Good evening friends!
Corn 358’0 +4’2
Soybeans 982’2 +9’6
Chi Wheat 421’0 +1’0
KC Wheat 426’0 +4’2
Cotton 71.14 -.01
Corn and wheat find support on the breaks while cotton and soybeans jump higher with the crude oil market. The mitigated disaster that is the US livestock market has some hand in this as well. Corn has come all the way back to the 200 day MA where it stalled out last week. I think there is a decent chance it breaks through at some point soon. The prices are still low relative to investment in the product and the short position looks to still be in the early phase of an unwind. US NOLA corn is offered at 168 per MT while the Brazilians are up at 190. I think the US corn export market has a chance to run that high before Brazil harvests. Another 15% on corn prices puts front month right near 4.00. Stay long corn here and say a prayer we see a rush out of shorts at the 200 day MA. I assume there are a boat load of stops parked over last week’s high in corn.
We are starting to see the export markets here creep a little bit which is very supportive for corn and wheat, beans are a little higher as well. Check out the spreadsheet I have complied going back to early September. Eventually the market is going to wake up to the idea that the global stocks in corn and wheat are due to Chinese stocks that are probably smoke at this point, and Brazil has little on hand to get it to harvest. US The US demand story shouldn’t change in the short run, even with higher price points.
Beans and cotton (oil seed markets) are moving higher with crude oil. The rally is bringing 10.00 into play for deferred contracts starting in May of 17 for beans. I expect producer selling to continue and the story to rotate to newer crop supply once harvest wraps up. The export market in soybeans has been flat over recent weeks while cotton appears to be pricing in demand from China that I’m not sure we will see. I’m short here and certainly not feeling that good about it. I just continue to lean on this chart and keep telling myself that when supply arrives, selling should happen from speculators on both short and long side, along with producers. That said, were probably going to cover the gap at 73 in Dec 17 so there may be more pain ahead. It’s hard to sell into a market when you are already short, but I would encourage it in this scenario.
Podcast: Play in new window | Download
Subscribe: Apple Podcasts | Android | RSS
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.
