SOYBEANS | Soybeans are holding the 50 day moving average. A close below $8.69 in Jan 19 soybeans and a close below $9.1250 in Nov 19 soybeans could send the whole soy complex another leg lower.
I read a very interesting article in the South China Morning Post today. Apparently, some of the Chinese think tanks and strategy advisers held back on their assessments of the trade war in fear of disappointing their superiors. It sounds like there is a lot of questioning going on behind the scenes in China but they are waiting to see what happens in the US midterms first and if it impacts Trumps hold over the US government. If you grow soybeans I would check in on the South China Morning Post a few times a week. They have some very good articles on what is going on in China that you might now see in the US news cycle
COTTON | Cotton is rallying today and the July/Dec spread has broken through a major resistance trend line. Hurricane Michael severely damaged the GA crop and we have been hearing about flooding in TX, the biggest cotton producing state. Today reports are suggesting the KS cotton crop is at risk too. It is very difficult to estimate how much cotton has been lost, but the market is building premium into the new crop. Cotton can be a tough market to trade in flat price futures and the options tend to be expensive. I like the futures spreads.
LEAN HOGS | While we have been bearish on the front end of the hog curve, we do like the deferred bull spreads. ASF has now reportedly spread to Southern China, which signals to the markets that ASF is now widespread in China. We like the Feb 19 vs April 19 bull spread to play hogs. Like Cotton, the flat priced futures in hogs are volatile and the options can be expensive. The LHG19/LHJ19 spread looks like a good way to play the hog market
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Craig Turner – Commodity Futures Broker
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