Saturday, April 30, 2011

Charts - Trades from Midwest Cooperative’s Marketing Hour Round table

Below are charts as well as the trades that the memebers of this blog placed in our first MWC Marketing Hour Round Table!

The MWC Marketing Hour Round Table is something new that we just started this past week; it is weekly at 3:30; either Wed or Thursday.  It is new and a little work in process.  Here was the agenda from last week.

3:30 – Update on weekly happenings
Ideas on fundamental what happened past days in markets

The Next MWC Marketing Hour Round Table will be Wed the 6th.
We invite you to all attend next week and the coming week's sessions; our intent is to one day turn this meetings into some sort of marketing club for our local producers.
A rather crazy week as some of the charts and info below indicates.  With the snow blowing here this afternoon I have to wonder if the volatility we have seen is simply just a beginning.

5:00 – Mock trading 4:30 – Option Strategies3:45 – Chart updates- Corn, Beans, KC, MPLS, CBOT Wheat,

Neutral Nick update - Now this is more like it

Neutral Nick update 4-29-11
Nick squared up his positions as he once again tries to put his broker’s kid’s threw college; while not losing the farm and hopefully adding to an already big picture.
If you remember Nick decided to play the delta bushel equivalent game; keeping 100,000 bushels of corn, soybeans, and wheat sold.
Corn Trades
These and all trades are now July options; if you remember he exit’s all trades when the July options expire. That is the good thing about this project he took on.
Sold 200 of the July 7.00 Corn puts
Sold 300 of the July 6.50 Corn Puts
Sold 90 of the July 9.00 Corn calls
Wheat trades
Sold 200 of the 9.50 calls
Sold 200 of the 9.00 calls
Sold 250 of the 8.50 calls
Sold 125 of the 7.00 Puts
All July – All CBOT Wheat
Bean Trades
Sold 130 July 13.40 Bean Puts
Sold 50 July 15.00 Bean Calls

Tuesday, April 26, 2011

KC July Wheat Chart - Dec Corn chart......what do they tell you?

Here are a couple charts

What do they tell you?

they tell me...........cautious

Look at the Dec corn action on Tuesday...........wouldn't have thought we had a crop progress report that showed corn planting only at 9 %.

Sunday, April 24, 2011

Super Strong Grain Markets as the Grain Markets Open very strong Easter Sunday

The Grain Markets opened very strong Easter Sunday; wheat and corn both up 10-20 cents.  Will they hold come Monday?

They have slowed down after trading the past couple hours but are still very strong, MPLS wheat is leading the way so far.  Old crop corn has gained about 7 cents on the new crop contract which is back near resistance.

The thing that really is starting to stick out to me is the fact that we seem to have too many jumping on the bull bandwagon for commodities in general.  Same on the bear bandwagon with the US Dollar; I can't remember the last time I seen or heard something from any source that was friendly the US Dollar.

It is and has always been impossible to determine tops in the markets until well after the fact; but it just feels like we are simply one or two re-test failures away for many of the grains.

Bottom line looks to me like some volatile days ahead......perhaps these markets simply go straight up; but then again maybe some headfakes happen along the way and just perhaps the ending destination (price) isn't exactly where everyone thinks it will be.

After all don't things always look the best and brightest at the top and the darkest at the botttom?

Neutral Nick - Closed May Positions

Here is a run down of all of Nick's closed/booked May option trades; as mentioned he closed via MOC to offset.

MOC - is short for market on close; typically a market order on the floor done in the final minutes of trade; they don't GTD that the price closes there; but they are one of the common orders placed when one is trying to hedge at or near the closing price. 

The table showing Nick's loses looks a little dissapointing; but

Thursday, April 21, 2011

Couple of Dec Corn Charts

Here are a couple of Decemeber Corn Charts.  First is a 60 min chart, the next chart is a daily Corn Chart, and the last is a weekly Dec corn chart.

Neutral Nick update - Quest to make it big!!! or is it a quest to go BROKE?

Nick had to adjust his position today as May options went off the board
He did book some gains and losses off of these. He exited via MOC closes needed to offset any positions that where to come into his account; later in the weekend we should get those results up. Will need to add those to the present projections to get the total picture; but most of the closed positions have been small in comparison to what he has on the books. (Roughly 15k loss in wheat, 600k in corn, and 172k in beans- the corn number seems big but it was offset as the below shows via gains on other trades in the July.)
These are the trades he added today to get his back towards goal of short 100,000 DELTA bushels of each of the big three – Corn, Beans, Wheat
- All of today’s trades are off of the July contract
Wheat – Sold 100
750 puts
Sold 45 of the 900 Puts
Sold 200 of the 800 puts
Purchased 50 of the 850 calls and sold 100 of the 900 calls
Corn trades sold all of the following July options
Beans – Sold the following July Puts
200 of the 1300 Puts
220 of the 1260 Puts
300 of the 1200 Puts
300 of the 1160 Puts

Bottom line Nick looks to be sitting great if he can adjust fast enought, not run out of margin money, and try and focus on keeping the green line or profits/losses at the time when options expire in the middle of a rather big hump.  As you can see some of the edges look like cliff's so he has plenty of risk out there and one wrong move might cost him, his father, and his brother thier farms.

Time will tell how lucky our Neutral Nick is.

As always make sure that you realize futures and options are not for everyone. 
200 of the 8.00 Calls
200 of the 7.50 Calls
200 of the 8.50 Calls
100 of the 9.00 Calls
75 of the 7.00 Calls

Monday, April 18, 2011

Closing Grain Market Comments - Commentary - Crop Progress update from USDA

Markets closed firmer across the boards for the grains today despite the very weak outside markets.

Corn was up 10 to 12 cents a bushel,  Beans where up 9-13 cents, KC wheat was up 31 cents, crush sunflowers where firmer by 20 cents to 65 cents a cwt, MPLS wheat was up 25, CBOT wheat was up 31, the US dollar was 700 points or so firmer with the June presently at 75.730, crude was off 2.50ish a barrel, and the equities where under pressure with the DOW down 140 points.  Perhaps the fact that the outside closed well above their low’s was a win for the bulls?

Weather has been dry in the HRW areas of the US as well as part off Europe.  This along with the wet weather preventing spring wheat planting really helped wheat lead the way today despite the very weak outside markets.  The thing I didn’t really understand is that most of the news for wheat is what we have been talking about the last week or so; while last week the market didn’t seem to care.  I guess that is why the market is the market; perhaps it was simply the fact that we didn’t quiet see as much moisture as we thought we could in some places of KS?  But I really thought the weather deal was old news; so even though I agree that we should see some sort of premium built into the wheat because of it I don’t understand why it happened when it did.  Perhaps we just had to have a head fake and get more weak longs out? 

Last week much of the pressure for the grains seems to steam from funds getting out of commodities across the board.  I would think that pressure resurfaces if we see many more days of the outside markets getting beat up.

Export inspections where out this a.m. and they where good for wheat, ok to poor for corn, and ok for beans.  Nothing to really write home about as no real surprises although it was good to see wheat come in above what is needed on a per week basis to meet current USDA projections.

This afternoon we had a crop progress report that showed corn 7 % planted versus 8 % on average.  This was inline with the pre-report estimates I have been hearing.

Below is a link for more information on the crop progress.

We did add another new crop Act of God Sunflower contract today; the price is a little better then it has been; the contract is a High Oleic contract; please give us a call for more information.

Wheat basis is very hit and miss on spring wheat; while winter wheat feels steady to better.  I did offer plenty of winter wheat trains out today; with little to no response; but my offers where on the high side and just the fact buyers where looking on a day when the board was up 30 cents has to be somewhat encouraging.

Keep in mind that wheat fundamentally might look bullish because of the weather as does corn look fundamentally friendly because of the lack of planting, tight old crop stocks, and acres needed; that history has shown us many times in the past when everything has seemed to be bullish and then just months later everything is bearish with the sky falling.  Remember the last time we seen corn at these type of levels; June-July 2008; where did Dec corn get to in Dec of 2008; under 3.00 a bushel. 

Things change in a hurry in our markets and the price action we have seen should show us or at least put in the back of our mind that the biggest fundamental is money flow.  At any time on any day we are subject to see money simply flow out and not just for a day.  I say this not to scare one into selling or not selling; but to remind one to use good risk management that has a back ground of not going broke via making profitable sales.

Please give us a call if there is anything we can do for you.

Open Grain Market Comments 4-18-11 Strong Markets Despite Weak Outside Markets

Markets are called mixed this a.m. behind a mixed to supportive overnight session and weak outside markets.

In the overnight session wheat was strong with KC wheat up 14 cents, MPLS wheat was up 13-16, CBOT wheat was up 12, beans where unchanged, old crop corn continued to lose ground to new crop corn as old crop corn was down 3 and new crop corn was up 5 cents.  At 8:45 outside markets have the equities getting smashed with the DOW off 180 points, crude oil is off about 1.85 a barrel, and the US dollar is bouncing with the June up 357 at 75.385.

Today good be lining up to be another volatile session as outside markets at 9:20 have broken even harder with crude down about 2.80 and the equities now have the DOW down 220 plus points, with the dollar stronger also.  Mention of Greek default has outside markets under severe pressure; based on how where the outside markets where at when the grains closed we could see the markets open a little weaker then where the overnights left off at and if they can show some strength after that it would be a great sign for our grains.

I didn’t get these comments out before the market opened up; but it did end up opening a little weaker then the overnight session left off at. The good thing is it quickly threw aside the weaker open and now a little after 10 we have all the grains rather strong.  Wheat is up 30ish, beans about a dime, and corn still has old crop lagging the new crop with old crop up a nickel and new crop corn up 7-8 cents.  The one thing that is scary is the price action of the US Dollar with the June up 882 at 75.910.

I do wonder where the grains would be at if we would have the opposite price action in the outside markets; if we would have crude up 2-3 a barrel, the US dollar sharply lower, and the DOW up a couple hundred points instead of down a couple hundred points. 

Along those same lines with the weak outside markets how strong of a rally is today’s rally.  The price action today lines up much better then the price action last week did based on the ugly weather that isn’t allowing much spring wheat to get planted nor is it adding to the size of the HRW crop.

This afternoon we do have crop progress and crop conditions out; market is looking for not much planted and no improvement in the HRW crop. 

Basis was firmer going home last week; with a nice bounce in the board it will be interesting to see if HRW basis can continue to show some strength. 

Please give us a call if there is anything we can do for you.

Friday, April 15, 2011

Grain Markets Closing Grain Charts for April 15th - Weekly, Daily, Monthly Charts with trends for various commodities

Below are various charts on Corn, KC wheat, MPLS Wheat, CBOT Wheat, Soybeans, Crude Oil, Equity Marktets, and the US Dollar Index

To start with however is an option trade for producers to look at for hedging new crop corn; I like this strategy over nearly all other basic hedge strategies because it out performs nearly all of them over a wide range of prices.  It doesn't out perform all strategies on big breaks or big advances.

The strategy is selling an in the money call option, buying two more call options that are at the money and then selling 2 more call options out of the money.  I don't think this trade can be done with the same type of P L Graph with fewer trades but if it could then fewer traders would obvisouly be better.


The above trades used DEC Corn; done with option closing prices April 15th
Sold 1) 6.10 Call
Purchase 2) 6.60 calls
Sold 2) 7.20 Calls

Trade not bad as spec move as it can win if prices go up, prices go down, or even if prices go side ways, but won’t be a winner in big up market; breakeven or unlimited losses start at $7.83 on the Dec contract which closed at $6.56 per bushel

Here are the Charts