Grain Futures Update

News & commentary on Grain Futures markets including wheat, soybeans, corn & more.

Grain Futures Update is a blog dedicated to bringing updates, news and commentary on grain futures markets including the commodities wheat, corn, soybeans and more.

This blog is brought to you by Zaner Group, one of America's oldest family-owned and operated futures and forex brokers.  Zaner provides a wide range of services from research and recommendations to the execution of all your futures needs.

We invite you to join the thousands of other Zaner clients that have enjoyed our services.  Click here to learn how to open an account with Zaner.

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Futures, options and forex trading is speculative in nature and involves substantial risk of loss.  These recommendations are a solicitation for entering into derivatives transactions.  All known news and events have already been factored into the price of the underlying derivatives discussed.  From time to time persons affiliated with Zaner, or its associated companies, may have positions in recommended and other derivatives.


What Should we Expect on the WASDE Report for Corn?

Posted on 5/5/2016 4:42:20 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

Next Tuesday the USDA will release their monthly WASDE (World Agricultural Supply and Demand) report.  This particular report is significant because it will update South American production and give us a first look at the USDA balance sheets for the crop that is currently getting planted.  For corn we are likely to see some very big stocks from the USDA.  But, with larger than expected acreage on the Prospective Plantings report how big of a crop is already factored in?

We are one of the firms that gets polled by the 3 major news outlets for our expectations for USDA reports.  For this report we know that the USAD will stay pretty close to the acreage numbers reported in the Prospective Plantings report and the yield numbers reported in the Ag Outlook forum.  This means that while there is a little wiggle room on the production side of the balance sheet the bigger question is what the USDA will do on the demand side.  From what we are seeing it will be very difficult to see a new crop corn carry over under 2.150 billion bushels.  Historically speaking, this is a vary large corn carry over.

However, when the USDA shocked the market on March 31st with a 5 million acre increase in corn acres (year over year) expectations may have been set for a very large corn carry over.  At 93.6 million planted acres of corn the USDA gave us a number that was about 3 million acres above expectations.  Add that to the 168 bu/acre trend line yield that the USDA established during the Ag Outlook forum back in February and we pretty quickly were able to figure out a general idea of what the USDA would be looking at for corn production.  So, in the last few weeks we may have already factored in a large crop and large corn stocks.

While it seems rather unlikely that we will see a wildly bullish number for corn from the USDA next Tuesday it might not be much worse that what the market is already expecting.  Seeing a big production number and a big carry over number on paper could certainly throw a wet blanket on the market but it may not be a good reason to go make new lows in corn unless it is much more bearish than expectations.  If the USDA estimates corn production and ending stocks within the range of guess we could pretty quickly start talking about how we may have seen some acreage shift away from corn since the Prospective Plantings survey was taken and how current long term weather forecasts could make it difficult to hit the USDA's trend line yield.

The expectations should be set to see bearish numbers for corn from the USDA next Tuesday, but the numbers may not be terribly bearish compared to expectations.  While it is difficult to imagine this will be a wildly bullish report we might have to wait to see what weather looks like as we get into the heart of the growing season before corn needs to go down and make new lows.  Either way this will be an interesting report and will set the tone for months to come.

Give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action.  Ted Seifried - (312) 277-0113.  Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.  Follow me on twitter @thetedspread if you like. 

May Corn Daily chart:

 

May Soybeans Daily chart:

May Wheat Daily chart:

 

Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie


How Much Corn has been Planted?

Posted on 5/5/2016 4:08:20 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

On Tuesday the November soybean contract set a new high close for the year.  Just weeks ago most analysts, producers, traders and end users thought this kind of move was impossible given the current fundamentals of the market.  So what has changed and will it last?

First off, this unprecedented move in soybeans and soybean meal might be difficult to comprehend for many, but for the American producer this is a opportunity to do something that just a few weeks ago was seen as an impossibility - lock in positive profit margins for the year.  This opportunity should not be taken lightly and should be taken advantage of one way or another.  We have specific strategies we are using, feel free to contact us to hear more about them.

Some will say that the lower US$ is driving soybeans higher, or the lower Brazilian Real, or inflation concerns.  While I do believe that currency exchange is helping US exports on the global market and I do feel that commodities as a whole have recently gotten a boost from inflation concerns I do not think this can account for such a strong rally.  Weather concerns in South America are another reason given for the strength.  Brazil has gotten hot and dry for their second season crops and Argentina has been getting terrific downpours on maturing crops also causing damage.  This potential loss of production will have an impact on a global balance sheet, but not likely a large enough one to spur this kind of strength.

I feel that more likely the strength in soybeans is coming from a tightness in soybean meal stocks.  With low crush margins soybean crushers slowed down the soybean crush in the last few months and soybean meal demand (both domestically and abroad) remained strong.  So, this may just be soybean meal correcting the crush margins in order to spur the crush into higher levels.  If this is the case this problem could be eased in a matter of weeks because soybean crushers have the soybeans to crush and they were bought at lower prices so profit margins are much better than the have been.

Regardless of the cause the opportunity is still there.  We are still looking at a 400 million bushel carry over in the US.  We still have a very comfortable global balance sheet.  We are still intending to plant 82+ million acres of soybeans this growing season.  So, while this rally in soybeans may not be over just yet producers need to take a close look at their bottom line and lock in profitable profit margins when the opportunity is there.  And, if we are worried about giving up opportunity for higher prices especially for the growing season there are strategies to replace that opportunity.  Our best advice for this marketing year is - Use cash sales to manage risk, use the board to manage opportunity.

Give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action.  Ted Seifried - (312) 277-0113.  Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.  Follow me on twitter @thetedspread if you like. 

May Corn Daily chart:

 

May Soybeans Daily chart:

May Wheat Daily chart:

 

Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie


MINNEAPOLIS KANSAS CITY SPREADS EXPLODE.

Posted on 5/4/2016 6:44:44 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

 

 

WE HAVE A VERY GOOD HEDGING DEPARTMENT HEADED BY TED SEIFRIED. WHY NOT TALK TO HIM OR ANY OF OUR OTHER HEDGING BROKERS. NO ONE WILL PRESSURE YOU AND WHAT HAVE YOU GOT TO LOSE?  I'VE BEEN A LICENSED FUTURES BROKER FOR OVER 41 YEARS AND TRUST NO ONE MORE THAN TED AND HIS GROUP.

 

 

Higher close for rough rice while lower closes for Minneapolis, Kansas City and Chicago wheat along with oats, corn, soybeans, soybean meal and soybean oil. Basically, rough rice, soybeans and soybean meal have rallied since my last Wednesday's report while the rest of the grain complex has fallen. The Minneapolis, KC spreads have exploded with KC falling within shouting distance of its contract low. Looking at the charts below you wouldn't thinK that they are both part of the wheat complex. Chicago is now back in a strong looking support area while really in sideways action overall this year. Minneapolis keeps looking higher while KC is acting bearish. Three different types of wheat and three different chart formations. You don't see that very often. However, I still don't see any shortage of wheat now or on the horizon and expect that to be reflected in the market place when all is said and done. Also, Minneapolis continues to make higher highs and lows since the beginning of March. Like I mentioned last week, I don't trust the wheat complex and hope to take advantage of any sharp rallies to strategically place puts from time to time. I realized the grade of the wheat stocks isn't that good but the overall world supply remains high. Meanwhile, I still want to see the July Minneapolis wheat contract settle over 580 and KC along with Chicago over 500 again to feel better about any rallies continuing. Oats made their worst low and close in a couple of weeks and, while still in a long term downtrend, are keeping me on the sidelines for now. I want to see a close over 215 to possibly give me a buy signal while they're in their nearest support area at this time. Rice continues to trend higher culminating in their best high and close since the middle of February and now in some resistance. I 'flat out' missed a buy signal and now will stand aside waiting for a close over 1160 to give me a possible buy. They can be sold against that happening though. Corn is now back in its 350 to 400 range which now becomes a strong support area. I find it really tough to take a position in either direction but will hold on to my buy signal from before. Corn had been helped by the beans and meal for a while but not anymore at this time as evidenced by the charts below. The beans and meal had their highest highs since November and August respectively before settling lower in reversal type action with little support nearby. Both have been strong with Argentina's weather problems along with the falling dollar and rising real. Remember, most bull and bear markets are lead by the meal due to the crush breakdown and the margins have been gradually improving.  Oil has been falling over the last couple of weeks giving me a SELL SIGNAL last Friday.BUY SIGNALS FOR MINNEAPOLIS AND CHICAGO WHEAT, SOYBEANS. SOYBEAN MEAL AND CORN WHILE A SELL SIGNAL FOR SOYBEAN OIL.  For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.

 


MINNEAPOLIS KANSAS CITY SPREADS EXPLODE.

Posted on 5/4/2016 6:40:10 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

 

 

WE HAVE A VERY GOOD HEDGING DEPARTMENT HEADED BY TED SEIFRIED. WHY NOT TALK TO HIM OR ANY OF OUR OTHER HEDGING BROKERS. NO ONE WILL PRESSURE YOU AND WHAT HAVE YOU GOT TO LOSE?  I'VE BEEN A LICENSED FUTURES BROKER FOR OVER 41 YEARS AND TRUST NO ONE MORE THAN TED AND HIS GROUP.

 

 

Higher close for rough rice while lower closes for Minneapolis, Kansas City and Chicago wheat along with oats, corn, soybeans, soybean meal and soybean oil. Basically, rough rice, soybeans and soybean meal have rallied since my last Wednesday's report while the rest of the grain complex has fallen. The Minneapolis, KC spreads have exploded with KC falling within shouting distance of its contract low. Looking at the charts below you wouldn't thing that they are both part of the wheat complex. Chicago is now back in a strong looking support area really in sideways action overall this year. Minneapolis keeps looking higher while KC is acting bearish. Three different types of wheat and three different chart formations. You don't see that very often. However, I still don't see any shortage of wheat now or on the horizon and expect that to be reflected in the market place when all is said and done. Also, Minneapolis continues to make higher highs and lows since the beginning of March. Like I mentioned last week, I don't trust the wheat complex and hope to take advantage of any sharp rallies to strategically put on puts from time to time. I realized the grade of the wheat stocks isn't that good but the overall world supply remains high. Meanwhile, I still want to see the July Minneapolis wheat contract settle over 580 and KC along with Chicago over 500 again to feel better about any rally continuing. Oats made their worst low and close in a coupled of week and, while still in a long term downtrend, are keeping me on the sidelines for now. I want to see a close over 215 to possibly give a buy signal while they are in their nearest support area at this time. Rice continues to trend higher culminating in their best high and close since the middle of February now in some resistance. I 'flat out' missed a buy signal and now will stand aside waiting for a close over 1160 to give a buy. They can be sold against that happening though. Corn is now back in its 350 to 400 range which now becomes a strong support area. I find it really tough to take a position in either direction but will hold on to my buy signal from before. Corn had been helped by the beans and meal for a while but not anymore at this time as evidenced by the charts below. The beans and meal had their highest highs since November and August respectively before settling lower in reversal type action with little support nearby. Both have been strong with Argentina's weather problems along with the falling dollar and rising real. Remember, most bull and bear markets are lead by the meal due to the crush breakdown and the margins have been gradually improving.  Oil has been falling over the last couple of weeks giving me a SELL SIGNAL last Friday.BUY SIGNALS FOR MINNEAPOLIS AND CHICAGO WHEAT, SOYBEANS. SOYBEAN MEAL AND CORN WHILE A SELL SIGNAL FOR SOYBEAN OIL.  For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.

 


Zaner Ag Hedge: New High Close, Soybeans

Posted on 5/2/2016 11:46:11 AM by: Matt McKinney, Market Strategist @ Zaner. 312-277-0115.

lDirect-312-277-0115, http://www.mmckinneyfutures.com/

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.

 

 

Zaner Ag Hedge: New High Close, Soybeans

 

As The Trading Week Begins, Soybeans Poise A New High Close For The Move And The Year.

 

Fundamentally, the bullish trend higher for Soybeans remains in tact. Whether it be floods in Argentina or a weaker U.S. Dollar Index, the market continues to push higher here in early May. In fact, on the September futures, Soybeans have spiked from a low of about $8.64/bushel on March 2nd to a new high close for the move and the year of about $10.29/bushel on May 2nd. On long will this go on?

Technically, I have added my favorite technical indicators to the daily chart below. I have coined them the "10/20/50/BB Trend Finder". They are the 10 (red line), 20 (green line), and the 50 (blue line) day Simple Moving Averages or SMA's. I have also added Bollinger Bands or BB's (light blue shaded area) and Candlesticks (the red and green bars with the candle stick wicks, and on this daily chart each bar represents one day of trading). These few technical indicators can tell me many, many different characteristics about the market at a quick glance so I have them saved on my charts in MARKETHEAD, so they can populate on any chart I choose at the click of a mouse.

The Soybean market is in what I refer to as a PRINCIPAL TREND higher which is the strongest form of an upward trend that my technicals can show me. This PRINCIPAL TREND up occurs when the 10 day SMA crosses up and over the 20 day SMA and the market trades above the 10 day SMA using it as support.

In addition, while the trend is up in a big way, Soybeans are oversold. This is indicated to me by the fact that the market is trading so high above the SMA's.  

 

 

I figured all this out by putting my "10/20/50/BB Trend Finder" on the chart above and applying these indicators to the charts at the click of a mouse which I found at: http://www.markethead.com/2.0/free_trial.asp?ap=mmckinne , which is a web application that we have developed for our clients called MARKETHEAD where I get about 70-80% of all my research from. That means I get both technical and fundamental research from this web app and I am a veteran series 3 Broker of 17 years. So if I'm using it then maybe my readers should check it out. Yes? 

 

Ag Hedge:

One strategy that could be used here is to buy limited risk calls or bull call spreads and in a three to one ratio a put. I have unofficially named this strategy a "long straddle" or a "ratio spread"

For exact details on this strategy, months, expiration dates, strike prices, and number of positions feel free to contact me at 312-277-0115 or mmckinney@zaner.com .

 

CME Options On Futures: The Basics: http://www.zaner.com/offers/?page=9&ap=mmckinne

 

FREE QUOTE- "We should not look back unless it is to derive useful lessons from past errors, and for the purpose of profiting by dearly bought experience." -George Washington

 

 

 

 

FUTURES, OPTIONS AND FOREX TRADING IS SPECULATIVE IN NATURE AND INVOLVES SUBSTANTIAL RISK OF LOSS. THESE RECOMMENDATIONS ARE A SOLICITATION FOR ENTERING INTO DERIVATIVES TRANSACTIONS. ALL KNOWN NEWS AND EVENTS HAVE ALREADY BEEN FACTORED INTO THE PRICE OF THE UNDERLYING DERIVATIVES DISCUSSED. FROM TIME TO TIME PERSONS AFFILIATED WITH ZANER, OR ITS ASSOCIATED COMPANIES, MAY HAVE POSITIONS IN RECOMMENDED AND OTHER DERIVATIVES.

 

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERDLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STICKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT OPTIONS PRICES MAY ONLY MOVE A LITTLE.

THE LIMITED RISK CHARACTERISTIC OF OPTIONS REFERS TO LONG OPTIONS ONLY AND REFERS TO THE AMOUNT OF THE LOSS, WHICH IS DEFINED AS THE PREMIUM PAID ON THE OPTION(S) PLUS FEES.


BASICALLY HOLDING GAINS WHILE BEAN CRUSH MARGINS CONTINUE TO IMPROVE

Posted on 4/27/2016 6:32:32 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

 

WE HAVE A VERY GOOD HEDGING DEPARTMENT HEADED BY TED SEIFRIED. WHY NOT TALK TO HIM OR ANY OF OUR OTHER HEDGING BROKERS. NO ONE WILL PRESSURE YOU AND WHAT HAVE YOU GOT TO LOSE?  I'VE BEEN A LICENSED FUTURES BROKER FOR OVER 41 YEARS AND TRUST NO ONE MORE THAN TED AND HIS GROUP.

 

 

Higher closes for Minneapolis, Kansas City and Chicago wheat along with corn, rough rice soybeans, soybean meal and soybean oil while lower for oats. Dry conditions in Oklahoma, Kansas and Texas along with parts of Canada, the Black Sea and Australia while wet conditions in other parts of Canada along with Brazil have helped to sustain the grains overall at this time. We saw Minneapolis (best high since 10/4/15), KC (12/18/15) and Chicago (11/9/15) spike up last Thursday and close down in reversal type action that lasted a couple of days before the wheat complex rebounded partway back so far. After the smoke cleared we see below that Minneapolis continues to gain over KC with the former making higher highs and lows since the beginning of March while the latter has been basically been range bound between 450 and 500 since the middle of December. I managed to buy July 500 wheat puts and dump them out at a decent profit after holding them just a couple of days. Like I mentioned before,I still don't trust the wheat complex and hope to take advantage of any sharp rallies in the same manner until it doesn't work anymore. I realized the grade of the wheat stocks isn't that good but the overall world supply is pretty high. Meanwhile, I want to see the July Minneapolis wheat contract settle over 580 and KC over 500 again to feel better about the rally continuing. KC is now in a decent resistance area and should continue to lag behind Minneapolis keeping me on the sidelines. Chicago looks better than KC but not as strong as Minneapolis which gives me reason for concern for how much higher the wheat complex will go. I trade off of technicals for timing but we all know it's the fundamentals that dictate long term trends in the end. Oats also made their best high since 12/30/15 before  reversing last week and, while not giving me a buy signal, has caused me to stand aside for now. I want to see a close over 215 to possibly give a buy signal. It does show signs of bottoming type action in my opinion. On the other hand rice has been rallying since late February  and is nearing its 1980 resistance area. I will continue to keep my sell signal for the long term but I may have 'missed the boat' on this one. Corn gave me a buy signal a week ago Monday but I still want to see a close over four dollars. I'm having trouble with this rally after its last very bearish grain report but as I like to say' it is what it is' and the MARKET IS NEVER WRONG. Obviously, corn has been helped by the beans and meal and, let's face it, the corn and bean complex generally go in tandem. The last time corn closed over four dollars was 10/15/16. The bean complex had received a nice boost from the dry weather in Brazil (mostly affecting corn though) and wet weather in Argentina (beans) along with a rising Brazilian real and a falling dollar. Remember, most bull and bear markets are lead by the meal due to the crush breakdown and the margins have been gradually improving. Beans had their highest high last week since1/2/16 and the meal since early August last year. Oil remains basically stagnant with the meal/oil spreads working in favor of the meal. BUY SIGNALS FOR MINNEAPOLIS AND CHICAGO WHEAT, SOYBEANS. SOYBEAN MEAL, SOYBEAN OIL AND CORN. SELL SIGNAL FOR ROUGH RICE.  For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.

 

 


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