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Home / Futures Blog / This Week in Grain- 12/9 WASDE Preview

This Week in Grain- 12/9 WASDE Preview

December 9, 2016 by John Payne


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

Corn (H17)  355’0 +1’4

Soybeans (F17)  1031’6  +4’6

Chi Wheat (H17)  408’2   unch

KC Wheat  (H17)   404’6  -6

Cotton (H17) 71.24   -.18


Corn and wheat markets were quiet in the overnight trading within 1% of yesterday’s close.  Soybeans had a little more volatility but an early evening selloff has been erased as beans now trade up a penny or so.  Cotton weakness continues, albeit less than some of the shorts would like.  USDA WASDE is released at 11 AM. The December report is normally not a big deal, but I will be keen to see how the USDA looks at our markets from the demand side creating a slightly smaller carryout (corn and beans) while in cotton Ill be interested to see if production numbers change at all. Stocks to use in cotton remains elevated compared to the 10 year average, I look for that to go higher.

Argentine and South Brazil weather forecast has been rather static in maintaining a dry weather profile for the next 10 days with 100 degree temperatures in the cards.  The selloff in beans and corn yesterday had more to do with perverted moisture than changes to the forecast.  The 12-15 day forecast of the GFS model keeps trying to break out rain across Argentina and S Brazil, but that moisture does not get pulled forward in the forecast. The extended EU model is far less enthused by rain chances keeping them mostly across N Argentina and S Brazil.  Rainfall across the remainder of Brazil looks to be abundant with seasonal temperatures.

Chinese soy products and Malaysian palm oil are both trading lower, the palm oil pushed to a 4 year high on Tuesday but like bean oil have come off in recent days. Following the December WASDE report, its South American weather that will key to CBOT values going forward. India will remain on my radar though. In cotton, I look for selling (maybe heavy) if the USDA report doesn’t support the specs at these levels.  March cotton has gone under may, so the cash markets are not flashing problems. Watch how March trades sub 70 cents.

TRADE IDEA: Buy bean oil calls ahead of the USDA. I discuss this in the audio below.

 

 

https://media.blubrry.com/twigcast/p/content.blubrry.com/twigcast/twig129am.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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