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May 2012 Archive for The Ted Spread

RSS By: Ted Seifried, AgWeb.com

Ted is the Chief Market Strategist and Vice President in charge of the Zaner Ag Hedge Group and specializes in agricultural hedging employing various strategies using futures, futures spreads, outright options and option combinations. He believes it is paramount to be able to use different strategies to adapt to market conditions. Ted works with large to mid size grain and livestock producers and end users in North, Central and South America.

December Corn Falls Just Short of a Buy Signal Today

May 31, 2012

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.   

 

December Corn Falls Just Short of a Buy Signal Today

Despite rain falling on dry areas, heavy pressure in soybeans and outside markets December corn held up well today.  From a technical perspective the December corn was almost able to close above the previous 3 days highs and above the 20-day moving average.  This would have produced a buy signal and suggested a return to May's 550 highs.  Even though we did not see a buy signal today, the door is open for the possibility of a buy signal tomorrow.

From a fundamental perspective the new crop scenario could be turning slightly more bullish.  Hot and dry conditions at the end of last week caused a 5% drop in crop conditions.  And although overall the crop conditions are still good at 72% good to excellent, a 5% decline in a week is a big move and really underlines the stress that some areas are under.  We are currently getting rain in some of the areas in need, but the forecast for next week seems to be trending dryer again.  Also, some northern areas saw frost the last two nights and this could set up another drop in crop conditions despite getting needed rains.

It may be worth looking at buying September calls or a bull call spread either as protection against a short futures or short calls - long puts strategy, or as a speculative trade.

Call me if you would like to look at some hedge strategies for this year and next, or if you would like to know what I am doing as far as buying September corn calls.

CME Options On Futures: The Basics: http://www.zaner.com/offers/?page=9&ap=tseifrie

See December Corn Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line.  Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

When Does Weather Matter: http://www.zaner.com/offers/?page=6&ap=tseifrie

Please check out my Blog at: http://tedseifriedfutures.com/

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?rid=Seifried

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION

Planting Progress 5/29

May 29, 2012

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.   

 

Planting Progress 5/29

The USDA released the weekly Crop Progress report this afternoon which came a day late due to the Memorial Day holiday.  I hope everyone had a great holiday...  With hot and dry conditions at the end of last week, traders are looking closely at the effect that might of had on the condition of crops.  However it does look like we will see a cooler, wetter weather pattern for this week.

The USDA is reporting corn emerged at 92% as compared to 76% last week, 59% last year and 69% 5-year average.  Corn condition did take a hit from the hot and dry conditions late last week.  The USDA is reporting the corn crop at 72% good to excellent down 5% from last week at 77%.  However, the corn conditions are 9% better then last year which was at 63% good to excellent at this time.

See December Corn Daily chart:

Wheat numbers were mixed with the Winter Wheat crop condition declining 4% to 54% good to excellent compared to 58% last week and 35% last year.  Spring wheat is now 96% emerged compared to 86% last week, 36% last year, and 68% 5-year average.  Spring wheat conditions improved 5% to 79% good to excellent compared to 74% last year.

See December Wheat chart:

The USDA is reporting soybeans at 89% planted compared to 76% last week, 48% last year, and 61% five year average.  Soybeans are 61% emerged compared to 35% last week, 22% last year, and 30 % five year average.

See November Soybean Daily chart:

The reaction to this report could be slightly bullish for corn because of the 5% drop in the good to excellent category, however the crop still looks very good and it also looks like we have better weather coming.  Wheat could find a mixed reaction with winter wheat conditions falling and spring wheat conditions improving.  Here again though, both winter wheat and spring wheat conditions are good overall.  Soybeans had the least amount of skin in the game on this report as the USDA did not give us conditions numbers but the uber fast pace of soybean plantings and emergence should have a bearish tone.  It will be very interesting to see what the USDA says on the soybean crop conditions next week.

All this means that speculators should be looking for opportunities and producers need to look to lock up some prices while we have new crop corn in the $5.00 range and new crop wheat in the $6.90 range. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Please check out my Blog at: http://tedseifriedfutures.com/

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?rid=Seifried

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION

July Corn Taking Heat Today

May 24, 2012

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.   

 

July Corn Taking Heat Today

Old Crop July corn fell 21 1/2 cents today.  Add this to the list of bewilderments and head scratchers that have been abundant of late.  July corn, by all means, is supposed to be one of the most bullish fundamental set ups in the grains.  Yet, we have a falling export basis, poor export sales and the price action to prove it.  Reports that China was looking to buy corn just below yesterdays lows seem unfounded.  It seems that Brazil is undercutting our export offers and this is being helped by the strength in the US Dollar.  Corn exports are already falling well behind last years pace.  It seems we will need a weather scare to give corn some positive price action.

The drop in July corn is also especially concerning to next years marketing because the July-December spread (old crop - new crop) has come in dramatically.  It has gone from well over a $1.00 premium to the July to just 66 cents currently.  December Corn still has a growing season yet to go, but the old crop bullishness is certainly falling away for now.  This can also be seen as a reflection of a weakening basis.

Call me if you would like to look at some hedge strategies for this year and next.

See July Corn Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line.  Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Please check out my Blog at: http://tedseifriedfutures.com/

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?rid=Seifried

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION

Old Crop Grains Get No Love Today

May 22, 2012

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.   

 

Old Crop Grains Get No Love Today

Grains as a whole were under significant pressure today but old crop corn and beans lead the way.  You did not have to look far to find bearish news today as it was coming from all angles.  The bearish enthusiasm started off with last night's USDA NASS Crop Progress report showing better then expected corn crop conditions at 77% good to excellent and faster then expected soybean planting with 76% in the ground (compared to 42% on average).  The negativity continued through the night session as the trade began to once again worry about the situation in Europe as well as China's economy slowing down.  Through out the day today the US Dollar has gained strength, at times up over 60 points.  As I write this the US Dollar is up 57 and poised to post a new high close since early January.

On top of a bearish USDA Crop Progress report and bearish US dollar and bearish outside markets, we got a slightly cooler, wetter forecast for next week and this trend continued in the noon report.  Last weeks bullish excitement of this weeks warm and dry forecast quickly faded into thoughts of returning to a more normal weather pattern.

Worst of all, and likely the main culprit for the sharp weakness in old crop corn and soybeans, were the many rumors of china possibily canceling or delaying corn and soybean shipments.  There were even rumors of cargos being canceled and switched to South America.  This has so far not been confirmed, however we did see the Miss River basis drop 7 cents and Export basis drop 9 despite the sharp drop in futures prices.  So, sometimes the proof is in the puddin.

As negative as today was, do keep in mind that there is a relatively tight old crop balance sheet, especially in corn.  With huge acreage numbers, fast planting and the macro economic concern of a rising US Dollar, new crop corn is the bigger concern in my opinion.  Fact is, without a major weather scare we will likely have one of the largest ending stock numbers we have seen in recent history.

For me at least, the concept of buying some relatively inexpensive July Corn Calls may not be a bad idea, especially if they can be used as protection on short December or May calls.  Who knows, maybe China canceled orders today so they could buy corn and beans on sale tommorrow, but they wouldnt do that would they? 

Looking for pricing on new crop using options seems to be the way to go.  Feel free to give me a call if you would like to pick my brain on what I'm doing to help my clients protect their bottom line.

See July Corn Daily chart:

See July Soybeans Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line.  Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Please check out my Blog at: http://tedseifriedfutures.com/

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?rid=Seifried

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION

November Soybeans Struggle to Rally with Other Grains

May 17, 2012

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.   

 

November Soybeans Struggle to Rally with Other Grains

Old crop corn, old crop soybeans, and wheat all had a nice rally today.  November soybeans however settled well of its highs.  Here again, an ultra fast planting pace could be weighing on new crop pricing.  Also, a little hotter dryer pattern may be affecting wheat and to a small extent corn but soybeans should fair well.

Soybeans have worked hard to buy acreage away from corn since the March 30th USDA planting projections report and, the fast planting pace has some experts thinking that we could see a jump double cropped soybean acreage.  This could significantly loosen the tight ending stocks projections for next year.

See November Soybean Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line.  Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Please check out my Blog at: http://tedseifriedfutures.com/

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?rid=Seifried

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION

Corn Catches a Nice Bounce off of Lows

May 15, 2012

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.   

 

Corn Catches a Nice Bounce Off of Lows

July corn closed over 25 cents off of the recent low placed on Friday.  Pressure late last week came mainly due to good weather, fast planting and a bearish USDA report.  Last Thursday, in a surprise move, the USDA gave us an old crop corn balance sheet that saw a 50 million bushel increase in ending stocks.  This came as a surprise because none of the private estimates had the USDA raising ending stocks.  The USDA may have chosen to do this because they see an early planting as an indicator of a likely early harvest which could bring supply to the marketplace sooner then normal.  Regardless of the reason it seems that the USDA has drawn a line in the sand at 801 million bushels for the 2011/2012 carry over.

This could mean that we have seen the most bullish old crop USDA report for the rest of the current marketing season.  Also, with good weather and fast planting, bullish fundamental news events may be few and far between.  However, we still have China.  Today there were rumors of China buying circulating the floor and we saw a positive outlook come back into the market.  The other bullish factor out there is that even though we have the corn (at least the USDA says so) it seems that producers are holding tight for now.  As I took a poll this morning of my clients it came to find out that on average guys were holding 20% in the bin and not looking to sell soon.  This can an likely will be very supportive to basis and provide strength to the futures as well.  This could provide good selling opportunities on weather scares but, the dilemma is where will we be rallying from on a weather scare.  If good weather, a strong US dollar and weak outside markets break July corn into the lower $5.00 level then a $.40 rally on a weather scare doesn't do much good even with a strengthening basis.  I believe holding our current low ($5.72 in July corn) is key to holding and looking for a weather scare.  If that low is violated then it may be time to move some cash corn.

See December Corn Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line.  Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Please check out my Blog at: http://tedseifriedfutures.com/

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?rid=Seifried

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION

Pre USDA Report Thoughts

May 09, 2012

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.   

 

Pre USDA Report Thoughts

The trade is mostly looking for a bearish USDA monthly report tomorrow.  Grain markets reflect that as we have seen lower prices over the last week and a half.  However, the average trade guesses are looking for large changes compared to last months report and I wonder how willing the USDA will be to make any wide scale changes this month.  New crop supply is far from being determined and even acreage numbers will change dramatically from the USDA's current estimates.  Keep in mind that the USDA is most likely going to stick to their March 30 Planting Projections acreage estimates until they issue their own final plantings numbers on June 29.  And, the USDA may choose to hold off for now on making any major changes to the old crop balance sheet as well for the sake of wanting to get a better handle on how far we will have to carry old crop supplies as an early harvest would take significant pressure off of old crop ending stocks.

So, if we do see an unchanged or a small change report tomorrow the likely knee jerk reaction will be that it is not as bearish as we have factored into the market and we could get a bullish reaction.  But again, this would be based on the idea that we have spent the last week and a half pushing prices down in anticipation of a bearish report.  However, it could be argued that good weather along with a record planting pace and a negative turn in outside markets were the real driving factors in the price decline and not the report.  Ultimately, it looks like the dollar is poised to strengthen and it seems that speculators have been moving out of commodities with crude oil trading below $100 a barrel and gold under $1600 an oz for the first time in a while.  Couple this with fast planting and good weather and it could be difficult to get a sustained rally at this time.

*** I will be unavailable for comment after 10:30 tomorrow until Monday morning ***

See December Corn Daily chart:

See November Soybean Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line.  Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Please check out my Blog at: http://tedseifriedfutures.com/

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?rid=Seifried

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION

New Crop Corn Tests Recent Lows

May 03, 2012

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.   

 

New Crop Corn Tests Recent Lows

December corn came within a penny of the March $5.23 low, however managed to close only down 1 1/2 cents.  This could be the beginning of a triple bottom formation but, more likely, as we continue to knock on the door of new lows we could be set to take another leg lower.  A close below $5.23 could likely result in follow through down to the psychological $5.00 support, however strong technical support is not found until $4.80.

Nearly ideal planting conditions along with good forecasted weather continue to pressure new crop corn.  November Soybeans could have offered support to corn if the $14.00 level had been breached.  November beans failed to do this yesterday in dramatic fashion and posted an outside day reversal which could be a sign of a topping formation for soybeans.  Without support from an extended soybean rally or weather concerns, the weight of massive planting acreage estimates and record planting pace may be too great for December corn to hold the important $5.23 level.

See December Corn Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line.  Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Please check out my Blog at: http://tedseifriedfutures.com/

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?rid=Seifried

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION

New-Crop Soybeans Post a New High Close!

May 01, 2012

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.

New Crop Soybeans Post a New High Close!

November soybeans were able to post an 11½¢ gain today despite widespread pressure in grains as well as old-crop beans. The May soybean contract has been experiencing higher than expected deliveries, suggesting that near-term price rationing may not be necessary for now. However, new-crop soybeans have begun to take on a life of their own as concerns over next year's balance sheet continue. Huge corn acreage, as well as a record pace in planting, suggest that we could be looking at very tight ending stocks for the 2012-2013 marketing year.

The record planting pace could dissuade producers from switching many acres back to soybeans, as there is still ample time to plant corn. However, it does seem that price action in the last few weeks may have bought some soybean acres, and producers are looking to double-crop soybeans wherever possible. If the November soybean contract is going to embark on a new leg higher, it could produce another 50¢ to 70¢ upside potential, but it would need to happen in the next few trading days. November beans have tested the $14.00 level four times since the previous high close on April 2, and another failure at $14.00 could bring in massive technical selling. This situation will need to be monitored closely in the next few days.

See November Soybean Daily chart:

This means that speculators should be looking for opportunities and producers need to make sure they lock up prices that makes sense for their bottom line. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be interested in some of the strategies that I am currently using.

To my mind, there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent.

Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs.

Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Please check out my Blog at: http://tedseifriedfutures.com/

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?rid=Seifried

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURES PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION.

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