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Home / Futures Blog / This Week in Grain-10/24 PM Wrap

This Week in Grain-10/24 PM Wrap

October 24, 2016 by John Payne


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

Corn      348’4   -4’0

Soybeans  1002’2  +10’0

Chi Wheat   403’4  -11’2

KC Wheat 413’4   -8’0

Cotton  68.66   -.22

 


**Crop progress reports were just released, I go over them in the audio podcast. Listen below or on your phone. 

Soybean markets are on the move as Nov tests 10.00 and 2017 contracts trad at levels not seen since late August.  All of this happens while the corn and wheat markets get leaned on all day, Chicago wheat especially as it re-takes its place as whipping post. Cotton had a very slow day with little trade on either side of 69 cents.  Dec 16 is trading even with Dec 17.Nothing different from last Monday to this Monday other than a stronger dollar and more certainty regarding

Its hard to say whats driving the selloff in wheat. There is little in the way of news flow, maybe the market is gearing up for its first crop rating of the year. It is dry out west and winter wheat acreage is looking to come in where it was in the early 1900’s as far as plantings are concerned.  The market can pretty much guarantee a carryout cut at this point.  China wheat production last year was BRUTAL, no matter what they say.  China stepped up its wheat buys in September, buying 431,810 MT of wheat, a 109.01% increase from year-ago. Australia and the U.S. provided the bulk of the shipments to China. HRW continues its push back against the Chicago contracts, which tells me this is nothing more than long liquidation. I would be buying the break below 450 in Chicago or KC July.

Export inspections through last Thursday were weighted heavily towards soybeans. Bean shipments through the period totaled 101 Mil Bu, up 9 Mil from the previous week and the largest since November 2014 are near record large.  Corn and wheat shipments declined as a result, with corn inspections totaling 21 Mil Bu, vs. 35 Mil a week ago, and wheat shipments totaling just 9 Mil, vs. 17 Mil a week ago. For their respective marketing years to date, the US soybean sales stand 11% bigger than last year; up 75% for corn and up 27% in wheat bushels shipped from a year ago.  This break in price should see support, mainly from export competition.

Weather remains one of the only real tradable factors at this point in the crop growing year, and that comes from South America. Models show more moisture to be expected across Brazil in the extended period, but overall maintains a pattern of normal/above normal rainfall across the whole of South American into early/mid-November. A seasonal pattern of near-daily tropical showers will be established in Central and Northern Brazil in the weeks ahead, while moderate/heavy rainfall will work across Argentina and S Brazil every 3-4 days through Nov 3. Perhaps more importantly, the models in recent days have trended cooler in Brazil, and so extreme heat will be absent during the first part of the growing season.  So far, there is little to write home about regarding South American yields.  The market should look at this as “supply friendly” for now.

https://media.blubrry.com/twigcast/p/content.blubrry.com/twigcast/TWIG1024AM.mp3

Podcast: Play in new window | Download

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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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