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This Week in Grain- 1/26 AM Commentary

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

Corn (H17)  365’2   -1’0

Soybeans (H17) 1052’6

Chi Wheat (H17) 426’4   +2’0

KC Wheat  (H17)  440’4    +2’6

Cotton (H17) 74.60  +.72

Good  morning friends!
Ill be speaking about the markets tomorrow at the Montana Winter Fair in Lewistown, Montana so this will be the last you hear from me this week.
USDA export sales were announced this morning and wheat got a nice surprise with a monster week of sales, booking marketing year highs for 2016-17 at 800,000  MT.  Corn exports came in above expectations again, while beans met expectations. Cotton exports were a marketing year high.  This should give the bulls some tail wind into the end of the week. Argentina’s grain authority will be publishing their outlook on local crops today, so be ready for movement.  I am not sure on the time of the release, but I am told it is in the afternoon.
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Brazilian weather will feature near to above normal rainfall with some heavy rains for N Brazil in the 6-10 day period. The NE corner of Brazil will remain drier than normal, but our overall the worry remains harvest progress in north. The story is very static right now, with little on the horizon to change the story
Going into the weekend, I look for more two sided action.  Market rallies in old crop cotton are capped by farmer selling and spec long liquidation as we push into the mid-70’s, while the CBOT markets are in complete chop mode.  Farmer sells on rallies and shuts it off on breaks, where there is little interest for the fund to jump in and push the short profile any further.  If you missed a chance at corn sales in the 370 area, you may get a chance again soon. I would target somewhere between 370-375 for March delivery.
Trade ideas:
– Buy July corn- Sell Dec Corn (see Turner’s Take)- FILLED NEAR 12 CENTS
– Buy March short dated Bean puts to protect crop insurance prices
– Sold March corn near 370 –FILLED ON MARCH CORN SALE AT 370 ON FRIDAY
– Sell March KC wheat, look to re-own July via calls or collars
– Hedge Dec 17 cotton at these levels and more near 73 cents.
Spec Recommendation:
– Sold April Hogs between 68-70- FILLED
– Sold June Hogs at 77.00 – FILLED
– Sold October Hogs- 67.00- FILLED
-Buy Feb hogs/Sell April on a spread  (EXIT THIS SPREAD AT 2.55, FOR A PROFIT OF APPROX 1.85 POINTS, PROFIT TAKEN YESTERDAY)
–BUY FEB/SELL APRIL CATTLE AT 1.10
Please call or email if you have any questions.

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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)