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.

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.

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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.


Zaner Ag Hedge: Brexit, USD, and Grains

Posted on 6/25/2016 8:27:40 AM by: Matt McKinney, Market Strategist @ Zaner. 312-277-0115.

Zaner Ag Hedge: Brexit, USD, and Grains

Among other fall out, the surprising Brexit vote caused a rising USD Index putting pressure on dollar traded commodities like the Corn, Beans.

 

Fundamentally, the exit from the European Union had ramifications across the board. Corn and Soybeans were not immune. As the USD Index took off, the British Pound and Euro Currency plummeted, Corn fell further and Soybeans sank below critical support.

As the votes were cast on Thursday evening it became very clear the bookies in the UK who called for just a one in four chance that Britain would leave were wrong. Or were they wrong? That's a whole different discussion. Anyway, when is the collapse in the Corn going to end and will the next area of support hold in the Soybeans?

Initially, weather should now take a front seat to the Grain price action and this Brexit vote should be in the back ground. However, Brexit has just brought on more uncertainty. Just a few questions are who will be the next Prime Minister, will Scotland bail, and will a petition for a re-vote that already has a thousand signatures make it? All these questions and many more will have an impact on Grain prices.

The latest weather forecast is bearish, Brexit is bearish, and a strong USD Index is bearish for Grains. The latest forecast calls for cooler than expected temps and more precipitation. Below is a drought map, by weather channel. There is not much area that is severly dry let alone excessively dry. Overall good for crops, bearish for prices for now- but remember it is a La Nina year.

 

Palmer Drought Severity  
Palmer Drought Severity

 

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 chart above, none of my indicators have held. The market has plummeted below the 10 day SMA, the 20 day SMA, and now the 50 day SMA. Because they didn't hold starting with the 10 day SMA, I noticed the change in trend early on. For the next area of support contact me.

On the daily Soybean chart above the market has plummeted below the 10 day SMA, the 20 day SMA and is quickly approaching the 50 day SMA. Also note that the 10 day SMA has curled lower and is now pointing down indicating a change in trend to down in the near term. 

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 puts or bear put spreads and in a three to one ratio a call. 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.


What is a Brexit and Why does Corn Care?

Posted on 6/23/2016 6:02:16 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

Brexit is the term that refers to the possibility of the United Kingdom leaving the European Union.  In the last few weeks there has been debate in and out of the UK about what impact Brexit might have on the UK and the global economy.  June 23rd was decision day for the UK public.  While it may not seem like a vote in the UK will have an impact on the corn market it certainly can and may already have.

From a global market standpoint the market analysts think that if the UK were to leave the EU it would have a negative impact on their economy and currency.  Outside of the UK Brexit would weaken the EU, the EU economy and possibly the Euro.  So, if the British Pound and the Euro are weakened by a "yes" vote for Brexit it could have a significantly bullish effect on the US$ and put pressure on commodities as a whole.  Going into the vote polls showed an almost 50-50% chance of Brexit.

So, the Brexit decision may have an impact on the corn market.  However, we may have already seen a substantial impact on corn from Brexit before the vote even began.  Commodity firms and exchanges we raising margin requirements on certain futures contracts that they believes could be highly volatile after the Brexit announcement.  This alone may have had a big impact on corn.

While corn margins remained unchanged from the exchanges it is important to understand how many of the large speculators work.  In general funds will have a certain percentage of a commodity or currency or equity that they would like to have in their portfolio.  And, when margin requirements go up on one or more of those contracts they have to decide if they would like to margin up or reduce the position.  In many cases the simplest route is to reduce positions.  However, when they are reducing positions in some contracts it can throw the balance out of whack and to rebalance they may need to reduce positions else where as well.

So corn, even though corn margins did not go higher, may have found some fund liquidation based on a rebalancing of their position.  There is also the idea that many of the large speculators were looking to lower their risk before the Brexit vote.  This may have contributed to some fund selling as well.

I am by no means saying that this is the only factor driving the sharp drop in the corn market this week, but I am saying that it hasn't helped.  Weather forecasts have gotten less threatening for some areas and the market responded by pulling some premium out.  But, the fund liquidation may have been happening for many reasons.  It will be interesting to see what happens once Brexit is behind us.  Will the funds want to return to corn and commodities as a whole?

*Side note, fun game - drink when you hear Brexit.  If that's you sort of thing.  I for one am tired of saying it.

*My boss says drink water

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


What is a Brexit and Why does Corn Care?

Posted on 6/23/2016 5:29:21 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

Brexit is the term that refers to the possibility of the United Kingdom leaving the European Union.  In the last few weeks there has been debate in and out of the UK about what impact Brexit might have on the UK and the global economy.  June 23rd was decision day for the UK public.  While it may not seem like a vote in the UK will have an impact on the corn market it certainly can and may already have.

From a global market standpoint the market analysts think that if the UK were to leave the EU it would have a negative impact on their economy and currency.  Outside of the UK Brexit would weaken the EU, the EU economy and possibly the Euro.  So, if the British Pound and the Euro are weakened by a "yes" vote for Brexit it could have a significantly bullish effect on the US$ and put pressure on commodities as a whole.  Going into the vote polls showed an almost 50-50% chance of Brexit.

So, the Brexit decision may have an impact on the corn market.  However, we may have already seen a substantial impact on corn from Brexit before the vote even began.  Commodity firms and exchanges we raising margin requirements on certain futures contracts that they believes could be highly volatile after the Brexit announcement.  This alone may have had a big impact on corn.

While corn margins remained unchanged from the exchanges it is important to understand how many of the large speculators work.  In general funds will have a certain percentage of a commodity or currency or equity that they would like to have in their portfolio.  And, when margin requirements go up on one or more of those contracts they have to decide if they would like to margin up or reduce the position.  In many cases the simplest route is to reduce positions.  However, when they are reducing positions in some contracts it can throw the balance out of whack and to rebalance they may need to reduce positions else where as well.

So corn, even though corn margins did not go higher, may have found some fund liquidation based on a rebalancing of their position.  There is also the idea that many of the large speculators were looking to lower their risk before the Brexit vote.  This may have contributed to some fund selling as well.

I am by no means saying that this is the only factor driving the sharp drop in the corn market this week, but I am saying that it hasn't helped.  Weather forecasts have gotten less threatening for some areas and the market responded by pulling some premium out.  But, the fund liquidation may have been happening for many reasons.  It will be interesting to see what happens once Brexit is behind us.  Will the funds want to return to corn and commodities as a whole?

*Side note, fun game - drink when you hear Brexit.  If that's you sort of thing.  I for one am tired of saying it.

*My boss says drink water

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


Zaner Ag Hedge: Corn Gets Slammed Ahead Of Brexit

Posted on 6/22/2016 3:32:23 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.

 

Zaner Ag Hedge: Corn Gets Slammed Ahead Of Brexit

Funds Sold Corn More Than 45 Cents/Bushel Of Off The Highs Ahead Of The Brexit Vote Pulling The Market Below Multiple Areas Of Critical Support.

 

Fundamentally, the funds sold corn and took profits ahead of the Brexit vote on Thursday. Final polling results are expected to be reported on Friday morning. With so much uncertainty surrounding the vote and whether Britain leaves or remains in the Euro, we saw Funds take profits in Corn after a beautiful spring rally in the yellow grain.

Its really quite simple, the way I see it. If you are a farmer you want Britain to remain in the Euro. Here is why. If Britain exits the Euro that leaves Germany as the sole player left in the currency with a bunch of other unproductive, drowning in debt nations. Then the Euro tanks, the USD Index rallies, and commodities like Corn and Beans plummet.

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 chart above, none of my indicators have held. The market has plummeted below the 10 day SMA, the 20 day SMA, and now the 50 day SMA. Because they didn't hold starting with the 10 day SMA, I noticed the change in trend early on.

 

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.


WEATHER CAUSED LOWER GRAIN COMPLEX, LED BY CORN, SINCE LAST WEEK'S REPORT

Posted on 6/22/2016 7:15:32 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 43 YEARS AND TRUST NO ONE MORE THAN TED AND HIS GROUP.

 

 

Higher close for oats while lower closes for corn, rough rice, Minneapolis, Kansas City and Chicago wheat along with soybeans, soybean meal and soybean oil. The wheat complex has been pulled down by the rest of the grain market due to more favorable weather forecasts. Of course, North Dakota may not agree with this assessment since severe drought conditions plague the south central section while flooding has been causing problems in the valley!  I would continue to only trade Minneapolis (lowest low and close in 3 weeks)off the extremes of their range (525 - 565) started back on March 15th no matter what news comes out until that doesn't work anymore. KC just made a new CONTRACT LOW AND CLOSE breaking out of its 460 to 520 range since December ending the same idea for this grain while leaving a nice size resistance area overhead. Chicago's range continues to be in a trading range between 465 to 530 started in early November but now being tested since falling over the last couple of weeks culminating in its worst low and close in a month. Oats also continue to be in a trading range (210 to 230) since December now acting like they will test the lower end of said range.There's good support under 220 (Dec.) but continue to look for better markets to trade at this time. Rice has leveled off since late May and should also be avoided for now even if its uptrend is hanging on by a thread. However, rice does look like it's in a possible BULLTRIANGLE at this time. Corn has plunged (worst low and close in almost 3 weeks) over the last couple of sessions with more favorable weather forecasts but its roller coaster ride should continue for who knows how long. Be long on setbacks since previous reports have been bullish or just stay out of its way for now. Any sign of decent rain could plummet corn more as I said last week. As always the four dollar area is a key price area to watch. The beans and meal have also fallen recently led by corn and more favorable weather forecasts. Meanwhile, the bean complex had its worst low and close in two weeks emphasizing what I just said. I feel beans need to hold the 1020 area and meal around 370. Oil continues to look weak and could be in a possible BEAR PENNANT while needing to hold 3150 in my opinion.BUY SIGNAL FOR SOYBEANS. SOYBEAN MEAL, ROUGH RICE AND CORN. SELL SIGNAL FOR SOYBEAN OIL.  For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.

 


WEATHER CAUSED LOWER GRAIN COMPLEX, LED BY CORN, SINCE LAST WEEK'S REPORT

Posted on 6/22/2016 7:15:22 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 oats while lower closes for corn, rough rice, Minneapolis, Kansas City and Chicago wheat along with soybeans, soybean meal and soybean oil. The wheat complex has been pulled down by the rest of the grain market due to more favorable weather forecasts. Of course, North Dakota may not agree with this assessment since severe drought conditions plague the south central section while flooding has been causing problems in the valley!  I would continue to only trade Minneapolis (lowest low and close in 3 weeks)off the extremes of their range (525 - 565) started back on March 15th no matter what news comes out until that doesn't work anymore. KC just made a new CONTRACT LOW AND CLOSE breaking out of its 460 to 520 range since December ending the same idea for this grain while leaving a nice size resistance area overhead. Chicago's range continues to be in a trading range between 465 to 530 started in early November but now being tested since falling over the last couple of weeks culminating in its worst low and close in a month. Oats also continue to be in a trading range (210 to 230) since December now acting like they will test the lower end of said range.There's good support under 220 (Dec.) but continue to look for better markets to trade at this time. Rice has leveled off since late May and should also be avoided for now even if its uptrend is hanging on by a thread. However, rice does look like it's in a possible BULLTRIANGLE at this time. Corn has plunged (worst low and close in almost 3 weeks) over the last couple of sessions with more favorable weather forecasts but its roller coaster ride should continue for who knows how long. Be long on setbacks since previous reports have been bullish or just stay out of its way for now. Any sign of decent rain could plummet corn more as I said last week. As always the four dollar area is a key price area to watch. The beans and meal have also fallen recently led by corn and more favorable weather forecasts. Meanwhile, the bean complex had its worst low and close in two weeks emphasizing what I just said. I feel beans need to hold the 1020 area and meal around 370. Oil continues to look weak and could be in a possible BEAR PENNANT while needing to hold 3150 in my opinion.BUY SIGNAL FOR SOYBEANS. SOYBEAN MEAL, ROUGH RICE AND CORN. SELL SIGNAL FOR SOYBEAN OIL.  For additional charts, quotes, news, commentary & more, sign up for a FREE 30 -day trial to markethead.com.

 


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