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Wednesday AM in Gamestop and Oilseeds

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Good morning friends

Check out this video: https://videos.danielstrading.com/watch/9FpSdUfEfxKD4kjjxTkwtB?

  • FOMC day.  Any indication that interest rates may not stay at zero forever should send shocks through out risk assets.  The phenomenon that is Gamestop is something the fed is likely to address, maybe not today but at some point. Its beginning to become clear to me the challenges the FOMC and Treasury face to stimulate the economy but do it in “the right way”.  That will have ramifications.
  • ADM announced China bought 200 million gallons of ethanol for Q1 delivery. If this is the start of a trend, its a game changer. Until yesterday, the market was counting on ethanol margins tightening at these prices to ration demand.  That may not be the case with the Chinese helping out.

  • Russian export taxes are having a mixed effect.  Producers who hold supply in Russia are not lowering offers, buyers at the ports are simply paying the tax.  This is bullish for replacement supply like the US.  I expect the US supply to catch a bid somewhere in N. Africa sometime this year.  I do not see any weather problem priced into the July contracts yet.  I promise, you will know when the world is concerned with wheat supply. Its not happening at 6 dollars. We will get a new wheat crop conditions report for the KC region next week. Eyes will also be on the next GASC tender.
  • Canola futures closed limit up for the second day in a row.  The edible oil market remains on fire.  I would look at upside calls in bean oil if you are a speculator. The market is fully inverted. The March delivery is going to be nuts, especially if the Brazilian and Argentinian transportation strikes would pop up.

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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)