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Home / Futures Blog / This Week in Grain 10/05 AM Update

This Week in Grain 10/05 AM Update

October 5, 2016 by John Payne

Good morning friends!This Week In Grain (T.W.I.G)

Corn 345’6 (-2’4)

Soybeans 967’0 (+3’4)

Chi Wheat 394’4 (-1’0)

KC Wheat 401’6 (-1’2)

Cotton 69.34 (-.34)

 


It has been a slow overnight in regards to news a price, corn giving back some of its gains will have bears calling for a top after seeing 35 cents and almost 8% put on in price over the last month.  Bulls will point to a low price point and a bullish seasonal picture as evidence that this inst a correction, rather a trend change. 3.50 is a key level and with a highly anticipated WASDE being released in the next week, I think we see the breaks pumped in the short term on this move higher.

Brazilian corn planting advances to 25% completes 34% last year.  Argentina estimates have corn planting at 22% complete vs 15% last week and 13% last year. The exchange in Buenos Aires sees Argentine corn planted area up 25% from last year, which is bearish for the longer term but very telling about supplies in the short run. .

Below is a spreadsheet of world prices at different points over the last month.  As you can see, Wheat prices remain in the dumpster as Russia offers remain heavily discounted to US FOB offers.  This is going to be a problem for CBOT prices until we get a story to move the shorts out. I also want to point out soybean prices that have come down over recent weeks against corn prices that have rallied across the globe. I think corn has solid footing in these markets right now as we are the cheapest and most dependable supplier on the street. I look for the US markets to close the gap over Brazil in coming months, which should be bullish the board.

worldprices

Lastly, cotton is making another push toward 70 cents as a hurricane bears down on the US coast.  We’ve seen soft markets across the board perform very well over recent months, cotton included but I feel the time is neigh for the break.  Maybe its WASDE that does it in a few weeks, maybe it will take more time and confirmation of the crop. There are some bullish waves coming from India as planted acres are down 12% this year, but the export demand just isn’t there yet.  At this point I feel the good conditions in Texas are being discounted and prices are 5-10 cents too high into harvest.  I recommend standing orders on Dec 17 cotton at 73 cents to establish hedges. Use March or July options if you are adverse to futures.

 

https://media.blubrry.com/twigcast/p/content.blubrry.com/twigcast/TWIG1005AM.mp3

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Risk Disclosure

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.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

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 third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

Filed Under: This Week In Grain, TWIG Cast

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)

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Risk Disclosure

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.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

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 third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

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