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Home / Futures Blog / This Week in Grain- 12/19-12/23 Santa Claus Week

This Week in Grain- 12/19-12/23 Santa Claus Week

December 19, 2016 by John Payne


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

Corn (H17)  354’6   -1’4

Soybeans (F17)  1025’6  -11’0

Chi Wheat (H17)  410’6   +1’4

KC Wheat  (H17)  417’6    +3’0

Cotton (H17) 70.85   -.82


CBOT session started this holiday week (the holiday is next week, but the volume will reflect this week as well) on a sour note in soybeans and cotton, while the wheat and corn markets are mixed.  Weather will be the topic early in the week,  Argentina mostly got the rain that was expected and wheat belt in the US is under extremely cold temps.  The livestock markets will take their turn on the podium this week with Livestock slaughter on Thursday. Cold Storage, cattle on feed, and a very important Quarterly Hogs and Pigs report on Friday. Other than export sales and wheat conditions the grain reports are done for 2016.

The overnight CBOT trade was a bit of a dud considering the close on Friday.  Needed rain fell across Argentina and S Brazil on the weekend, the bears will claim trend yields are in tact. Given that corn and wheat OI has come back in the bulls favor over recent weeks, another push down is probably in the cards.  I am hearing producers are very slow to sell corn, but that will change in coming weeks when bills are due. The bulls will point to zero old crop stocks in Brazil as support, along with another dry forecast in the days ahead. . The next chance of rain across Argentina is late Friday/Saturday when another inch is expected/  S Brazil has rain chances every day this week while the drier areas of NE Brazil stay dry for the next 10 days. High temps look to range from the mid 80’s to the mid 90’s.  Beans are going to be the most susceptible to bearish news given the long position and the acreage story.

From an open interest standpoint, beans remain long while the corn has paired its short position substantially since October. Wheat shorts have come out as well.  Wheat should have preformed better on this cold snap, but physical supply is just too much right now. Seasonals in wheat pick up to the negative side as we get into January, bulls hope for a Christmas rally.  I look for July 17 KC wheat to rally into the 450 level.

Cotton enters the second to last trading week on the year with a record net long position for the 4th week in a row.  This leaves the price extremely vulnerable to quick short covering if news would support.  Given that cotton harvest is done, there is little out there that will push price besides macro conditions, which would make me even more nervous. A close under 70.25 would be ominous in my opinion. Short term traders might look to buy some extra puts ahead of the next WASDE reports.  Call Donna or myself if you have questions.

https://media.blubrry.com/twigcast/p/content.blubrry.com/twigcast/twig1219am.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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