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Grains have had a quiet week in front of Monday's Quarterly Grain Stocks report. But corn and wheat have quietly set up an interesting technical picture. Could corn and wheat be setting up for a rally?
On Monday the USDA will release Quarterly grain stocks figures. This report will shed light on old crop ending stocks, new crop beginning stocks and the strength of current demand. This report could certainly set the tone for grains for the next few months. So to a large extent the technical set ups in the grains markets may not mean much if the report is very bearish. But it is really interesting to see what the corn and wheat charts are doing in front of this report.
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Wheat is attempting to break out to the upside after sitting on lows for almost two months. Ideas that Brazil may have to be a big importer of wheat in the near future has helped pull wheat off lows. Now, it is certainly possible that wheat has another new leg lower coming, but the chart could also be setting up for a rally at this point. In the last few days wheat has 35 cents and is now running into major resistance. If wheat were to get some help from a bullish report it could break resistance and push higher.
Corn has not yet had a big rally off of lows. However corn could be in the process of putting in a longer term double bottom. Fundamentally it is difficult to build a strong case for the corn to rally into harvest, but at the same time the negative news is old news too. If Monday's USDA report is bullish for corn it could set up for a rally and possible even put in harvest lows. That is a big "if" though.
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December Corn Daily chart:
November Soybeans Daily chart:
December 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 $5.00 and soybeans near $12.00. 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 email@example.com
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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.