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This Week in Grain – 9/19 Morning Update

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This is a sample entry from John Payne’s newsletter, This Week in Grain, published on Monday September 19, 2016.

Check out my newest offering for readers of TWIG, a morning audio breakdown of the overnight trade and a preview for the day ahead. This will be available via podcast soon, but today just click on that link and listen to my smooth silky voice as those good Monday morning vibes wash over you…..that’s the idea, I hope it sounds more like than nails on a chalk board. I’m sure you will let me know. I try to keep it around 5 minutes, today I go about 11 minutes as running through the schedule takes a little more time. I write this for you, the consumer so please let me know if you want something included in there.

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The schedule for this week is somewhat slower in grains, relative to week’s past. But the important data points may take on more significance as the harvest gets into full gear.

  • FOMC week! Wednesday we get Janet Yellen and her take on the economy and interest rate hikes. She saw the Fed hiking 4 times this year when she spoke back in January, so far we’re still waiting on #1. The trade has a small chance of a hike priced in, but most I read are expecting another “can kick” until after the election. This should be bullish commodities in a vacuum, especially if Japan CB and Euro CB (they both will address the market this week) would come off their uber-easy rate stances.
  • Harvest gets underway across the US. Corn harvest has been underway for most in the southern regions, but the bulk of the northern belt should get started this week, weather permitting. So far, the corn harvest has come in below where most saw it in 2014 when yields were just above 170. I expect the areas that haven’t begun shelling yet (northern Iowa, Minnesota, Wisconsin, N. Illinois) to see massive yields and beat the 2014 season. But the question remains, can we get up to 174+? I don’t see it for corn but I think soybeans can. Here are the two satellite companies I follow.
    • TellusLabs Kernel: 171.8 for corn (trending sideways)/ 51.7 for beans and trending higher.
    • Descartes Labs: 170.4 (trending sideways)/ 48.3 (trending sideways)
    • Descartes has been consistently below USDA and Kernel all season.
  • COT data remains similar
    • Corn: Specs remain near record short but longs have come in and are almost 30000 over where they were 6 weeks ago (176k vs 148 k ). Longs remain near decade lows in corn.
    • Beans: Spec short position is almost nonexistent while the long numbers remain near the 50th percentile level.
    • Wheat: Record short spec trade while the net trends lower. There have been some longs come in of late though as the number of long speculative contracts now sits at 1 year highs. Chips are being put down on the table by both sides. I expect some volatility soon.
    • Cotton: Spec longs have pared back their record long trade while the shorts remain at 3 year lows. Cotton has the conditions to support this in the field, but if a good yield is realized, watch out to the downside.

weather

RECOMMENDATIONS: I remain bullish of corn and wheat, bearish of cotton and neutral old crop beans and bearish new crop beans.

This Week In Grain (T.W.I.G)

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This Week In Grain

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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.

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About John Payne

John Payne is a Senior Futures & Options Broker and Market Strategist with Daniels Trading. He is the publisher of the grain focused newsletter called This Week in Grain, along with being a co-editor of Andy Daniels’s newsletter, Grain Analyst. He has been working as a series 3 registered broker since 2008.

John graduated from the University of Iowa with a degree in economics. After school, John embarked on a 4 year career with the United States Navy. It was during two tours in Iraq and the Persian Gulf where John realized how important commodities are to the survival of society as we know it. It was this understanding that brought about John’s curiosity in commodities. Upon his honorable discharge in 2007, John’s intense interest in the world of commodities inspired him to move to Chicago and pursue his passion in a career in the futures arena.

After a three year position with a managed futures firm specialized in livestock trading, he was given the opportunity to join the team at Daniels Trading. Being in the business and seeing how other IB’s operated, it was the integrity and straightforward approach of the Daniels management team and brokers that attracted him to make the move. Since joining Daniels, John has broadened his fundamental and technical analysis of the markets even further. John has been writing his newsletter This Week in Grain under the Daniels banner since 2011.

Working in high pressure industries like the military and capital markets, John has learned the value of preparation in times of stress. He believes that instilling within his clients the value of a good plan and a cool head for dealing with the day to day swings of commodity markets. He treats every client as a teammate, understanding that his job is to help clients achieve their goals, whatever they may be.

John is a proud supporter of the Iraq and Afghanistan Veterans of America, the Veterans of Foreign Wars and the National Corn Growers Association. When he is not working, he enjoys athletics of all kinds and spending time with his wife and their two kids.

John’s commentary is featured in the following publications:

* All Ag Radio – Sirius Channel 80
* AM 880 KRVN – Lexington, Nebraska
* RFD TV
* Wall Street Journal
* Barron’s
* China News Daily (English version)