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Home / Futures Blog / This Week in Grain-10/19 PM Wrap

This Week in Grain-10/19 PM Wrap

October 19, 2016 by John Payne


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

worldBeans 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.

cotton

 

https://media.blubrry.com/twigcast/p/content.blubrry.com/twigcast/TWIG1019PM.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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