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Home / Futures Blog / This Week in Grain 10/06 PM Wrap

This Week in Grain 10/06 PM Wrap

October 6, 2016 by John Payne

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

Corn 340’6 (-1’2)

Soybeans 959’2 (+2’6)

Chi Wheat 396’2 (-8’6)

KC Wheat 405’6 (-9’2)

Cotton 67.55 (-.40)


Wheat, corn and cotton were all weaker this morning as market breakdowns were the theme here in Chicago in the row crop markets, Corn and soybean export sales through last Thursday were tremendous, but I think the trade is disregarding demand right now as yield reports continue to be impressive in soybeans, and very good in corn as the harvest gets going north of I-80. Something is afoot in the metals markets right now as silver is down about 10% for the week! Not all was bad on in commodities, crude oil continues its push above 50.00 in front month contracts, which has me scratching my head in the grains. Corn, wheat and cotton all closed off lows and soybeans actually which is about the only good thing to say about the markets besides Oats being green on the day. Maybe Oats knows something…

We got our first outlook at CONAB numbers (Brazil) this morning. . Soybean planted area is forecast at 83.5 Mil acres, up 1.5 from a year ago. This is  in line with trade guesses.  Soy production is estimated at 103 MMTs, up 2 MMTs from the USDA’s forecast. These numbers shouldn’t change much over the coming weeks, this is the time of the year when the market trades new crop as certain, with nothing in the ground yet.  I remain bearish on yields right now with sub par moisture in Brazil.

CONAB also estimates total Brazilian corn production at 83 MMTs. Last year Brasil produced about 66 MMT, after mid year estimates around 85 MMT didn’t come through. I remain bullish of corn at these prices as the balance sheet in Brazil is super tight, they have little room for error this year.

Cotton is hanging right above its trend-line at 67 cents. Its also below the 100 day EMA which as a bear, has me excited.  You know what doesn’t have me excited?  This hurricane….the outcome of this is unpredictable.  Part of me would say “buy some calls” but for the folks out in Texas, you wont lose production from it so there isn’t the risk that it is for the folks in the SE. Regardless, cotton is at a make or break point.

 

https://media.blubrry.com/twigcast/p/content.blubrry.com/twigcast/TWIG1006M.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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