Good afternoon friends!
Corn (H17) 365’6 -1’6
Soybeans (H17) 1036’6
Chi Wheat (H17) 430’6
KC Wheat (H17) 441’2 -2’2
Cotton (H17) 76.42 -.50
Today will be an early day for me, I have to run out to South Bend to appear as a guest on US Farm Report. I believe it air’s this weekend, Ill be the guy on there with hot takes. Beware….
CBOT markets and ICE cotton are lower across the board in the overnight. Cotton opened lower and did not fill its exhaustion gap as of yet. I have updated the cotton recommendations below to reflect a fill on additional hedges at 73.50. I am aware some have sales in at the gap around 73.60, I assume we will see that filled at some point today as everything appears to be back and filling this morning. There are rumors everywhere about why cotton is rallying. Lack of quality, ginned supply…the Indian situation…fall out from Chinese currency manipulation…the result has brought about a squeeze of sorts in the old crop contracts. We could see that squeeze abating yesterday as bull spreads sold off dramatically. July-Dec cotton sits .75 off its high from yesterday. Funds remain UBER long, as I imagine we will see this afternoon in the COT data.
This is why you hedge. If you have done nothing on this run up over the last 30 days then you are winning….but I would be very careful to not look these prices in the face and do nothing. The market is as bulled up as I have ever seen, does that mean a top is in? No. But it encourages me to lock in some kind of downside risk.
South American weather forecasts have to be monitored with heavy rains slated for N Brazil in the next 10-14 days, but other than that we are pretty calm in the South American front. We are seeing some interesting action out of the SAM bean prices, that remain above US offers for the early spring. This is not bearish soybeans. Indian wheat imports look to push to a 10 year high at 4.5 MMTs according to export and the purchase pace to date. India has already secured 3.0 MMTs. I look for wheat to remain constrained into the end of the delivery period but things feel a little more promising given the situation in Russia (sorry Putin, sanctions not lifted) and the demand out of Asia. I think the funds see CBOT prices as cheap, I would be a buyer on breaks.
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.