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Home / Futures Blog / This Week in Grain- 12/5 PM Wrap

This Week in Grain- 12/5 PM Wrap

December 5, 2016 by John Payne


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

Corn (H17)  358’2 +11’6

Soybeans (F17)  1053’0  +15’6

Chi Wheat (H17)  408’0  +3’6

KC Wheat  (H17)   408’6  unch

Cotton (H17) 71.08   +.04


 

Quick note before I get into it, I will be out of the office tomorrow through Thursday morning at the Kevin Van Trump Annual Grain Conference. If you are in the KC area and would like to attend, I think there may be a seat or two left. This is always the best thing I go to all year, but I think this year might be even better than in the past. The show is Wednesday in KC. Learn more HERE.

Also, Turner of Turner’s Take talks about the Italy referendum on his podcast today. Its worth a listen – INSIDE COMMODITY FUTURES

What a day in corn.  I had to go back months to this summer before I could find a 3+% up day.  The culprit?  You guess it, South American weather,specifically Argentina and Southern Brazil. Its way too early to start talking about crop losses, but the combination of low moisture in the soil now and dry/warm forecasts through February are enough to get this massive short spec position moving to the gates like a black Friday sale. Dec 2017 corn is knocking on the door of 390 and March 18 corn is pushing toward 4.00.  Carries have stayed firm which tells me nothing has been realized yet, but the threat is here.  Keep in mind Brazil has little product to sell to anyone right now, the US is the export market in this hemisphere. If you caught the break into delivery, hold on.  Don’t let breaks shake you out.  Congrats to those who re-owned the delivery, much like September corn, December corn delivery re-owning worked.

Don’t want to leave beans out of the party.  We saw another massive purchase by the Chinese again today, with a tender for old crop beans to the tune of 426 KMT. The sale was a monster and shows how much soymeal is needed within China. Between the bullish seasonal period and the room funds have to add, I think we could run higher in new crop but I remain bearish longer term with acres being the reason.  The only thing that would change that is corn prices rallying substantially into the year end, which is in the cards given the fund picture.

The KC-CHI spread going negative KC tells me wheat saw some short covering today but the story in wheat remains negative.  ABARE estimated its 2016/17 wheat harvest at a record large 32.6 MMTs or 8.4 MMTs larger than last year.  The US faces fierce competition across the globe, that doesn’t appear to be changing as the SAM harvests come to market.

Cotton had a flat day.  Same story applies, good seasonals but a lot of up front supply waiting to come to market. Sounds like India remains dry, but without a US problem the funds appear to be topped out and can’t push price much more. SELL THE GAP at 73 on Dec 17.

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

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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