NEXT WEEK | I will be out of the office next week on my family vacation. I typically do not go away during the summer because it is so busy around here. Now that we are in harvest October tends to quiet down and I get a way with the wife and kids for the week. There will be no newsletters or podcasts next week (Oct 9 – Oct 13).
NEW PODCAST | I just released a new Turner’s Take Podcast. We talk about why we think grains are range bound for the next couple of months, why Soybeans have the best potential of all the grain/oilseed markets, our bearish view on crude and our bullish view on OJ. Click here to listen to Turner’s Take Podcast.
GRAINS & OILSEEDS | I think Corn continues to trade in range for the next month or two. If we get into the $3.30s it will be a buying opportunity. Harvest pressure will keep grain prices in check. Short term traders should look to sell rallies and try to pick off a few cents. Farmers should look into short straddles in corn and beans with expirations in Oct and Nov to collect premium. Any gains should be used for hedges in the 2018 crop.
The US needs to reduce corn+wheat+soybean acres by about 5mm. I think most of it has to come from corn. The issue is how does corn go from 90mm to 85mm acres next year? It probably does not, but until we get to 85mm acres I can see corn trading $4.50 without major production issues.
Soybeans are still my “best bet” for the ag space next year. Beans have the best demand drivers (developing world’s need for protein) and we only produce beans for global exports in the US and South America. Beans below $9.30 look like a good value to me.
CRUDE OIL | Crude is breaking down on the charges and I still like being short Dec crude or in the Jan/April MRCI bear spread. The Jan/April is a MRCI seasonal spread and we tend to see the front months lose against the back months this time of year. The market is very long crude and we are starting to reverse on the charts. Also keep in mind when we get to $50 we tend to see the shale oil producers increase production.
ORANGE JUICE | OJ could be breaking out here. It is a hard market to find fundamental supply and demand figures for so we will have to rely on the charts. Some analysts estimate FL lost 50% of their production due to Hurricane Irma. However, we import about half our OJ in this country and we could probably import another 25% from Brazil if need be. It just depends how much global supply there is and how much more it costs the US when we have to rely on imports. As the cash market goes higher it should show up in the futures. I think we are breaking out and I like cheap calls in January OJ.
Try Turner’s Take Market Alert – for 30 Days
Turner’s Take Market Alert – Trial - Turner’s Take Market Alert includes Daily Updates and an Intraday Trade Recommendation service for Daniels Trading clients.
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 TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.
GLOBAL ASSET ADVISORS, LLC (“GAA”) (DBA: DANIELS TRADING, TOP THIRD AG MARKETING AND FUTURES ONLINE) IS AN INTRODUCING BROKER TO GAIN CAPITAL GROUP, LLC (GCG) A FUTURES COMMISSION MERCHANT AND RETAIL FOREIGN EXCHANGE DEALER. GAA AND GCG ARE WHOLLY OWNED SUBSIDIARIES OF STONEX GROUP INC. (NASDAQ:SNEX) THE ULTIMATE PARENT COMPANY.