USDA Crop Report

News & commentary on the USDA Crop Report and Grain Futures markets including wheat, soybeans, corn & more

USDA Crop Report is a blog dedicated to bringing updates, news and commentary on the USDA Crop Report and the grain futures markets including wheat, corn, soybeans and more.

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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.


LOWER YEILDS IN ARGENTINA (BEANS). DRY WEATHER IN BRAZIL (CORN) AND SOUTH AFRICA (CORN)

Posted on 5/25/2016 7:11:42 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 43 YEARS AND TRUST NO ONE MORE THAN TED AND HIS GROUP.

 

 

Higher close for soybean meal while lower for Minneapolis, Kansas City and Chicago wheat along with rough rice, corn, soybeans and soybean oil. IN MY OPINION LOWER BEAN YIELDS IN ARGENTINA ALONG WITH DRY WEATHER IN BRAZIL AND SOUTH AFRICA SHOULDN'T HIDE THE FACT THAT, BARRING DROUGHT LIKE GROWING CONDITIONS IN THE UNITED STATES, THERE SHOULD STILL BE SUBSTANTIAL GRAIN STOCKS BY THE END OF THE YEAR. Of course, nothing is guaranteed or why should anyone like me be writing comments. The Minneapolis/KC wheat spreads stayed about the same since my last Wednesday's report which could be signifying a drop is imminent for Minneapolis. Also, Minneapolis (July) is now in a possible topping formation and needs to hold the 515 and especially the 500 area in my opinion. KC, after being unable to break through decent resistance looks poised to continue falling with little in the way of support underneath. Still, it hasn't taken out its contract low (key reversal) from May 12th giving the bulls some hope. Also, the grade of the wheat stocks isn't that good but the overall world supply remains high and should continue to keep a lid on how high the wheat prices will go. I still want to see the July Minneapolis wheat contract settle over 580 and KC along with Chicago over 500 but that seems to be fading in the distance. Finally, I feel Chicago needs to hold the 450 area basis the July contract. TO SUM UP THE WHEAT COMPLEX, ALL THREE WHEAT HAVE BEEN IN DOWNTRENDS SINCE THE JULY CONTRACT CAME ON THE BOARD!  While oats overall have been in a down trend since last December, they continue to hold their lows since the beginning of March and need to hold 180 are and close above 215 to possibly give me a buy signal. Rice has finally been correcting and now is closing in on its nearest support area (below 1140). Meanwhile, corn continues to rally being helped by dry weather conditions mentioned above and a very strong meal market. December has already settled over four dollars and July isn't far behind. I FEEL THE KEY FOR CORN IS TO KEEP AN EYE ON THE SOYMEAL MARKET FOR GUIDANCE. Due to surprisingly lower bean stock estimates on its last report a couple of weeks ago coupled with lower yield estimates in Argentina, the beans led by meal continue to look strong overall. I DON'T KNOW HOW FAR THE BEANS AND MEAL WILL GO BUT I WILL FOLLOW THE MEAL/OIL SPREADS CLOSELY. IF AND WHEN OIL BECOMES STRONGER THAN MEAL, THEN I WOULD LOOK FOR A POSSIBLE DECENT SIZE CORRECTION. Oil, meanwhile, resumed falling which culminated in its worst low and close since the beginning of March. BUY SIGNALS FOR MINNEAPOLIS WHEAT, SOYBEANS. SOYBEAN MEAL, ROUGH RICE AND CORN. SELL SIGNALS FOR KANSAS CITY WHEAT AND SOYBEAN OIL.  For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.

 


LOWER YEILDS IN ARGENTINA (BEANS). DRY WEATHER IN BRAZIL (CORN) AND SOUTH AFRICA (CORN)

Posted on 5/25/2016 7:11:33 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 43 YEARS AND TRUST NO ONE MORE THAN TED AND HIS GROUP.

 

 

Higher close for soybean meal while lower for Minneapolis, Kansas City and Chicago wheat along with rough rice, corn, soybeans and soybean oil. IN MY OPINION LOWER BEAN YIELDS IN ARGENTINA ALONG WITH DRY WEATHER IN BRAZIL AND SOUTH AFRICA SHOULDN'T HIDE THE FACT THAT, BARRING DROUGHT LIKE GROWING CONDITIONS IN THE UNITED STATES, THERE SHOULD STILL BE SUBSTANTIAL GRAIN STOCKS BY THE END OF THE YEAR. Of course, nothing is guaranteed or why should anyone like me be writing comments. The Minneapolis/KC wheat spreads stayed about the same since my last Wednesday's report which could be signifying a drop is imminent for Minneapolis. Also, Minneapolis (July) is now in a possible topping formation and needs to hold the 515 and especially the 500 area in my opinion. KC, after being unable to break through decent resistance looks poised to continue falling with little in the way of support underneath. Still, it hasn't taken out its contract low (key reversal) from May 12th giving the bulls some hope. Also, the grade of the wheat stocks isn't that good but the overall world supply remains high and should continue to keep a lid on how high the wheat prices will go. I still want to see the July Minneapolis wheat contract settle over 580 and KC along with Chicago over 500 but that seems to be fading in the distance. Finally, I feel Chicago needs to hold the 450 area basis the July contract. TO SUM UP THE WHEAT COMPLEX, ALL THREE WHEAT HAVE BEEN IN DOWNTRENDS SINCE THE JULY CONTRACT CAME ON THE BOARD!  While oats overall have been in a down trend since last December, they continue to hold their lows since the beginning of March and need to hold 180 are and close above 215 to possibly give me a buy signal. Rice has finally been correcting and now is closing in on its nearest support area (below 1140). Meanwhile, corn continues to rally being helped by dry weather conditions mentioned above and a very strong meal market. December has already settled over four dollars and July isn't far behind. I FEEL THE KEY FOR CORN IS TO KEEP AN EYE ON THE SOYMEAL MARKET FOR GUIDANCE. Due to surprisingly lower bean stock estimates on its last report a couple of weeks ago coupled with lower yield estimates in Argentina, the beans led by meal continue to look strong overall. I DON'T KNOW HOW FAR THE BEANS AND MEAL WILL GO BUT I WILL FOLLOW THE MEAL/OIL SPREADS CLOSELY. IF AND WHEN OIL BECOMES STRONGER THAN MEAL, THEN I WOULD LOOK FOR A POSSIBLE DECENT SIZE CORRECTION. Oil, meanwhile, resumed falling which culminated in its worst low and close since the beginning of March. BUY SIGNALS FOR MINNEAPOLIS WHEAT, SOYBEANS. SOYBEAN MEAL, ROUGH RICE AND CORN. SELL SIGNALS FOR KANSAS CITY WHEAT AND SOYBEAN OIL.  For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.

 


Option Play: Corn Shuns $4/Bushel

Posted on 5/24/2016 3:27:41 PM by: Matt McKinney, Market Strategist @ Zaner. 312-277-0115.

Direct-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.

 

Option Play: Corn Shuns $4/Bushel

For The Seventh Time In The Last Month Corn Gets Weak In The Knees At The $4/Bushel Area.

 

Fundamentally, the vast majority of the Corn is plantd. It's in the eastern Corn belt that farmer's havent been able to get Corn in the ground due to wet conditions and as a result there is talk that farmer's in Ohio and Indiana may switch from Corn to Beans. Thats potentially bearish for Soybean prices. Recent price action would suggest that the Corn market is trying to take the lead and push around Beans prices.

Technically, I have added my favorite technical indicators to the charts 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 SMAs. I have also added Bollinger Bands or BBs (light blue shaded area) and Candlesticks (the red and green bars with the candlestick 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.

 

On the daily Corn chart above the market is still having trouble breaking above the $4/bushel mark. In fact it has flirted with the $4/bushel area at least seven times in the last month with no real success. In fact on the 24th of May and the 21st of April the market blasted through this area inter-session only to close below at the end of the trading day.

 

I figured all this out by putting my "10/20/50/BB Trend Finder" on the chart above and applying these indicators to the chart sat 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 Im using it then maybe my readers should check it out. Yes?

 

 

Zaner 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 ormmckinney@zaner.com.

 

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

 

FREE QUOTE- "Experience has taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that your generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you dont make."

-Donald Trump

 

 

 

 

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.


Options Play: Soybean Demand Remains Strong

Posted on 5/23/2016 8:17:30 AM by: Matt McKinney, Market Strategist @ Zaner. 312-277-0115.

Direct-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.

 

 

 

Options Play: Soybean Demand Remains Strong

 

The Demand For Soybeans From China Remains Extremely Bullish For Futures Prices Overall.

 

Fundamentally, there is a combination of bullish and bearish forces tugging at the Soybean market. On the bullish South American note, Soybean supplies are shrinking and there is talk that supplies will remain tight throughout the remainder of the year. In fact, according to Hightower reports, the Argentinian Soybean crop is only 61% harvested compared to 88% last year at this time and there is major quality concerns for that crop. Another bullish force pushing prices is the demand out of China which is robust.

On the bearish side of things is the situation here is the U.S. Soybeans for the most part are in the ground and the weather outlook is just suberb for growing. Although transitioning from El Nino to La Nina, weather forecasts have the potential to be the wildcard.

 

Technically, I have added my favorite technical indicators to the charts 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)period Simple Moving Averages or SMAs. I have also added Bollinger Bands or BBs (light blue shaded area) and Candlesticks (the red and green bars with the candlestick wicks, and on the daily chart below 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.

On the daily chart below, the market has tested and traded below the support of the 10 day SMA for the last three sessions.Next could be the support of the 20 day SMA.

 

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. However, the market is oversold on the weekly chart below and could be due for a correction down to the first area of support which is the 10 period SMA.

 

The market is currently overbought and in the process of changing trend on the monthly chart below. This is indicated to me by the fact that the 10 period and the 20 period SMAs are changing from pointing downward to curling sideways.

 

 

I figured all this out by putting my "10/20/50/BB Trend Finder" on the charts 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?

 

 

Options Play:

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 ormmckinney@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.


Soybean Meal Saves the Day! Again

Posted on 5/19/2016 4:47:02 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

Soybean futures were under significant pressure in the night session going into Thursday's trade.  Before the pit open export sales came out which were good for old crop soybeans and soybean oil, but once again disappointing for new crop soybeans.  Overnight the NOAA also released their new 3-month long term forecast which is looking for normal precipitation through August.  To add to the negative tone of the day the FED minutes released yesterday afternoon had almost all commodities leaning lower... Except Soybean meal.

Just before 11:00 AM on Thursday morning November soybeans were making new lows down 24 cents on the day.  Poor new crop export sales and a less threatening weather outlook from NOAA set a negative tone for soybeans this morning, but maybe the more important news came from yesterdays afternoon's Fed minutes.  The language the Fed is using is suggesting a high probability of a rate hike at the next Fed meeting.  The thought of a likely rate hike sent the US$ index sharply higher and most commodities lower as funds moved away from their inflationary bets. By the end of the day soybeans had recovered all but about 5 cents of losses closing almost 19 cents off of lows.  Front month July soybean meal was able to pull the soybean complex up by the bootstraps and erase what was looking like a nasty day.

Soybean meal started the day slightly higher despite significant pressure in soybeans and soybean oil.  Meal did actually go lower on the day for some time mid-session, but by the noon hour soybean meal came roaring back to close up over $4 on the day.  This set a new high and a new high close for the year and represents the highest values that front month soybean meal has traded since December of 2014.

I have talked at length in the last few months about how a slowdown in the crush had left the door open for a rally in soybean meal and an improvement in crush margins.  Two months ago the crush margin had gotten down to a multi-year low and the soybean crush had slowed dramatically.  In the last month and a half soybean meal has rallied sharply and crush margins have gone through the roof.  It is now a matter of time before meal stocks begin to build significantly and the strength in soybean meal could start to fall away.  Cash basis at the gulf has already started to weaken suggesting the meal stocks are building.  However, as today's trade proved, soybean meal may not be done with this rally just yet as speculators and technical traders ride the wave of this bull market.

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. 

July Corn Daily chart:

 

July Soybeans Daily chart:

July 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


December Corn sets a New High Close for the Year

Posted on 5/19/2016 4:17:57 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

On Tuesday the December corn contract posted it's highest close of 2016 at 403 3/4.  This is still slightly below the high of the year at 409 set back on April 21st.  However, on April 21st corn had a sharp reversal off highs while this time corn managed to close near the high of the day.  As corn approaches key resistance the question is - can we get through and move higher or will we see another failure in spectacular fashion?

Last time corn was above $4 a bushel is took a little over 24 hours before corn failed and fell back below the $4 mark.  Just about 24 hours later corn failed to hold the $3.80 mark.  So, with Dec corn back over $4 it will be interesting to see if it can hold it.  Guys had been looking to sell $4+ corn last time around so we will see how aggressively producers sell corn over $4 again.

Fundamentally this is a odd time of year for corn to be finding strength.  With corn planting progressing quickly it is difficult to justify corn rallying as the last 20% of acres get into the ground.  However, with soybeans rallying almost $2 since planting intentions were reported corn may have lost some acres to soybeans.  Maybe more importantly, the May USDA WASDE report estimated new crop corn carryover a 2.15 billion bushels. While this is a big number it is still smaller than what some "worst case scenario" guesser were at over 2.5 billion bushels.  This may open the door for weather premium.

The strength in the corn recently has been impressive, especially when planting is moving along at a fast pace.  Longer term we may have reasons to add weather premium to the corn market with a 2.15 billion bushel carry over using a 168 national average yield.  However, it will be interesting to see if corn can hold over the $4 level in the near term with a good forecast to finish planting.

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. 

July Corn Daily chart:

 

July Soybeans Daily chart:

July 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


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