Will Soybeans Ever Break the Range?
Feb 21, 2019
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.
After a three-day weekend, soybeans looked like they wanted to break out of the range to the downside on Tuesday. We edged lower on Wednesday before reversing and ending positive on the day. Good news regarding a possible trade deal sent soybeans higher on Thursday and now we are sitting right back in the middle of the range. What now?
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On Tuesday soybeans seemed to be frustrated by lack of positive news on the trade front after the American delegation visited China. Also, over the holiday weekend China recalled some pork dumplings on fears of African Swine Fever contamination sparking fears over Chinese pork demand and therefore soybean demand. In the meantime, trade talks continued on US soil.
Early Thursday morning news agencies started to break news that the US and China had come to a Memorandum of Understanding on many of the key trade issues such as closing the trade gap, IP and IT and enforcement. One news agency reported that part of this deal would include additional purchases of $30 billion in US agriculture per year. It was not specified how this would be allocated or when it would start.
This could be very friendly news for the soybean market, but soybeans only managed modest gains... for now. The details of this deal might have a huge impact on markets.. If China doesn't buy soybeans for delivery this year it could leave us with still a very large carry over and markets could actually sell off. On the other hand, if China chooses to build state reserves and takes delivery of soybeans asap this could be vey bullish for markets. So it seems... Back to the range for now until we know the details.
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Give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action. Ted Seifried - (312) 277-0113. Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit. Find me on twitter - @thetedspread
March Soybeans Daily Chart:
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 firstname.lastname@example.org
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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.