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Home / Futures Blog / This Week in Grain-Weekly Wrap 10/28

This Week in Grain-Weekly Wrap 10/28

October 28, 2016 by John Payne


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

Corn  355’0 -2’4

Soybeans  1012’0  -13’0

Chi Wheat   413’4  -1’0

KC Wheat 415’6   -1’4

Cotton  70.89  +1.13


It’s end of the week…. on a side note I want to mention that I live about a mile NW of Wrigley Field, so if I don’t make it in on Monday it’s because the neighborhood burned down.

The markets had a nasty close to the week, breaking substantially in the case of soybeans right about the same time the news about Hilary Clinton broke.  I was down on the floor for some of the morning, it was a graveyard.  The announcement that a story exists that could affect the certainty of her presidency.  In my opinion, the market is trading like a victory is certain.  Let’s take a look at the Mexican Peso on this news break:

hillary

My point is to remind everyone the markets are staring at a pretty important world even, a week from Tuesday.  While I remain bullish of corn longer term, I might think about preparing for a break in price as November is pretty bearish for the futures markets. If you must price off March, I would recommend some shorter term delta. The corn market in 2017 feels pretty bullish to me,but the MRCI seasonals are pointing toward the exits.

seasonal

Nov beans having trouble near $10.20 and then flushing on the close is a bad sign. Soybeans feel like they capitulated today with Nov 17 beans closing below 10.00. Basis is weak as producers move the record harvest out of the fields soybeans . I assume CFTC numbers were elevated this week, and again Ill reiterate the short profile doesn’t exist right now so there are weak longs waiting to be trapped at play here. The seasonal is not as weak as corn, but it exists. Sell November 17 beans at this level.

There is little wheat news around right now. Maybe a small problem in South America but nothing else globally seems to be in the news.  I remain bullish wheat over the longer term, but like corn I think wheat faces problems in the months ahead given a continued strong dollar and no weather story.  KCW has something developing in Western Kansas, but its too early to talk about ’17 carryout cuts.

wheat

I expect the cotton market to fixate on the Nov 9 WASDE report. COT reports will show a long position that is near historical highs. The reports I hear out of Lubbock are pretty positive. With continued dry weather forecasted for most of Texas, I am confident harvest should go pretty well.  But there is a small spot of above average that boarders right on some heavy cotton ground, rain would be bad for yield certainty at this point.  I think a weather issue could push priced back to summer highs but I do not plan on getting bullish up there.  I remain bearish with the hope of selling Dec 17 at 73 cents.

Until Monday….

cotton

rain

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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