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Home / Futures Blog / This Year in Grain- Putting a Bow on 2016

This Year in Grain- Putting a Bow on 2016

December 30, 2016 by John Payne


This Week In Grain (T.W.I.G)Happy new year friends!

Corn (H17)  351’0  +1’2

Soybeans (F17) 1005’0  -7’6

Chi Wheat (H17) 408’6  +4’0

KC Wheat  (H17)  418’6    +3’4

Cotton (H17) 70.72  +.22


Before I get into the breakdown I want to thank everyone for following along with me in 2016.  Putting the puzzle together can be difficult, I could not have attempted it without the readers who stay in contact with me.  I learn as much from you as you hopefully learn from me. I look forward to a fantastic 2017, thanks again for reading.

It was a wild day of re-balancing on grains as little news other than exports and Argentinian flooding was out there to move the trade.  The markets themselves were quiet until about 1:10, and then the fireworks started.  Soybeans dropped about a dime from unch to down 10, then rallied a bit into the close.  Wheat saw the opposite price action with a move from sub 405 to +409 observed.  Cotton completely fell apart, with March +71 before the close and sub 71 on it.  Dec 17 cotton made a run at 70 cents but failed again.  Corn was quiet staying between 350 and 354 all day.

The forecast is little changed from the overnight run for Brazil. They look for limited rainfall over the next 2 weeks.  This is normally a wet time of the year and with temperatures rising, expect to see some photos of crop damage. A high pressure Ridge looks to hold across NE Brazil with a fast moving and strong jet stream pulling across S Brazil/N Argentina. High temperatures look to range from the 90’s to the lower 100’s across N Brazil which will fuel rapid soil moisture evaporation. The guys I read are saying this is not a typical weather pattern, problems exist.

Wrapping up 2017, here are each markets front month (continuous) performance for 2017. Looking at these charts here are a few things I notice:

  • Every year since 2007 we have seen front month corn get over 4.40.
  • The existence of ethanol looks to provide a floor near 3.20 in corn
  • Soybeans has traded in a relatively small range since 2015 compared to the history of the last decade.  Be careful in beans this year, it feels like a rip is coming.
  • The chart doesn’t reflect the pain felt in the wheat markets. Front month prices have been relatively quiet, but given the loss of “time” through the carry, you would have lost more than 50 cents if you had rolled all year.
  • Cotton long term charts feel like they want to test that summer 2016 high next year.  Markets have been resilient of late, while I remain short I have my fire suit on, ready to take some heat.

CORN:  Opened at 359’4- Closed 351’0:  – 8’4

SOYBEANS: Opened 2016 at 863’0, Closed at 1005’0:  +140’0

CHI WHEAT: Opened 2016 at 472’0, closed at 408’6   -63’6

KC WHEAT:  Opened 2016 at 468’4, closed 418’4   -50’0

COTTON: Opened 2016 at 63.28, closed at 70.72  +7.44

Lastly, I ask for everyone to keep my family in their prayers.  The Payne’s of Davenport, Iowa lost the matriarch of our family early this morning.  Janet Payne was 85 years old and is survived by her husband of 68 years, her four children and her many grandchildren and great grandchildren. When Norman Rockwell painted the American Grandmother, Janet Payne would have been his muse. We will miss you grandma, enjoy your wings.

 

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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