TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS ANDMAY 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.
As we get ready to kick off the 2017 Farm Journal crop tour the grain markets are still reeling from the surprise increase in soybean yields and higher than expected corn yields on the August USDA WASDE report. I have to say that I am very excited to be going on the tour for the first time, and after last Thursday's report I now feel like this is something I NEED to do. The crop tour is usually a pretty big deal for the markets, but this year might mean something different.
On the USDA's August World Agricultural Supply and Demand Estimates (WASDE) report the USDA shocked the trade by only slightly lowering the corn yield and actually raising the soybean yield. Based on the weekly crop conditions the trade was expecting a n almost 5 bushel an acre reduction in corn yield and a small decline in soybean yield. It seems somewhat impossible for the 60% good to excellent conditions and the USDA's projected yields to coexist. Either way the aftermath of the report sent corn, wheat and soybeans to new lows.
So now, the trade is not exactly sure what to think. Crop conditions and the USDA's estimates really seem to contradict each other. For the moment the trade has to trade what the USDA has given us. But it feels like a large portion of the trade is skeptical about the numbers the USDA has given us. Enter the 2017 Farm Journal Crop Tour.
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At least some of the trade is desperately looking for answers as to why crop conditions and the USDA have painted much different pictures of this crop. It seems the need for something to confirm or deny the USDA's estimates has never been higher. And there is not much in a better position to do so than the biggest crop tour of the year and one that has been consistently fairly accurate.
This year the Farm Journal Crop Tour seems to be in a position to have a big impact on the market. Who knows what we will find, but if things seem pretty close to the USDA's projections it will help justify the USDA and the lower prices we have seen in grains. If, on the other hand, things look much different that the state averages the USDA has for the key states the Tour will be on then that could foster even more doubt about the USDA estimates. In other words, all eyes on #FJTour17
We have complimentary 2017 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.Follow me on twitter @thetedspread if you like.
DecemberCorn Daily chart:
NovemberSoybeans 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
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.