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Home / Futures Blog / Turner’s Take | Fed To Buy Corporate Bonds

Turner’s Take | Fed To Buy Corporate Bonds

June 15, 2020 by Craig Turner

Macro Markets

The stock market opened lower last night and traded lower through mid-morning.  Once the Fed announced they will be buying individual corporate bonds the markets all seemed to get stronger.  This is a new form of stimulus that will provide liquidity to corporations.  The bonds will have to meet minimum financial requirements (no junk bonds) and this will help corporations find liquidity and financial when they need it.  This action should be supportive overall for the markets except the US dollar.

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free!  You may also click here to register for Turner’s Take.

Ag Markets

It was a quiet day for grain and oilseeds.  The markets were weak in the overnight and traded lower after the morning open, but started to rally back after the Fed announcement. The USDA announced another soybean export buy from China, and this is the time of year when they start to switch from Brazilian soybeans to American soybeans.  We should continue to hear about China buying soybeans from the US.  Bean Oil rallied today as did Rice, two markets we are long.  The determining factor for the corn and soybeans going forward will be central US weather.  It will be hot this week but there is more precipitation forecast for the last half of June.  As of the latest models the weather should be friendly to US crop production.

Livestock continues to chop and we see the live cattle winter months with the best value. I like Dec LC when it is below 100.  We think it can trade between 110 and 120 later this year.  The next time it trades below 100 I like getting a double position.  The first we will hold of the long term and the second we will use to trade around the core positions.

If you are interested in working with Craig Turner for hedging and marketing, then click here to open an account.  If you are a speculative or online trader then please click here. 

Dec Live Cattle

Weather

Below are the 6-10 day and 8-14 day precipitation probability maps from the NOAA.  While it may be hot for the next two weeks, we do expect rain in most of the Midwest.  This should be positive for corn and soybean crop development.  I’m starting to think corn yields could be 180 and soybean yields at least 50 bpa.  We still have a ways to go but based on the current forecast I am more optimistic about trend line yields or higher as opposed to lower crop produciton.

If you are interested in working with Craig Turner for hedging and marketing, then click here to open an account.  If you are a speculative or online trader then please click here. 

6-10 Day Precipitation NOAA

8-14 Day Precipitation NOAA

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free!  You may also click here to register for Turner’s Take.

Energy Markets

Crude oil was down overnight just like the rest of the macro markets but rebounded after the Fed announcement.  Crude was also spurred on by optimism around continued OPEC+ production cuts.  Below is a chart of December 2020 WTI Crude Oil.  We think it is a matter of time before the gap is filled and crude trades to $44 again.  So far the 20 day moving average (red line) has proved to be a good daily support line.  There will be a lot of resistance at $40 and then $44.  We like buying the dips and then looking for a rally.  $36 is the first support level and then again at $34.

Dec 2020 Crude Oil

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free!  You may also click here to register for Turner’s Take.

About Turner’s Take Podcast and Newsletter

If you like this content then please sign up for a free subscription of Turner’s Take Newsletter & Podcast.

Craig Turner – Commodity Futures Broker
Turner’s Take Ag Marketing: https://www.turnerstakeag.com
Twitter: @Turners_Take

Contact Craig Turner

Filed Under: Turner's Take

About Craig Turner

Craig Turner is a Senior Broker at Daniels Trading, author of Turner’s Take newsletter, and a Contributing Editor for Grain Analyst. Craig is often quoted in the Wall Street Journal, Reuters, Dow Jones Newswire, Corn & Soybean Digest, and also makes appearances on SiriusXM – Rural Radio Channel 80 providing commentary for the Grain and Livestock markets. Craig has also been featured in FutureSource’s Fast Break series, Futures Magazine Online, and INO.com. Mr. Turner has a Bachelors from the Rensselaer Polytechnic Institute (RPI) where he graduated with honors and has worked at the NYSE and Goldman Sachs. While at Goldman, Craig earned his MBA in the NYU Stern executive program. Learn more about Craig Turner.

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