Will USDA Reports Fix Grain Markets?
Feb 07, 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.
Grain markets have been very quiet in recent months. This could be in part due to the government shut down and lack of USDA reports. On Friday the USDA will release a slew of reports including some key data that was missed during the shutdown. Will this get things moving again?
Sign up for our Morning Ag Hedge newsletter! Sign up here: http://www.zaner.com/landing/ag_hedge_newsletter.asp
In January we missed a number of key USDA reports due to the government shutdown. The January WASDE, Quarterly Grain Stocks, Winter Wheat Seedings and the Crop Production and Annual Summary reports. This cluster of reports make the January release one of the most important of the year. Now we are set to get mostly caught up with the February release.
Through the holidays and into the new year grain markets have held exceptionally tight ranges. Part of the reason may be due to the lack of USDA data. Another key factor has been the uncertainty of the future of a trade deal with China. The trade deal may also be addressed in the near future. This could mean that grains markets may be setting up for a period of increased volatility. But which way?
The February reports will certainly contain a lot of data. Looking at the range of analyst guesses there seems to be fairly window of expectations. This could be a set up for a surprise. For most reports it is difficult to predict the USDA, but this one is especially hard due to the lack of data leading up to it. Even if the analysts are dead on this report could still be a bearish reminder of the large supply situation, especially for soybeans.
However, unless we get a shocking game changing number from the USDA the markets might not get a long-term direction from this report. While this report will be one of the most important reports of 2019 there is yet a bigger fish to fry. The trade deal with China has the potential to be a came change for agriculture in the US for years to come and the trade may need to wait for that before making any sustainable moves.
Just in! We have complimentary 2019 commodity reference calendars available. They are a little bigger than pocket sized and very useful if you follow markets. You can sign up for yours here - http://www.zaner.com/offers/calendar.asp (Shipping to the US only)
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 Corn 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 email@example.com
Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie
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.