This is a sample entry from Brian Cullen’s email newsletter, The Cullen Outlook.
I am looking to get long the SOYBEAN market.
I will turn to the mini-contract which is 1/5 the contract size of the regular. This will allow us to build a position should we choose to add additional contracts as the trade progresses.
We have seen a retracement in the past 3 trading sessions of $1.55 (from a high of $16.91 on Sunday evening to a low of $15.36 during Wednesday’s trading session)
My colleague, John Payne, who writes a newsletter “This Week In Grains” made an interesting point:
“I believe beans have the most bullish fundamental set up right now. If demand stays constant, there is a real possibility we see beans at somewhere close to 20.00 before the harvest. Beans are usually made the last week in July/early August. If we get another round of crop progress reductions, then buying on dips would be recommended, as there isn’t much time for the progress to get there”
***Feel free to sign up for his complimentary analysis by clicking here***
What is important to consider is what has changed We still haven’t received any rain worth getting excited about. Also, Monday’s Crop Progress report showed continued damage to the existing crop.
This represents a 4% reduction in the good to excellent and a 5 % increase in poor to very poor. This is a very important time for soybeans as we enter the pod setting stage. With little to no moisture, things could get pretty bleak.
We have seen reports of an easing of temperature and possible rain in the forecast, but I believe the small levels that are expected will not be enough.
I like to be LONG soybeans but I don’t think it is necessary to put too much risk out there, so I choose the mini-contract. I look for this 1590’0 level to hold while risking 55 cents, and I think we will see a re-test of the 1660’0 level in the near future as we make another run to 1700’0.
BUYING the November mini-soybean contract at 1590.0 (GTC)…last trade 1603’0
- Risk will be the 1535’0 level ($550.00)
- Objective will be the 1700’0 level $1,100.00
(Initial margin for the mini-contract is $1,012.00)
Have a look:
STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A "LIMIT MOVE", IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
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.