• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Daniels Trading

Independent. Objective. Reliable.

Top Navigation

  • Open a Futures Account
  • Sign Up
  • Log in
  • 1.800.800.3840

Primary Navigation Menu

  • About
    • Who We Are
    • Services
    • Careers
    • Risk Disclosure
    • COVID-19
  • Trade
    • Broker-Assisted
    • Self-Directed / Online
    • Request Pricing
  • Hedge
    • DanielsAg Mobile App
    • Ag Marketing Plan
    • WASDE Analysis
    • Grain Resources
    • Livestock / Dairy Resources
    • Hedging Videos
    • Request Pricing
  • Invest
    • Automated Strategies
    • Managed Futures
    • Request Pricing
  • Advisories
    • GENERAL / FUNDAMENTAL
      • DT Newsletter
      • Insider Market Advisory
      • Turner’s Take Newsletter & Podcast
    • TECHNICAL ANALYSIS
      • The Cullen Outlook
      • Data Feed Trade
      • Jarboe Trading Journal
      • Trade Spotlight
    • AG MARKETING
      • Cattleman’s Advisory
      • The Swine Times
      • Technical Ag Knowledge
      • This Week in Grain
      • Turner’s Take Ag Marketing
    • THIRD-PARTY RESOURCES
      • CFRN
      • Moore Research Center, Inc. (MRCI)
      • OptionWorks®
      • TASMarketProfile.com
  • Education
    • CME Group Resource Center
    • Small Exchange Resources
    • Guides
    • Frequently Asked Questions
    • Order Entry Handbook
    • Webinars
  • Blog
    • Futures 101
    • Ag Marketing
    • Tips & Strategies
    • Trading Advisories
  • Resources
    • Trading Software
    • Quotes and Charts
    • Futures Calendars
    • Contract Specifications
    • Margin Requirements
    • Futures Calculator
  • Accounts
    • GAIN Capital Futures
    • StoneX
  • Contact
Home / Futures Blog / This Week in Grain- 3/23 AM Commentary

This Week in Grain- 3/23 AM Commentary

March 23, 2017 by John Payne

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

Corn (K17) 358’2  -‘2

Soybeans (K17) 995’0 -3’6

Chi Wheat (K17) 422’4   +’2

KC Wheat  (K17) 444’0  -‘6

Cotton (Z17)  75.49   +.33


Good morning friends

The Brazilian meat scandal enters day 3, with the Chinese government weighing in on things and banning Brazilian poultry and beef from entering the country.  They join a host of other nations across the globe who are turning away Brazilian product at the port. ON average over the last year, Brazil books close to 70 million dollars worth of beef per day.  Yesterday they booked just over 70k.  In the short run, I don’t think its a stretch we see the demand for feed fall.  Now, folks are still going to eat poultry and beef but the world markets will need time to adjust.  This could be a very good thing for US ag in the long run, its definitely good for US beef and poultry in the short run, but it could be negative for feed grain prices in the short run too as this whole thing washes out.

CLICK HERE FOR MORE

Corn’s slide continues amid rising South American production estimates – and thus rising competition for export demand, and now this situation in Brazil.  Ethanol production was better than expected, but this brings more DDG’s to the feed market as well. A weather scare is needed to spark better interest from speculators as the fund short has come back into vogue.  Fresh news that has appeared in recent days/weeks has been mostly negative, and with US wheat production threats in retreat amid coming rainfall, and amid record crops in South America, it’s tough to be bullish corn but from my history of doing this when it feels the worst is when it usually is the best time to buy it.  Longs should stay liquid for a test of the low 360/high 350’s in July corn. The good news is that US corn export inspections were solid this week, near the top end of expectations. That may be enough to stop the slide as April options expire this week.

Wheat’s falling as corn slides, with KC futures falling through support with Egypt reportedly canceling a totals of 10 cargoes from the black sea since the year started. . Turkey has also added Germany, Romania and even the US to its list of unacceptable origins, which erases hope the US could ship 20-30 Mil Bu to Turkey in the next 2-3 months. So there is some weak demand out there.  On the supply side, the forward moisture forecasts look like this, which means wheat weather premiums are coming out of the market.  My long July positions from between 450-460 feel heavy here, especially since the Brazil story adds more feed on to the market but I think selling here is myopic. I am willing to hold these positions to the summer lows in the 430’s.  The market needs a spark to recover. Rainfall in the next 10 days across the Southern Plains has allowed a substantial portion of the market’s weather premium to be shed, and amid near normal precip/above normal temps across Europe and Russia, funds short covering doesn’t appear imminent. Wheat export sales were within expectations.

Soybeans continue to baffle the bears, given the action we see in the outside markets. Both Dalian soybeans and Brazilian bean prices are taking out lows as the supplies pile up south of the equator. Is the market really just waiting for US new crop soybean data before legging lower? The feeling is that we chop until the report at the end of next week.  I think we will see a test of 980 before the report, but to leg lower from there we probably need to see the acreage number come in on expectations.  From there, its all about US weather.

Cotton futures remain on the bid as the demand tone remains positive.  China sold 71% of yesterday’s offering in the reserve auction which was lower than in recent weeks.  At some point, the market will focus on new crop supply and demand.  Given all of this bullish data we have gotten over recent months, global stocks to use is still fat.  I think we could see US acres come in north of 12 million which makes our balance sheet look bloated on a new crop.  75 cents feels like a good spot for new crop cotton while July runs into resistance near 80.  I also worry a little about the waning US Trump optimism that has pushed prices domestically.  At some point, higher incomes need to be realized and not spoken about for prices to stay up here.  We have seen bearish action in almost every market out there except for two, cotton and equities.  At some point these longs will be forced to a decision.

Stay well today!

 

 

 

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)

Primary Sidebar

Get Blog Updates

Subscribe to our blog and receive a daily email with information on market insights, trading tips & strategies.

Trustpilot

Footer

Site Navigation

  • Frequently Asked Questions
  • About Us
  • Customer Reviews
  • Contact Us
  • Futures Blog
  • Open a Futures Trading Account
  • Media Resources
  • Fund Your Account
  • Legal Notices

Contact Us

Daniels Trading
100 South Wacker Drive, Suite 1225
Chicago, IL 60606
+1.312.706.7600 Local / Int'l
+1.800.800.3840 Toll-Free
+1.312.706.7605 Fax

Connect with Us

Trustpilot

Copyright © 2021 · Daniels Trading. All rights reserved.

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.

  • Risk Disclosure
  • Privacy Policy
  • California Residents Privacy Notice
  • Terms of Use
  • Back to top