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Hedging Corn and Soybeans

RSS By: Howard Tyllas, AgWeb.com

Howard Tyllas is currently a member of the Chicago Board of Trade and registered with the Commodity Futures Trading Commission as a floor broker and as a Commodity Trading Advisor.

Hedging Corn & Soybean and Trade Ideas for 11/2/12

Nov 04, 2012

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Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 36 years.

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This report was sent to subscribers on 11/1/12 3:25 p.m. Chicago time to be used for trading on 11/2/12.

December 2012 Corn

After the close recap on 11/2/12: My resistance was 7.63 1/2, .01 from the actual high, and my support was 7.36, the EXACT actual low.

December 2013 Corn

After the close recap on 11/2/12: My resistance was 6.43 1/2, .01 3/4 from the actual high, and my support was 6.33 1/2, .00 1/2 from the actual low.

All charts and numbers for 11/5/12 have already been sent to subscribers at 3:25 pm .

                                            
December 2012 Corn    

                                        
7.73 ¼ FG                 ($7.80 Downtrend Line Resistance)            
7.69                                           
7.63 ½
-----------7.52 ½             Pivot        
7.41 ¾                    
7.36                  
7.32 ¼ XX         

          
5 day chart....         Up from last week same day                                                            
Daily chart   ...       Down                     
Weekly chart ...     Up                   
Monthly chart ....  Up                      6.45 is the 200 DMA
ATR 13 ½                                               Balanced 61%

For 11/2/12: Downtrend line at $7.80 is resistance, $7.32 ¼ is key support.             

In my daily December 2012 corn numbers on Thursday my resistance was .00 ¼ from the actual high; my support was .04 ½ from the actual low.                   

December 2013 Corn         

6.47
6.43 ½                                
-----------6.38 ½          Pivot 
6.33 ½                         near Uptrend Line Support                           
6.30 ½                    
         

5 day chart....         Up from last week same day                                                            
Daily chart   ...       Sideways                    
Weekly chart ...     Up                   
Monthly chart ....  Up                     5.84 is the 200 DMA
ATR 8 3.4                                              Balanced 71%

                                      

For 11/2/12: I continue to say "Daily numbers are resistance now, uptrend line at $6.35 is strong support, and then $6.20".             

In my daily December 2013 Corn  numbers on Thursday my resistance was .02 from the actual high, my pivot acted as support and was the EXACT actual low.                    
 
1/2/12:

Grains: All soybeans could do was rally to get us back almost where we were last Friday on settlement. The last 3 days of last week were the only times in the last 5 weeks to close above $14.60, and Thursday's rally sold off from near last week's high. Not exactly a bull market, more like the market I have been describing as a sideways market waiting for more unknowns to become known. I am saying that it will be difficult to take out resistances, same difficulty it was to take the supports of my chart parameters. They could not take out supports; I think the market will not be able to take out resistances either. That is the same as what I have been saying, the market will continue to rotate up and down between chart parameters until January unless weather in SA turns adverse.   

December corn struggled to maintain the gains as the day wore on, and now struggles to maintain the gain for this week, after rallying to $.00 ¼ from my resistance number. Closing lower bodes well for another down day to follow on Friday. Nothing needs to be done, if the market rallies from here you will have more windfall profits, and if it breaks down all my producers have $2 protection for the most part. $8/$7.50 or higher put spreads are not close to their intrinsic value (in the money value), and with 3 weeks remaining that will start to change, options spreads in the money will gain more value, out of the money will lose more value.

I expect us to just sit here and be bored; if it goes down we are fully covered, and if it goes up we will make more income. The alternative to our hedge is having unhedged grain that is $7.50, and become a gambler penny for penny up and down. The days the market is sharply higher I am sure the unhedged farmer is a pleasure to be with, but when the market is sharply lower... just ask his wife. Do not let the market dictate your mood swings, be in control, and risk what you feel comfortable with on the ideas you have, using our strategy that controls risk. Even if you do nothing, you have a chance to update and reflect your current thoughts on every "roll" before expiration.      

You can always reflect your bullishness or bearishness, and you now know many ways to reflect it, and you also have the ability to compare more than one way of doing it, like sell a call or spread, or buy a put spread, or both to reflect bearishness. With some option knowledge I say "OPTIONS DO NOT TELL YOU WHAT TO DO, BUT IF YOU HAVE A CONVICTION NO MATTER BULLISH, BEARISH, OR NEUTRAL, IT IS EASY TO SELECT THE STRATEGY AND STRIKE PRICES THAT REFLECT EXACTLY WHAT YOU THINK".

I want to trade the market without bias and risk only $.04 in corn and only $.06 in soybeans on any idea using a stop to protect.    

1/1/12: I went to vote today; there is an old saying in Chicago, "vote early and vote often".

Grains: My premise for a corrective bounce to the upside held true, and people did buy back many of the $8.30 and $8.50 calls and sold a few $8 calls to pay for them. Now producers have bullets in their gun just in case they see any bulls come into their sights at the gap of $7.73 ¼ and the downtrend line at $7.80, or the gap at $16.01 in November soybeans. If we get near those levels before or after the report next week, I would not hesitate to sell some calls back to add income. There just is no reason before the January report to carry these market higher than that. 

I am reluctant to think we can rally to current resistances, but the chart looks 50/50 it can do it. I would rather see it get the rally out of the way, get some calls sold, and then I do not care if it breaks down once again towards testing supports again. I would like it even more if we can rally past the strong resistances we are using, especially my producers who are bearish but in position now to make even more income if we do rally. Who does not like to make money when you are wrong the market? I expect to make money when I am right, but I really like making money when I am wrong!

10/31/12: Grains: Just about all December corn options closed lower as well as most December soybean options such as the $16 call closed down $.01 1/8. This tells me that for now, soybeans are not expected to get back to $16 in the next 3 ½ weeks until expiration. Since they are worth half or less than what it was sold for a few days ago when rolled from November, I would like to buy some of them back as a cheap way to get long, with the intentions if it rallies to sell it back. Everyone has been selling premium and rightly so, but when there is not much left like the December corn options that are $.01 or less now, I want to buy them back, sell fewer calls just above the put owned, to collect what I paid to buy them back, keeping all premium originally sold.

Bottom line: There is too much time for too little reward without making an adjustment. Next Friday is the November report but I want to free up some calls this week, first notice day in November soybeans is today and can move the market, also it is the end of the quarter and funds get paid based on equity on the close today. Also, crop insurance is pegged today, and my quick glance is $7.50 corn and $15.40 soybeans which would make people who took out the most crop insurance will make out well even without a crop at all. 

The market has stabilized the last 4 weeks and bears have not been able to take out the supports, so since markets "breathe", the next breath would be to "inhale" higher and test the resistances once again, even though resistances are now at lower levels than the bulls would like to think. I want to trade the market without bias and risk only $.04 now in corn and only $.06 in soybeans since the ATR's continue to come down.

10/30/12: Grains: November soybeans gave back all of last week's gain and then some. December corn did hold my strong support number of $7.32 ¼, but if that goes look for deeper losses. December 2013 has a strong uptrend line support at $6.31 now, but $6.20 is significant and acts like Dec 2012 $7.32 ¼. Friday's settlements are now resistances.   

I think the market is being rationed at today's prices, and that is the reason we are trading sideways inside my parameters, and holding up here where I still consider this to be a high price for current known and unknown fundamentals. The what if's remain in place for the future like they always do, but that should not be comforting to the bulls as they watch prices under pressure, and if my support numbers at the gaps of $14.74 ¾ (SX) and $7.04 and $6.74 ¾ (CZ) go, blood will be on the street as lower prices will be forced by people who realize the losses they just endured and face much more without a plan or worse yet, no risk control. If those gaps go, once again the market will have produced bankruptcies from people without risk control who will utter the words "I never thought that it could go down so much", and have no plan which means they never had control of themselves, but they expected to be able to control price.  

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

The markets covered daily are Soybeans, Corn, and S&P's.

HowardTyllas Daily Numbers & Trade Ideas cover 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

HowardTyllasDaily Numbers & Trade Ideas $ 199.00

If clicking on the above link does not work please copy and paste the following in your browser:

https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=D5MG7VPCUWW2N

 

Howard Tyllas

Put yourself in a position to make money, use the daily numbers service!

Email: dailynumbers@futuresflight.com
http://www.futuresflight.com/

Tel.1-312-823-9189

Disclaimer: No guarantee of any kind is implied or possible where projections of future conditions are tempted. Futures trading involve risk.In no event should the content of this be construed as an express or implied romise, 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.

Sign up: Free Learn a better way to hedge for farmers

Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 36 years.

Want to know

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

This report was sent to subscribers on 11/1/12 3:25 p.m. Chicago time to be used for trading on 11/2/12.

December 2012 Corn

After the close recap on 11/2/12: My resistance was 7.63 1/2, .01 from the actual high, and my support was 7.36, the EXACT actual low.

December 2013 Corn

After the close recap on 11/2/12: My resistance was 6.43 1/2, .01 3/4 from the actual high, and my support was 6.33 1/2, .00 1/2 from the actual low.

All charts and numbers for 11/5/12 have already been sent to subscribers at 3:25 pm .

                                            
December 2012 Corn    

                                        
7.73 ¼ FG                 ($7.80 Downtrend Line Resistance)            
7.69                                           
7.63 ½
-----------7.52 ½             Pivot        
7.41 ¾                    
7.36                  
7.32 ¼ XX         

          
5 day chart....         Up from last week same day                                                            
Daily chart   ...       Down                     
Weekly chart ...     Up                   
Monthly chart ....  Up                      6.45 is the 200 DMA
ATR 13 ½                                               Balanced 61%

For 11/2/12: Downtrend line at $7.80 is resistance, $7.32 ¼ is key support.             

In my daily December 2012 corn numbers on Thursday my resistance was .00 ¼ from the actual high; my support was .04 ½ from the actual low.                   

December 2013 Corn         

6.47
6.43 ½                                
-----------6.38 ½          Pivot 
6.33 ½                         near Uptrend Line Support                           
6.30 ½                    
         

5 day chart....         Up from last week same day                                                            
Daily chart   ...       Sideways                    
Weekly chart ...     Up                   
Monthly chart ....  Up                     5.84 is the 200 DMA
ATR 8 3.4                                              Balanced 71%

                                      

For 11/2/12: I continue to say "Daily numbers are resistance now, uptrend line at $6.35 is strong support, and then $6.20".             

In my daily December 2013 Corn  numbers on Thursday my resistance was .02 from the actual high, my pivot acted as support and was the EXACT actual low.                    
 
1/2/12:

Grains: All soybeans could do was rally to get us back almost where we were last Friday on settlement. The last 3 days of last week were the only times in the last 5 weeks to close above $14.60, and Thursday's rally sold off from near last week's high. Not exactly a bull market, more like the market I have been describing as a sideways market waiting for more unknowns to become known. I am saying that it will be difficult to take out resistances, same difficulty it was to take the supports of my chart parameters. They could not take out supports; I think the market will not be able to take out resistances either. That is the same as what I have been saying, the market will continue to rotate up and down between chart parameters until January unless weather in SA turns adverse.   

December corn struggled to maintain the gains as the day wore on, and now struggles to maintain the gain for this week, after rallying to $.00 ¼ from my resistance number. Closing lower bodes well for another down day to follow on Friday. Nothing needs to be done, if the market rallies from here you will have more windfall profits, and if it breaks down all my producers have $2 protection for the most part. $8/$7.50 or higher put spreads are not close to their intrinsic value (in the money value), and with 3 weeks remaining that will start to change, options spreads in the money will gain more value, out of the money will lose more value.

I expect us to just sit here and be bored; if it goes down we are fully covered, and if it goes up we will make more income. The alternative to our hedge is having unhedged grain that is $7.50, and become a gambler penny for penny up and down. The days the market is sharply higher I am sure the unhedged farmer is a pleasure to be with, but when the market is sharply lower... just ask his wife. Do not let the market dictate your mood swings, be in control, and risk what you feel comfortable with on the ideas you have, using our strategy that controls risk. Even if you do nothing, you have a chance to update and reflect your current thoughts on every "roll" before expiration.      

You can always reflect your bullishness or bearishness, and you now know many ways to reflect it, and you also have the ability to compare more than one way of doing it, like sell a call or spread, or buy a put spread, or both to reflect bearishness. With some option knowledge I say "OPTIONS DO NOT TELL YOU WHAT TO DO, BUT IF YOU HAVE A CONVICTION NO MATTER BULLISH, BEARISH, OR NEUTRAL, IT IS EASY TO SELECT THE STRATEGY AND STRIKE PRICES THAT REFLECT EXACTLY WHAT YOU THINK".

I want to trade the market without bias and risk only $.04 in corn and only $.06 in soybeans on any idea using a stop to protect.    

1/1/12: I went to vote today; there is an old saying in Chicago, "vote early and vote often".

Grains: My premise for a corrective bounce to the upside held true, and people did buy back many of the $8.30 and $8.50 calls and sold a few $8 calls to pay for them. Now producers have bullets in their gun just in case they see any bulls come into their sights at the gap of $7.73 ¼ and the downtrend line at $7.80, or the gap at $16.01 in November soybeans. If we get near those levels before or after the report next week, I would not hesitate to sell some calls back to add income. There just is no reason before the January report to carry these market higher than that. 

I am reluctant to think we can rally to current resistances, but the chart looks 50/50 it can do it. I would rather see it get the rally out of the way, get some calls sold, and then I do not care if it breaks down once again towards testing supports again. I would like it even more if we can rally past the strong resistances we are using, especially my producers who are bearish but in position now to make even more income if we do rally. Who does not like to make money when you are wrong the market? I expect to make money when I am right, but I really like making money when I am wrong!

10/31/12: Grains: Just about all December corn options closed lower as well as most December soybean options such as the $16 call closed down $.01 1/8. This tells me that for now, soybeans are not expected to get back to $16 in the next 3 ½ weeks until expiration. Since they are worth half or less than what it was sold for a few days ago when rolled from November, I would like to buy some of them back as a cheap way to get long, with the intentions if it rallies to sell it back. Everyone has been selling premium and rightly so, but when there is not much left like the December corn options that are $.01 or less now, I want to buy them back, sell fewer calls just above the put owned, to collect what I paid to buy them back, keeping all premium originally sold.

Bottom line: There is too much time for too little reward without making an adjustment. Next Friday is the November report but I want to free up some calls this week, first notice day in November soybeans is today and can move the market, also it is the end of the quarter and funds get paid based on equity on the close today. Also, crop insurance is pegged today, and my quick glance is $7.50 corn and $15.40 soybeans which would make people who took out the most crop insurance will make out well even without a crop at all. 

The market has stabilized the last 4 weeks and bears have not been able to take out the supports, so since markets "breathe", the next breath would be to "inhale" higher and test the resistances once again, even though resistances are now at lower levels than the bulls would like to think. I want to trade the market without bias and risk only $.04 now in corn and only $.06 in soybeans since the ATR's continue to come down.

10/30/12: Grains: November soybeans gave back all of last week's gain and then some. December corn did hold my strong support number of $7.32 ¼, but if that goes look for deeper losses. December 2013 has a strong uptrend line support at $6.31 now, but $6.20 is significant and acts like Dec 2012 $7.32 ¼. Friday's settlements are now resistances.   

I think the market is being rationed at today's prices, and that is the reason we are trading sideways inside my parameters, and holding up here where I still consider this to be a high price for current known and unknown fundamentals. The what if's remain in place for the future like they always do, but that should not be comforting to the bulls as they watch prices under pressure, and if my support numbers at the gaps of $14.74 ¾ (SX) and $7.04 and $6.74 ¾ (CZ) go, blood will be on the street as lower prices will be forced by people who realize the losses they just endured and face much more without a plan or worse yet, no risk control. If those gaps go, once again the market will have produced bankruptcies from people without risk control who will utter the words "I never thought that it could go down so much", and have no plan which means they never had control of themselves, but they expected to be able to control price.  

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

The markets covered daily are Soybeans, Corn, and S&P's.

HowardTyllas Daily Numbers & Trade Ideas cover 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

HowardTyllasDaily Numbers & Trade Ideas $ 199.00

If clicking on the above link does not work please copy and paste the following in your browser:

https://www.paypal.com/cgi-bin/webscr?cmd=_s-xclick&hosted_button_id=D5MG7VPCUWW2N

 

Howard Tyllas

Put yourself in a position to make money, use the daily numbers service!

Email: dailynumbers@futuresflight.com
http://www.futuresflight.com/

Tel.1-312-823-9189

Disclaimer: No guarantee of any kind is implied or possible where projections of future conditions are tempted. Futures trading involve risk.In no event should the content of this be construed as an express or implied romise, 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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