This is a sample entry from John Payne’s newsletter, This Week in Grain, published on Tuesday December 08, 2015.
Here is the weekly podcast I do with Craig Turner of Turner’s take. You can get it on iTunes or your android device. Search for Inside Commodity Futures. We do it every Tuesday.
A FEW NOTES:
– WASDE is tomorrow. I don’t expect much of a carryout adjustment. There will be no changes to yield.
– For corn, the carryout is about the same as last year with stocks to use a little tighter, right above 12% where it was around 15% at times last year. That’s bullish historically but more bearish than it has been in years past. Bean carryout’s jumped massively after a VERY successful US harvest. Bean carryout’s were sub 5% two years ago, sub 10% last year. Right now they sit around 12%. I think that number gets tighter tomorrow as the latest RFS re-write (renewable energy bill) came in better than expected. Some are thinking the USDA will drop supply.
-I don’t want to be the guy who screams the world is ending, that’s not what I’m doing here. I just want to reiterate the massive opportunity in volatility that exists from the Fed announcement for interest rate policy on December 16th. I think the market is trading as if the hike already happened, pricing in a 25 bp hike with an outlook for more hikes in 2016. If that is the outcome NEXT WEDNESDAY, then I would look for prices to continue their slide. But if they don’t hike and they indicate keeping rates at zero for any extended period, watch out. The short cover from the massive short position hedge funds have put on in wheat, soybeans, crude oil, and gold will make your head spin. Dump the Powerball this month, I’d rather buy a few cheap calls on the upside in silver.
LOOKING FOR A REBOUND ENERGY TRADE? LOOK TO THE GAS PUMP
– If you happen to be looking for a rebound energy play, step away from the crude oil market for a second and look somewhere the fundamental picture is a little more rosy – GASOLINE. Cheap gasoline has folks back on the road in full force again. Right now, we can’t seem to stop pumping crude oil. Supply feels unlimited. Not so in gasoline. We can only refine so much every day, and we haven’t built a new refinery in years. Just a thought, take a look at the July contract. It gets you exposure through summer driving season. If you are an option trader, you probably need to play it shorter term and look to roll to July later, liquidity is an issue.
Subscribe to This Week In Grain
This Week In Grain - This Week in Grain (T.W.I.G.) is a weekly grain and oilseed commentary newsletter designed to keep grain market participants on the cutting edge, so they can hedge or speculate with more confidence and precision.
This Week In Grain includes an email newsletter subscription.
Futures Traders’ Guide to the WASDE
Designed exclusively for futures traders, this comprehensive guide will help you understand the USDA World Agriculture Supply & Demand Estimates For Corn, Soybeans and Wheat reports.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.