3 months ago we were there, do you know where they will be 3 months from now? I do not know right now. Now they are getting the money they were going after. They and even the bears who hedged are now finding themselves not hedged above $4.60 and are now faced with how to keep it. Just like any un-hedged crop, looking at prices and locking them in are 2 different things. I have always been in the camp of giving up a % of my profits to insure what I have made and continue to have the right to make more in doing so. My job as a trader is not to get every penny, but to have a plan and strategy to take out what I can. It is what I make or lose that is important, not what I did not make and left on the table.

Bullish speculators or producers are faced with the task of locking in profits and allowing for further gains without losing what they have already gained. I did this before there was options by reducing my position as the market went my way, so if they went back to where I started, I had locked in good profits along the way, and have a much smaller position than what I started with. Options came along and I found ways to remain in my position and even add on if I wanted, but pay a % of what I made for "protection". (I have traded options since their inception in Chicago 20+ years ago as a member trading in the pits for my own account)

Producers should ... Subscribe now!

Volatility is going up as is normal as the market goes higher (because now there is more room down to zero) and the market can and will do anything. My numbers give me a good idea where support and resistance is, and I use them to day trade my ideas as well as entering or exiting longer term trade ideas. I want to risk $.05 in corn and $.08 in soybeans on any day trade idea.   

November Soybeans for 9/17/10:

Results for 9/16/10 were:

Soybeans: My resistance was .03 from the actual high; my support was .01 ¼ from the actual low.

Corn:    My resistance was .02 ½ from the actual high; my support was .03 ½ from the actual low. 

Crude Oil: My resistance was .14 from the actual high; my support was .15 from the actual low.

S&P:    My resistance was 3.00 from the actual high; my support was 4.75 from the actual low. 

Gold:     My resistance was $3.00 from the actual high; my support was $2.90 from the actual low. 

Euro:    My resistance was .02 from the actual high; my support was .19 from the actual low. 

Bonds: My resistance was 9 from the actual high; my support was 8 from the actual low. 

Cattle:  My resistance was .17 from the actual high; my support was .12 from the actual low. 

Grains: Spot on numbers. This is getting good. Keeps going up and all my producers and I have no clue as to why the funds are allocating unheard of money at the corn market, and as I have said so many times before the funds will present opportunities at price levels that would not be reached without their participation. No matter if corn turns in the fundamentals needed to go higher or not as the crop comes in, they are giving producers and speculative short sellers an opportunity NOW to take advantage of. The fact their bet is for higher prices will prove to be justified if production is down, if not and yields are bigger you would never have seen these price levels if a bigger yield was known at this time. It could be buy the rumor sell the fact by the time we really start bringing it in about 3 weeks from now, but it could be from a much higher level than we are at now. This is the opportunity I am talking about. This also is another expression of mine when I say "I do not care what the reason is that gets a market to a price level, I want to exploit it".

My producers are happy.... Subscribe now!        When you are making money and you have no concrete reason why the market is rallying to price levels that were not thought possible, that is my kind of trade strategy. I knew from the first day I put on a badge that 99 out of 100 traders that watched the impossible happen, they went broke. When options came to the trading floor and I learned strategies that I could be wrong the market and still make money, which is what I want to do. So like now when the corn market is rallying past almost all of my producers and I thought could be reached, they make a windfall profit not the house of pain. I have always said in this service what my approach is and that wants to make trades that get the odds like what a casino does, and not be the player and try to beat the odds.   

Tonight the door was opened and the shorts have entered the "house of pain" since corn has hurdled the $5 mark. It sure looks like the funds are content to add to their position buying 4,000 contracts on Thursday. Market has been in extremely overbought conditions for most of the last 2 weeks and that tells me what you already know, relentless buying. Chart looks great above $5 and my next target for the bulls is $5.42. I would think profit taking of some kind will take place between $5 and $5.42 before the September 30th quarterly Grain Stocks report. June corn stocks reportedly fell a jaw dropping 288 million bushels (MB), but 3 months earlier on the March report corn stocks exceeded market guesstimates by 198 MB. I cannot wait to see the January 2011 report (highly important) because the January 2010 report pegged 2009 production 330 MB more than the trade estimates. Implications of feed usage with the dueling reports are another story. I just wanted to remind you why I am confused and have no idea what the actual fundamentals will come in at.

Bottom line for me is I do not mind being right for all the wrong reasons, I just want to make money. I can only be in day trader mode for now using the same risk stops. I prefer to take the sell signals. Long term known risk (put) option strategies are underwater, and for now look to remain that way. I do not mind when trades do not work, I have parameters that make it just another trade that did not work, but the risk of not having a plan that allows for the possibility of a significant drawdown, then you open the door and one day you will let a trade lose more money than you were willing to make if you were right. A loss of more than thought possible can happen (except known risk option strategies) because of an event causing a gap and loss of more than your stop price on the opening. On the other hand you can be right the market and willing to take a profit but the market opened at a much better price than your exit order because of a gap open and make more than expected.

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

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

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The weekly service is "Monday only" and comes out usually by Saturday morning so you can prepare for Sunday night and Monday's trade.

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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.

 

 

November Soybeans Daily Numbers & Trade Ideas for 9/14/10

Sep 14, 2010

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This report was sent to subscribers on 9/13/10 4:55 p.m. Chicago time to be used for trading on 9/14/10. Everything is done by Howard Tyllas, no program or black box.

November Soybeans

After the close recap on 9/14/10: My resistance was 10.40 3/4, .01 1/2 from the actual high, and my pivot acted as support and was 10.22 3/4, .02 1/4 from the actual low.

Results for 9/14/10 were:

Soybeans: My resistance was .01 1/2 from the actual high; my support was .02 1/4 from the actual low.

Corn:    My resistance was .03 3/4 from the actual high; my support was .01 1/4 from the actual low. 

Crude Oil: My resistance was .03 from the actual high; my support was .17 from the actual low.

S&P:    My resistance was 2.00 from the actual high; my support was 2.25 from the actual low. 

Gold:     My resistance was $5.90 from the actual high; my support was $3.80 from the actual low. 

Euro:    My resistance was .46 from the actual high; my support was .29 from the actual low. 

Bonds: My resistance was 14 from the actual high; my support was 12 from the actual low. 

Cattle:  My resistance was the EXACT actual high; my support was .10 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.

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10.40 3/4                                   Resistance   

--------------10.31 3/4            Pivot  

10.22 3/4                                    Support                             

 

  

Trend            

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

Daily chart   ....  Up                    

Weekly chart ... Sideways           

Monthly chart    Sideways   $9.61 is the 200 DMA

ATR 18               Balanced 60%  

november soybeans 9 14 10

I continue to say "Bracket Line from 12/1/09 high is resistance, uptrend line acts as support going forward".

November Soybeans for 9/14/10:

I said "New high for the run with a lower close bodes well for another down day to follow". Indeed that was the case on Thursday.

In my daily soybean numbers on Monday; my resistance was .12 1/4 from the actual high; my pivot acted as support and was .08 ¼ from the actual low (but was the exact low in open outcry).

Grains: Accurate corn numbers, not helpful soybean numbers except in open outcry where my pivot support held three 5 minute bars at mid day to post the exact low of the day. Corn market did test the gap at $4.88 ½ the entire day but for now held tough. Funds were reported to have bought 13,000 contracts on Monday, so their appetite for corn might not be over. I guess they know the crop is getting smaller and so is the carryover, and they certainly are putting money where their thoughts are. Funds bought 2,000 soybean contracts, but the market closed well off their high today. It looked like bean bears wanted to take them lower today, but corn, crude oil, and wheat were supportive.

Crop progress for corn slipped 1% to 68% G/E but last year we were at 69% at this time. Soybeans fell 1% to 63% G/E compared to last year at 68%, and the first slip backwards in 3 weeks.

For now the funds are in total control because of their willingness to add to their positions. Now you see again when I write "things do what they do until they do not do it anymore" applies to the corn market now. To say they are not worth this price or we will get a big crop is one thing, but managing time to see if in fact that is true is another. No good being right if you go broke first. Now no matter bull or bear, you should have a risk reward to what you do, and plan for anything no matter up or down.

I want to continue to be in day trading mode with the same risk and thoughts as on Monday.

Producers: When the unimaginable happens and you can make much more money than thought, this is a good thing and I consider it a winning lottery ticket. For most of my producers it is more like a gift because of their bumper crops. High prices and above average for their farm yields at the same time is a rare occurrence. It is not often that I have seen this and the US production even if less than thought is a great crop for most farmers. What some of my producers are experiencing is a basis not keeping up with the speculative futures market, and the divergence is either hurting them or forcing them into storing and selling later.

If you are bullish, you should think about rolling ........  Subcribe now!

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 9/13/10:

Grains: Spot on soybean numbers, corn numbers were helpful at best. The feature of this report was the corn estimate of 162.5 bushels per acre (BPA) from last month's forecast of 165 BPA. This knocked off 205 million bushels (MB), 40 more than the average trade guesses. Next year's corn carryover was lowered 196 MB to 1.116 MB. If yields continue to disappoint and come in at 160, that would drop carryout to about 950 MB. Bulls must be looking at even lower yields and larger exports which would drop stocks even more. They do have the fact that export sales are sizzling and at a record pace. On Friday though China cancelled 2.4 MB of their 11.4 MB commitments to import corn, but the market either overlooked this negative news or it tempered an even stronger day than was posted.

On the other hand soybeans added 50 MB from the August forecast and were 80 MB more than the average trade guesses. If the USDA yield estimate of 44.7 is realized, this would be a record crop for the 2nd year in a row. August guess was the same as last year's actual record of 44 BPA. If the hotter/drier August weather has reduced corn yields, I wonder if this will show up in soybeans. We might be seeing more pods now, but the bulls might be thinking that the pods will not fill as expected. USDA raised exports 50 MB for 2010/11 to 1.485 compared to 2009/10 estimated exports of 1.495. With the way China has been buying soybeans, I must allow for the possibility for even greater sales. But their cancelation of some corn commitments on Friday concerns me, which makes one more thing I am uncertain about. USDA lowered carryover only 10 MB to 350 MB but the trade was looking for a number of 300 MB or less.

Funds must have liked what they read and bought 18,000 more contracts on Friday, and this might be a clue that this rally is not "buy the rumor sell the fact". It looks like buy the corn sell the soybeans type of action. Charts back that with corn closing above the bracket line and targeting the physiological $5 benchmark, and soybeans failing to hurdle their bracket line is negative price action. The fact that they made a new high for the run and closed lower on Wednesday, set up another down day on Thursday. Friday's report was no help for the soybean bulls so technically and fundamentally there was nowhere to go but down. Corn chart though is ready to take out highs posted 1/5/10 on the weekly continuation chart of $4.80 3/4, and then attempt to fill the gap left from the week of 9/29/08 at $4.88 1/2.

I keep in mind that the market is pricing in lower yields, and the final verdict is unknown and can be more or less than expected. The fact a record long position held by fund managers and not end users is a risk at all times to the bulls because of profit taking or liquidation due to a change of outlook. For the week ending 9/7/10 the funds added 23,000 contracts to 402,000 contracts. For now they are in control and the only thing I can see for this week that could slow the price rise is increased farmer selling at these price levels.  As I have said before, uncertainty is in the bulls favor until combines bring in crops that verify what is out there. Just keep in mind that by late November they will be forced to liquidate or "pay up" to roll to the March contract which is $.13 more than the December.

Am I the only one who thinks that 402,000 contracts are equal to over 2 billion bushels of corn? If they are not going to use it, then at some point in time no matter when, they will need to liquidate some of that position, and who do you think is going to buy that much corn from them? The shorts that have the other side of the trade will buy back, except for the true hedgers who sold their crop that will not be buying back. Their share of the shorts will need to be bought back buy new speculative longs instead, or the longs will need to keep selling at lower prices until they discover what prices the buyers show up. Selling 2 billion bushels and even a portion thereof is not easy to do, unlike a 100 contract position that can be filled at 1 price on 1 trade. Their advantage of big money works in the short run and can squeeze shorts that might be right in the long run, but the funds will try to force them out now at a higher level by selling to the shorts who cannot tolerate losses past a certain amount. Nothing is certain at any time, because a meltdown in global equities would cause demand destruction that would greatly affect grains and risk taking in general.

I cannot predict more than I already have told you as far as the fundamentals and charts are concerned. My bias when prices are relatively high is to trade from the short side, but if fundamentals were more certain and warranted higher prices, I will want to be on board that plane, but to get on when I do not know if we have enough fuel to get where I want to go (higher), then I rather stay on the ground and wait to catch the next one.

With that being said, I want to continue to day trade with a bearish bias using the numbers but willing to take the buy signals when not in overbought conditions, and risk the same as I have been using on a stop. My long term known risk strategies selling soybeans and corn would be kept for now. The soybeans are a winner, and the corn is a loser right now.

Results for 9/10/10 were:

Soybeans: My resistance was .02 3/4 from the actual high; my support was .02 from the actual low.

Corn:    My resistance was .07 3/4 from the actual high; my support was .04 3/4 from the actual low. 

Crude Oil: My resistance was .30 from the actual high; my support was .30 from the actual low.

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

Gold:     My resistance was $3.20 from the actual high; my support was $1.30 from the actual low. 

Euro:    My resistance was .25 from the actual high; my support was .19 from the actual low. 

Bonds: My resistance was 1 from the actual high; my support was 7 from the actual low. 

Nat. Gas: My resistance was .025 from the actual high; my support was .015 from the actual low.   

Cattle:  My resistance was .20 from the actual high; my support was .25 from the actual low.  

 November Soybeans for 9/10/10:

Grains: Spot on corn numbers, accurate soybean numbers. I was really impressed with the way corn closed above the bracket line high. Confirmation will be if they close above it again today. I would have thought they would have backed off a little before the report as was the case in the overnight trade, but instead the funds bought 15,000 contracts in open outcry pushing them above key resistance levels. Playing chess, I would look at the board set up as this, they bought whatever was needed in the closing minutes to allow time to run out and give no chance to the bears to pull back. This also would accomplish setting off "stop close only orders" and take profits on some longs at the highs in doing so. It really does not matter, what matters is that it did close above resistance. 

No matter what the report says today, I am more interested in the way the market reacts rather than the content of the report, especially at these price levels. I have seen a bullish report open limit up but by the end of the day they were limit down. I will say for the 100th time, markets can and will do anything, being right still has the task of managing profits, but when wrong you must have a plan and the ability to execute it.

Funds and analysts know that 11 out of the last 12 years the September USDA production figures forecast has exceeded the average trade estimates by an average of near 140 million bushels. They are looking for that number to go to 11 out of the last 13 years with their huge position at stake. It does not matter what the fundamentals are, if there are more buyers than sellers the market will go higher and more sellers than buyers will push them lower, and that is the reason I trade price not fundamentals.  

With that being said I really cannot wait to see what the market does, and what the report had to say. I want to see a strong rally for my producers to be able to add money to their original hedges. If the market goes down I think December corn (CZ) will be well support at $4.45 1/2 and November soybeans (SX) at $10.

I will be sending my comments around 9am (30 minutes before open outcry begins) and will go into more detail tonight on the weekend edition for Monday's trade.

Lastly, it is not often where I have no clue as to what the report will show, and even no clue to how they will react to it. If I was playing chess against a new opponent it would be similar to not knowing what to expect on a report or the reaction to it, but after playing that person 50 games I would pretty much know almost everything, and knowing what to expect your opponent will do in reaction to what move you make is a major part of being successful in chess. Trading is similar to chess; you need to have a plan and strategy and the ability to carry it out, and the ability to make change in order to accomplish the goal of success. 

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

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

 

 

 

WASDE - 486 September 10,2010

Sep 10, 2010

WASDE - 486  September 10, 2010

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OILSEEDS:  U.S. oilseed production for 2010/11 is projected at 104.8 million tons, up 1.5 million from last month.  Soybean production is forecast at a record 3.483 billion bushels, up 50 million from last month based on an increase in the projected yield to a record 44.7 bushels per acre.  Production of peanuts and cottonseed are also raised this month.

Soybean exports for 2010/11 are increased 50 million bushels to 1.485 billion reflecting strong early season sales and a projected increase in global import demand, especially for China.  Soybean ending stocks are projected at 350 million bushels; down 10 million from last month as higher export demand more than offsets the increased supply.

Soybean exports for 2009/10 are projected at a record 1.495 billion bushels, up 25 million from last month reflecting strong shipments in the final weeks of the marketing year.  The increase is partly

offset with a lower residual, leaving ending stocks projected at 150 million bushels, down 10 million.  Other changes for 2009/10 include reduced use of soybean oil for biodiesel and increased soybean oil exports.  Season ending soybean oil stocks are projected record high at 3.21 billion pounds.

Prices for soybeans and products are all raised this month, supported by strong prices for corn and wheat.  The U.S. season-average soybean price range for 2010/11 is projected at $9.15 to $10.65 per bushel, up 65 cents on both ends of the range.  The soybean meal price is projected at $270 to $310 per short ton, up $20 on both ends of the range.  The soybean oil price range is projected at 37.5 to 41.5 cents per pound, up 1 cent on both ends of the range. 

Global oilseed production for 2010/11 is projected at 440.6 million tons, up 0.9 million from last month.  Global soybean production is projected at 254.9 million tons, up 1.2 million mainly due to a higher production forecast for the United States.  China soybean production is reduced 0.2 million tons to 14.4 million based on lower yields.  Global rapeseed production is projected higher as increased production for Canada more than offsets reduced crops for Russia and Ukraine.  Other changes include reduced peanut and cottonseed production for China, reduced cottonseed production for Pakistan, increased cottonseed production for Australia, and reduced palm oil and palm kernel production for Indonesia.

Global oilseed trade for 2010/11 is raised 3.8 million tons to 108.7 million.  China soybean imports are raised 3 million tons to 55 million, up from a revised 50 million in 2009/10.  Imports are raised to reflect increased protein meal consumption and higher soybean stocks, now projected to reach 15.5 million tons.  Global oilseed stocks are projected lower mainly due to reduced soybean stocks in the United States and South America.

WHEAT:  U.S. wheat ending stocks for 2010/11 are projected lower this month with higher expected world demand for U.S. wheat.  Strong early season sales and reduced supplies in EU-27, particularly of higher quality wheat, support an improved outlook for U.S. exports.  Wheat exports are projected 50 million bushels higher with larger expected shipments of Hard Red Winter, Hard Red Spring, and White wheat.  Projected ending stocks are lowered by the same amount to 902 million bushels.  At the projected level, stocks would remain the second highest in more than a decade.  The 2010/11 season-average farm price is projected at $4.95 to $5.65 per bushel, compared with $4.70 to $5.50 last month.

 

Global wheat supplies for 2010/11 are projected down 0.7 million tons as higher carryin mostly offsets a 2.7-million-ton reduction in world output.  Much of the offset is explained by Canada, where beginning stocks are increased 1.5 million tons, as reported by Statistics Canada, and production is increased by 2.0 million tons.  These changes mostly offset lower production in Russia and EU-27.  Production for Russia is lowered 2.5 million tons based on the latest harvest results for the drought-affected central growing areas in the Volga and Urals Federal Districts.  EU-27 production is lowered 2.4 million tons with the largest reductions for Hungary and Romania where heavy summer rains reduced yields.  Smaller reductions in a number of other member countries also reduce EU-27 production.  Although the reduction for Germany is small, persistent and heavy August rains have reduced supplies of high quality milling wheat.  Other production changes include a 0.3-million-ton reduction for Belarus and a 0.4-million-ton increase for Morocco.

World wheat trade for 2010/11 is raised with global exports projected 1.4 million tons higher.  Export shifts among countries largely reflect availability of supplies and increased competition from North America.  Exports are raised 2.0 million tons for Canada and 1.4 million tons for the United States.  Exports are also raised 0.5 million tons each for Iran and Kazakhstan.  A 0.5-million-ton increase in Russia exports reflects larger-than-expected shipments during early August, before implementation of the export ban on August 15.  These increases more than offset a 3.0-million-ton reduction for EU-27 and a 0.5-million-ton reduction for Australia.  EU-27 exports are lowered with reduced supplies and increased competition from Canada.  Logistical constraints are expected to limit exports from Australia.

World wheat imports for 2010/11 are raised with increases for Russia and Nigeria.  Imports for Russia are raised 1.4 million tons as imports from regional suppliers support domestic usage, particularly for feeding.  World wheat consumption is lowered 3.8 million tons with lower consumption in EU-27, Russia, and Kazakhstan outweighing increases for Pakistan, Canada, and Nigeria.  Wheat feeding is lowered 2.0 million tons for EU-27 with imported coarse grains expected to partly replace wheat in livestock and poultry rations.  Global ending stocks are projected 3.0 million tons higher with increases for EU-27, Canada, and Australia.  Ending stocks are lowered for Pakistan and Russia.

COARSE GRAINS:  Projected U.S. feed grain supplies for 2010/11 are lower this month with lower carryin and reduced production for corn and sorghum.  Beginning stocks for corn are projected 40 million bushels lower with higher 2009/10 corn use for ethanol and a small increase in exports.  Corn production for 2010/11 is forecast at 13,160 million bushels, down 205 million, but still the largest crop on record.  The national average yield is forecast at 162.5 bushels per acre, down 2.5 bushels.  The largest reductions in forecast yields are for the eastern Corn Belt, which account for more than half of the reduction in total output.

Domestic corn use for 2010/11 is lowered 100 million bushels with lower expected feed and residual use as higher prices trim feeding demand and the smaller crop reduces residual disappearance.  Projected exports are raised 50 million bushels with rising world demand for coarse grains, particularly corn.  U.S. corn ending stocks are expected to decline to 1.1 billion bushels, down 196 million bushels.  At this level, 2010/11 carryout would be the lowest since 2003/04.  Stocks as a percentage of total use would be the lowest since 1995/96.  The season-average farm price is projected at $4.00 to $4.80 per bushel, compared with $3.50 to $4.10 last month.

Other 2010/11 feed grains changes include lower projected ending stocks for sorghum and oats.  Sorghum production is forecast 7 million bushels lower.  Sorghum exports are raised 10 million bushels with stronger world demand for coarse grains.  Sorghum feed and residual use is lowered 10 million bushels.  Oats imports are lowered 10 million bushels with lower expected production in Canada.

Global coarse grain supplies for 2010/11 are projected down 8.7 million tons with reduced foreign and U.S. production.  Most of the foreign reductions this month are in EU-27 and FSU-12 countries.  A 10.3-million-ton reduction in world coarse grain production for 2010/11 is partly offset by larger corn beginning stocks for Brazil with a 1.8-million-ton increase in 2009/10 corn production.  Lower U.S. and EU-27 corn production account for more than half of the reduction in 2010/11 global coarse grain output.  EU-27 corn production is reduced 1.2 million tons with lower reported area and yields for France and Germany and lower reported yields for Italy, Austria, and Spain.  World barley production is lowered 2.0 million tons with reductions for Russia, EU-27, Belarus, and Morocco.  World oats production is reduced 0.9 million tons with lower production for EU-27, Canada, and Belarus.  Lower rye production in EU-27 and Belarus lowers world output 1.0 million tons. 

Global coarse grain trade is increased this month with U.S. corn exports raised 1.3 million tons.  A 0.5-million-ton reduction for EU-27 corn exports is offset by a 0.5-million-ton increase for Ukraine.  Corn imports are raised 2.0 million tons for EU-27 as corn partly replaces wheat in feeding.  Russia corn imports are raised 0.7 million tons helping to offset reduced supplies of feed barley.  Global corn consumption is lowered as reduced prospects for corn feeding in the United States and Ukraine more than offset higher expected corn feeding in EU-27, Russia, Mexico, and Canada.  Global corn ending stocks are projected 3.6 million tons lower.

RICE:  U.S. rice production in 2010/11 is forecast at a record 255.3 million cwt, up 9.4 million from last month due to both an increase in area harvested and yield.  Harvested area is estimated at 3.62 million acres, up 130,000 acres from last month and the second highest on record.  The average yield is estimated at 7,047 pounds per acre, up 8 pounds per acre.  Long-grain production is estimated at a record 191.8 million cwt, up 4.6 million from last month, while combined medium- and short-grain production is estimated at 63.5 million, an increase of 4.9 million. 

All rice beginning stocks for 2010/11 are raised 2.8 million cwt from last month to 36.7 million based on USDA’s Rice Stocks report released on August 27.  The import projection is reduced slightly based in part on the revised 2009/10 estimate and the recent trend of little to no growth in imports.  Domestic and residual use for 2010/11 is lowered 2.0 million cwt to 127.0 million based mostly on a reduction in the 2009/10 estimate. 

Exports for 2010/11 are projected at 119.0 million cwt, up 5.0 million cwt from last month, and up 8.8 million from the revised 2009/10 estimate.  Long-grain exports are raised 3.0 million cwt to 83.0 million, and combined medium- and short-grain exports are up 2.0 million to 36.0 million.  Larger exports are expected to the Middle East and the Western Hemisphere.  Ending stocks for 2010/11 are projected at 65.5 million cwt, up 8.7 million from last month, up 28.8 million from 2009/10, and the largest stocks since 1985/86.

The 2010/11 all rice season-average farm price is forecast at $10.30 to $11.30 per cwt, down 45 cents per cwt on each end of the range from last month compared to $14.00 per cwt for 2009/10.  The long-grain season-average farm price range is projected at $8.50 to $9.50 per cwt, down 50 cents per cwt from last month compared to $12.80 per cwt for 2009/10.  The combined medium- and short-grain farm price range is projected at $16.00 to $17.00 per cwt, down $1.00 per cwt on each end of the range from last month compared to a revised $17.70 per cwt for 2009/10.

Projected global 2010/11 rice supplies and use are both lowered from last month.  Global rice production is projected at a record 454.6 million tons, down 4.6 million tons from last month's estimate, mainly due to large declines for several countries including China, million, due mainly to a decrease in the early rice crop.  Both area and yield are reduced by early season drought in some areas combined with late-season flooding in other areas.  Indonesia’s 2010/11 rice crop is reduced 2.0 million tons to 38.0 million, based in part on a report from the U.S. Agricultural Counselor in Jakarta. 

Indonesia’s 2009/10 rice crop is also reduced—a reduction of 1.7 million tons to 37.1 million.  Indonesia’s yield growth has stagnated due to weather, pests, and disease problems.  Pakistan’s 2010/11 rice crop is reduced by 1.2 million tons or 18 percent to 5.3 million as severe flooding lowered both area and average yield. 

Global 2010/11 exports are reduced by 0.6 million tons to 31.0 million, mainly due to a reduction for Pakistan.  Global consumption is lowered by nearly 2.3 million tons, mainly due to decreases for China (-0.5 million) and Indonesia (-1.35 million).  Global ending stocks for 2010/11 are projected at 94.6 million tons, down 3.0 million from last month, but up slightly from 2009/10.  Stocks are lowered for China, Indonesia, Vietnam, and Iran, and raised for the United States.

SUGAR:  Projected U.S. sugar supply for fiscal year 2010/11 is increased 101,000 short tons, raw value, from last month, due to higher beginning stocks and production. Beet sugar production is increased 80,000 tons based on higher forecast U.S. sugarbeet production.  Forecast U.S. sugarcane production is little changed from last month.  Sugar use is increased 275,000 tons in line with the increase for 2009/10.

For 2009/10, U.S. supplies are increased 141,000 tons, due to higher production and imports.  Louisiana cane sugar production is increased 35,000 tons based on expectations of an early start to the 2010-crop harvest in September.  Imports are increased 105,000 tons, with 135,000 tons more from Mexico and high-tier imports more than offsetting increased shortfall under the tariff rate quota.  Total use is increased 120,000 tons to reflect the stronger-than-expected pace of deliveries in recent months.  Ending stocks are increased 21,000 tons.

For Mexico, 2010/11 ending stocks are lowered 64,000 metric tons, raw value, due to higher domestic use more than offsetting slightly higher beginning stocks.  Mexico=s 2009/10 beginning stocks are increased to reflect recently released government data, while increased domestic use and exports are nearly offsetting.

LIVESTOCK, POULTRY, AND DAIRY:  Total U.S. meat production forecasts for 2010 and 2011 are reduced slightly from last month.  The forecast for 2010 is reduced as lower pork and broiler production more than offset an increase in beef production.  The 2011 forecast is reduced as higher feed prices encourage cattle producers to keep cattle on forage longer and tempers pork, broiler, and turkey production gains.  USDA’s Quarterly Hogs and Pigs report will be released on September 24 and will provide an indication of sow farrowing intentions into early 2011.  Egg production forecasts for 2010 are adjusted to reflect a revision in second-quarter production but the 2011 forecast is unchanged.

Beef imports are reduced for 2010 and 2011 as imports have been lower than expected.  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.

Livestock and poultry prices for 2010 are raised but forecasts for 2011 cattle and hog prices are unchanged.  The broiler and turkey price forecasts for 2011 are raised slightly on expected tightness in supplies.  Egg prices for 2010 are forecast higher due to the recent spike in third-quarter prices, but the forecast for 2011 is unchanged. 

COTTON:  The 2010/11 U.S. cotton forecasts include higher production, domestic mill use, and exports relative to last month.  Production of 18.8 million bales is nearly 2 percent above last month, based on increases across all regions of the cotton belt.  Domestic mill use is raised to 3.6 million bales, reflecting recent increases in consumption rates and prospects for additional spinning capacity.  Exports are raised 500,000 bales to 15.5 million due to continued very tight foreign supplies.  U.S. ending stocks are now forecast at 2.7 million bales, 500,000 bales below last month.  If realized, both the stocks level and the stocks-to-use ratio of 14 percent would be the smallest since 1995/96.  The average price received by producers is forecast at 63 to 77 cents per pound, 2 cents above last month.  The midpoint of the interval, 70 cents per pound, would also be the highest price since 1995/96.

The aggregate world cotton 2010/11 forecasts are adjusted slightly from last month.  World production is raised marginally, as reductions for China, Pakistan, and Tanzania are more than offset by increases for Australia and the United States.  Consumption is reduced for Pakistan and others but is raised for India and the United States, resulting in a slight net reduction.  World trade is reduced, due mainly to a 1.5-million-bale reduction in exports by India resulting from the recent restrictions imposed by the government.  Lower exports by India are mostly offset by higher exports from Australia, the United States, and Brazil.  World ending stocks are about unchanged from last month.  The projected world stocks-to-use ratio of 38 percent is the lowest since 1994/95. 

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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.

 

 

 

 

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