Aug 20, 2014
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February 2013 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.

Tight Stocks in Grains Take Center Stage in Delivery Period

Feb 28, 2013

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS 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.   

A strong first notice day highlights the tight stocks in old crop corn and soybeans.  There were zero corn, soybean or soybean meal deliveries this morning.  It seems that there could be commercials looking to source grain off the board.  On top of that corn and soybeans saw higher then expected export sales numbers adding to the bullish tone this morning.

Strong cash basis, good export sales and tight old crop stocks could have end users turning to the CBOT futures to get some of the grain they need.  Today was first notice day for the March contracts and there were no reported deliveries.  Once a futures contract is in a delivery period long positions can be delivered on beginning on first notice day.  When there are no deliveries, as we saw today, markets will sometimes continue to rally until deliveries are made.  Right now this may be the case.

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

Export sales numbers were also strong suggesting that last week's fear of South America being slow to move into position to export might be having more of an effect on buyers.  If this continues there will be growing concerns over already tight US grain stocks.

At this point I think grains are due for a bounce.  If you have followed anything I have written in the last 5-6 months you probably know that I have been bearish since August - September.  And, longer term I am still looking for lower prices, but I do think that we could have a healthy bounce from here.  At the very least I am advising clients to wait to add to hedges for the moment.  If the December corn makes new lows for the year I think we will have to get more aggressive, but in the mean time I would like to see if Dec corn can bounce 15-35 cents to sell better.  Stay tuned.

Sign up for our Morning Ag Comments: http://www.zaner.com/offers/?page=17

March Corn Daily chart:

March Soybeans Daily chart:

March Wheat Daily chart:

All this means that speculators should be looking for opportunities and producers need to look to lock up some prices while we have corn near $7.00 and soybeans near $14.00. 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 options / options-futures 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?ap=tseifrie

Futures, options and forex trading is speculative in nature and involves substantial risk of loss.  This commentary should be conveyed as a solicitation for entry into derivitives transactions.  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

Is December Corn Predicting a Rally?

Feb 26, 2013

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS 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.   

I feel like a broken record saying markets were mixed again today, but that has really been the story for weeks now.  It seems like when the soybeans are up the corn and wheat are down, and when soybeans are down corn and wheat are up.  So, what do we make of this?  I'm not sure there is much to take away from this aside from some seemingly small but potentially important observations.  Today's trade did not seem like much in the way of predicting market direction but December corn may have just given us a clue.

New crop corn has been under significant pressure since the beginning of December.  This has come from growing sentiment that a decent crop on this suppressed demand works out to big ending stocks and in turn sharply lower prices.  Drought bulls have had to give up the gun to some extent because of the wetter weather pattern (it is currently blizzard conditions outside my window).  And, South America has a big crop that will help bail out the tight world supplies.  But some of us have been talking about this and trading this for a while and our numbers have grown as the prices have continued to come down.  So, the question is when and where can we get a bounce even if it is just a bounce to sell?

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

From a technical perspective December corn may be telling us that this over due bounce could be starting soon.  There is a chance that the overnight lows in Dec corn may be the lows for a little while.  Today we had a technical event that could be predicting a near term bottom.

If December corn had made a new contract low today would have been called a key reversal.  But, because these were not new contract lows we have to say that December corn has a sweeping outside up day.  For my money I think we can look at this as having similar weight as a key reversal because this is the lowest December con has traded since June 22nd of last year.  So instead of new contract lows we made new eight month lows (to the day), and to me this carries almost as much weight.  Now it is important to note that  December was on its own in doing this, July did not make new lows last night, and that front months are typically used for technical traders but I think it is an interesting development that comes at an interesting time when a lot of guys are scratching their heads looking for a clue.

I certainly would like to get more corn hedged for next year as the prospect for a 2 billion bushel plus carry over could mean sharply lower prices but i would really like to see a bounce to sell higher new crop corn prices.  For now my plan is to wait to see if this almost key reversal can spark a rally before I sell any more new crop or 2014, 2015 ect...  If we break 550 again however I may have to get more aggressive.  Give me a call if you would like to talk about your marketing strategy or ideas for new crop and years to come.  Have a great day, and I hope the snow suits you well if your in it.

Sign up for our Morning Ag Comments: http://www.zaner.com/offers/?page=17

December Corn Daily chart:

All this means that speculators should be looking for opportunities and producers need to look to lock up some prices while we have corn near $7.00 and soybeans near $14.00. 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 options / options-futures 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?ap=tseifrie

Futures, options and forex trading is speculative in nature and involves substantial risk of loss.  This commentary should be conveyed as a solicitation for entry into derivitives transactions.  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

It's an Old Crop Soybean Thing

Feb 21, 2013

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS 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.   

Mixed markets again today as old crop soybeans (March - May) continue to try to rally while new crop beans (Nov and beyond), corn and wheat are under a good amount of pressure.  A surprise rain in Argentina covering most of the growing area and producing half an inch to an inch put a damper on a collective rally in the grains.  Now old crop soybeans are trying very hard to rally on their own while price action and chart action turn decidedly bearish for all other grains.

Grains as a whole seem very week at this point with the exception of old crop soybeans.  The weakness is coming from a lack of demand, prospects of a huge upcoming US crop, and a massive South American crop about to come on line.  It seems likely that corn, wheat and new crop soybeans could see lower prices between here and planting.  But why are the old crop soybeans so strong, and how long will it last?

South America has a huge soybean crop and is expected to bail the US and the world out of a tight situation, but they are sure taking their time with it.  Every year we have concerns about the sub par logistics in Brazil and Argentina.  Year after year we hear about trucker strikes, port worker strikes and multi mile long lines of trucks waiting to unload.  And, every year soybean prices rally and then miraculously soybeans start flowing out of South America.  I always find it interesting that South America has all these issues but a 60-80 cent rally sure has a way of fixing things.  Sometimes I wonder how much of these issues are exaggerated to coax better prices, or has it become a custom to rally the soybean market to reward / entice South America to sell their cash crop.  Either way there sure is a lot of incentive to get soybeans sold in a hurry.  Prices are very good right now and the outlook is nowhere near as bright.  So I would imagine that South America will figure out their issues faster then usual this year.

Sign up for our Morning Ag Comments: http://www.zaner.com/offers/?page=17

The strength in old crop soybeans will end as soon as Brazil gets more aggressive in shipping soybeans.  I have a feeling that well be very soon.  And when that happens there could be a sharp sell off in old crop soybeans as our exports will no longer be relevant.  But, the sell off might not just be limited to soybeans.  Whatever spill over strength that has been holding corn and wheat together will be gone and a flush out is possible.  Even today wheat closed at new lows for the move and produced a sell signal.  Corn also produced a fresh sell signal on a daily chart.  So I really believe that this recent rally in soybeans is a great opportunity to sell cash beans and get some hedge positions established for new crop.  It certainly is a good possibility that we have a weather rally to sell at some point during the growing season, but that sure seems like a long way off.  And even if there is a weather scare this summer where will we be rallying from ?  $1 - $1.50 lower?  It is going to take a very real and damaging weather issue to rally that much and it would be a major surprise to see that two years in a row.

However, with the potential for a summer weather rally in mind I am currently establishing hedge positions that put a floor in near current prices while still allowing for some upside potential and I am able to do it for what I would consider a very fair cost.  Give me a call or shoot me an email if you would like to hear more about it.  Either way, I think all grain producers need to be thinking about managing their risk rather then wishing for higher prices.

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

March Corn Daily chart:

March Soybeans Daily chart:

March Wheat Daily chart:

All this means that speculators should be looking for opportunities and producers need to look to lock up some prices while we have corn near $7.00 and soybeans near $14.00. 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 options / options-futures 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?ap=tseifrie

Futures, options and forex trading is speculative in nature and involves substantial risk of loss.  This commentary should be conveyed as a solicitation for entry into derivitives transactions.  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

Was it a Great Day to Buy Corn or Sell Soybeans?

Feb 19, 2013

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS 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.   

An unusual day in grain markets today as soybeans were sharply higher while corn and wheat were down.  It really was like soybeans were in their own little world today as they gaped higher and posted an upside breakout.  Corn and wheat on the other hand came very close to producing fresh new sell signals right above lows which would be quite a bearish development.  This sort of activity does not seem likely to persist even as we get further into the acreage discussion.  So, the question is are the soybeans predicting a rally for the grains, or was the weakness in corn and wheat suggesting that the soybean rally was a bull trap?

It would be easy for the soybean bulls to say - "look at how strong the soybeans were despite the weakness in corn and wheat", and it would be easy for corn or wheat bears to say - "look how week the corn and wheat was despite the strength in soybeans".  And for the most part they would all be right, however these sorts of disconnects or divergences typically are not of the long term variety.  So the real question here today is - Was it a great day to sell soybeans, or was it a great day to buy corn and wheat?  Time will tell, but looking at the action on the close it seems that at least for now the soybeans still have momentum to the upside and corn and wheat might very reluctantly follow.

Sign up for our Morning Ag Comments: http://www.zaner.com/offers/?page=17

Reports from the floor and the news wires were attributing the strength in soybeans to less then expected rain in Argentina and export interest.  The weakness in corn and wheat was blamed on a winter weather event here in the US and a lack of demand interest.  The interesting thing is that the less then expected rain in Argentina might have been more bullish for corn then for soybeans even thought the board certainly did not reflect that.  The bigger issue for soybeans right now is the annual "can Brazil get product to port" game.  The longer it takes them to get in the export game in a big way, the longer US exports stay relevant.  The next few days / weeks will show us how prepared Brazil is to move soybeans, but I have a sneaking feeling that at these prices they will surprise some by getting their act together quickly.  However, that certainly does not mean that we stop hearing about the horror stories.  Brazil likes when we get all excited about their logistical issues.  They get it sold and shipped just like they do every year, and they get higher prices in the mean time.

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

March Corn Daily chart:

March Soybeans Daily chart:

March Wheat Daily chart:

All this means that speculators should be looking for opportunities and producers need to look to lock up some prices while we have corn near $7.00 and soybeans near $14.00. 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 options / options-futures 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?ap=tseifrie

Futures, options and forex trading is speculative in nature and involves substantial risk of loss.  This commentary should be conveyed as a solicitation for entry into derivitives transactions.  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

Is the USDA Predicting a Farm Land Bubble Burst?

Feb 14, 2013

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS 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.   

Going back to the USDA Baseline Projections released on Monday there were some interesting numbers going out a few years and I want to take a deeper look at some of the figures.  First off it is important to note that these Baseline numbers are a wild shot in the dark.  Just like you or I the USDA has no crystal ball (or if they do it is really cloudy), and these particular numbers were established last November.  Case in point, last year the USDA was looking for a 1.8 billion bushel carry over for corn this year.  We all know what happened with that.  Even still, there are some interesting things the USDA is looking for over the next 10 year period.

First of all the USDA is very bearish for the coming growing season.  Even back in last November with the drought fresh in everybody's memory the USDA was looking at a 2 billion plus bushel ending stocks number for corn in 2013/2014.  They are also suggesting a $5.40 a bushel average farm price for corn.  These numbers do not jive for me.  I think that if we do end up with a 2 billion plus ending stocks number for corn this coming growing season we will see sharply lower prices in effort to buy back demand and cut back acreage.  Yes, I said it.  We could be one good growing season away from the market pushing for less acreage.  But, we have to grow it first and as we saw last year that can not be taken for granted.

What is extremely interesting is what the USDA is projecting going out 3-4 years.  The acreage numbers they are looking for in 2015/2016 are shocking to me, for two reasons.  First, it makes the USDA seem to be capable of forward thinking and second because it showed some understanding of basic economics.  Not to bash the USDA, but much of the time these numbers seem to be contradictory of what is actually going on in the market.  In this case they could be dead on.

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

For 2015/2016 the USDA is looking for 86 million acres planted for corn, 75 million acres for beans, 51 million acres for wheat.  This is a sharp reduction in acreage over all.  From current private estimates for 2013/2014 this would be almost a 13 million acre reduction in corn, a 5 million acre reduction in beans, and a 6 million acre reduction in wheat.  A total reduction of upwards of 24 million acres in 2 seasons!!!

So why is the USDA assuming such a drastic decline in acreage?  A big part of it is that they see sharply lower on farm prices for grains.  But that alone does not justify such a massive drop.  Is the USDA taking into account record high land sales?  Are they assuming that lower grain prices will not only cut out some "fringe" areas but also weigh heavily on farms in good areas that have just paid too much for land?  This might seem to be too big of a step in the USDA's analytical skill set, but it certainly is scary to look at.

In the end, these are again just a shot in the dark by the USDA.  Who knows what weather has in store for us, or maybe there will be huge strides in biofuels that will breed sharp increases in demand, or maybe South America is over run with rust or aphids.  The point is who knows?  Probably not the USDA.  But it has to make you think.  After all, what is the saying - "even a broken clock is right twice a day".

Sign up for our Morning Ag Comments: http://www.zaner.com/offers/?page=17

 

***One final note on the subject.  Two weeks ago at the Top Producer seminar there was a keynote speaker that when I saw him on the agenda I scratched my head and wondered why he was there and what he would talk about.  He is a professor at University of Chicago Economics and he had authored some books about freaky economics and spent a lot of time doing studies on inner city gangs and such.  As it turns out he was pretty entertaining, but had nothing to do with farming.  And then, they opened the floor to questions and one brilliant individual asked something like - "do you think there is a bubble in land value?".  He admitted that he knew nothing about the subject, however he went on to say that it would occur to him that a key sign that there is a bubble and that it is about to burst would be if there were people buying that had no business doing so.  Now, I am convinced he really knows nothing about the subject but what he describes is absolutely happening right now.  There are wall street types out there buying up land to make a quick buck and driving prices up.  Maybe he knows more about the subject then he thinks...

March Corn Daily chart:

March Soybeans Daily chart:

March Wheat Daily chart:

All this means that speculators should be looking for opportunities and producers need to look to lock up some prices while we have corn near $7.00 and soybeans near $14.00. 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 options / options-futures 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?ap=tseifrie

Futures, options and forex trading is speculative in nature and involves substantial risk of loss.  This commentary should be conveyed as a solicitation for entry into derivitives transactions.  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

Are Grains Headed to New Lows?

Feb 12, 2013

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS 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.   

It seems like every time I am out of the office for a few days the grain markets go down.  So, I have been instructed by many of my clients to live in my office for a while.  Actually, when I am here I pretty much do exactly that and I don't have any plans to go anywhere so maybe it is time to find some support.

Sign up for our Morning Ag Comments: http://www.zaner.com/offers/?page=17

Corn has now closed lower in eight consecutive trade sessions and has smashed 200-day moving average support even though the USDA reminded us of tight domestic stocks on last Friday's February report.  The bottom line is that the world cary over increased and there is potential of South American Imports to the US in the coming weeks.  The USDA also showed us a huge number in their baseline report that reminds us that we could be one good growing season away from a massive carry over number.  I intend to go into further detail and analysis about the USDA Baseline Projections in my next posting which will be for Top Producer Power Hour on Thursday, and I think I have some interesting points to talk about.

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

Soybeans have also been under significant pressure since the USDA report.  This is a surprise to many as the us carry over numbers were bullish at face value coming in below trade expectations.  The problem was/is that the world carry over increased on a massive South American crop.  Now, with weather looking good in most areas of Brazil and just wet enough in much of Argentina it seems that soybeans could continue to slide as we lead up to South American Exports coming on line.  Here too we could be looking at the possibility of not only loosing out on export business but we could end up as importers when all is said and done.  This would add a significant amount of soybeans to the balance sheet and bail the US and the World out of a tight stocks situation.

March Corn Daily chart:

March Soybeans Daily chart:

March Wheat Daily chart:

All this means that speculators should be looking for opportunities and producers need to look to lock up some prices while we have corn near $7.00 and soybeans near $14.00. 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 options / options-futures 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?ap=tseifrie

Futures, options and forex trading is speculative in nature and involves substantial risk of loss.  This commentary should be conveyed as a solicitation for entry into derivitives transactions.  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

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