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The 2007 crop year final numbers came out yesterday which painted a pretty tight supply situation for all the grains. I had to laugh at the commentators on the radio claiming the report was "bearish" beans. It wasn't bearish by any means just the fact that the report was above the trade guess on supply. Make no mistake about it, we are extremely tight and have no room for error this season.
Corn:
US SUPPLY (millions of bushels)
Beginning Stocks: 1304
Production: 13704
Total Supply: 14393
Total Use: 13110
Ending Stocks: 1283
Stocks to Use: 9.7%
The report increased usage and decreased Ending Stocks. That's an extremely bullish situation if you think about it. Either the USDA is yanking our chain or we really did increase usage at these price levels. Going into the report and having a bearish usage bias at these price levels, I was totally expecting usage to go lower. I've been trading the 2008 Dec/July bear spreads for awhile now. A stocks to use under 10% has me seriously thinking I should exit those positions. The 2009 bull spread Jul/Dec looks to stampede even at the spread's current high level at 58.
Beans:
US SUPPLY (millions of bushels)
Beginning Stocks: 574
Production: 2585
Total Supply: 3189
Total Use: 3009
Ending Stocks: 160
Stocks to Use: 5.3%
The report increased (very slightly) supply and ending stocks while decreasing (slightly) Usage. The report may have shown a slightly bearish tone to the bean fundamentals, but make no mistake about it. 5.3% stocks to use is crazy tight. If there is any weather scare this season, and you know there will be, I don't see how 15 dollar beans will hold it. The 2008 Jul/Nov bull spread has come down now under 100. Although realitively high, I would look to start entering that spread again. Increase 2008 crop year supply while 2007 crop year supply is so very tight and 200 might not hold that spread.
Thursday, April 10, 2008
Sunday, April 6, 2008
Weekly Chartbook
The chartbook has been updated to reflect last week's price action. A look at trends and indicators for:
Corn
Beans
KC Wheat
Live Cattle
Lean Hogs
chartbook
Corn
Beans
KC Wheat
Live Cattle
Lean Hogs
chartbook
Wednesday, April 2, 2008
The Website Change
I’ve changed things up a little bit. If there’s something you want to see added, changed, or whatever, let me know and I’ll see what I can do. Here’s what the website provides.Please note: Some of these pages have not been completed and are under construction.
Chartbook: Depending on my schedule, this is a weekly technical view of the trends, patterns, indicators, and my long/short term bias of a few markets that I follow. I am a trend trader. I rarely can pick tops bottom with any accuracy. I establish where the trend is going and hop on the train. The chartbook is geared towards this type of trading.
Spreads In Play: Spreads are a powerful part of trading. They can tell you a lot about the current trade sentiment and follow fundamentals pretty well. In volatile times I have really leaned on spreads to trade. They are less volatile, require less margin, and they can provide a pretty nice return for the portfolio. 90% of my trades are spreads. This section details the spreads I have money in and am watching closely.
Research: Results and/or data of trading research I’m experimenting with. Whether it is a new indicator I’m trying out, a new hedge method, or figuring out the best seasonal for a certain spread, this is where I’ll post my results.
Strategy: A list of proven strategies in trading.
Grain Statistics: A list of government reports and current fundamental data on the grains.
Cash & Basis: A lot can be gleaned by watching prices trends. In the long term, markets are driven by supply and demand. You can get a pretty good idea of demand by watching the cash market. If the cash market takes a dive at certain futures level, you know that a drop in futures may be on the horizon.
Need to Know: Here’s a detailed look at all the patterns and indicators I watch for. If you see that I have posted in the chartbook of a 1-2-3 top in corn but don’t know what it is, go here.
Tools: A list of often visited websites to aid me in my trading decisions.
FX Roundup. Exactly like the chartbook but only with currencies. Currencies, I love to trade them. I don’t make a whole lot trading them…..yet, but they are really fun to trade.
Chartbook: Depending on my schedule, this is a weekly technical view of the trends, patterns, indicators, and my long/short term bias of a few markets that I follow. I am a trend trader. I rarely can pick tops bottom with any accuracy. I establish where the trend is going and hop on the train. The chartbook is geared towards this type of trading.
Spreads In Play: Spreads are a powerful part of trading. They can tell you a lot about the current trade sentiment and follow fundamentals pretty well. In volatile times I have really leaned on spreads to trade. They are less volatile, require less margin, and they can provide a pretty nice return for the portfolio. 90% of my trades are spreads. This section details the spreads I have money in and am watching closely.
Research: Results and/or data of trading research I’m experimenting with. Whether it is a new indicator I’m trying out, a new hedge method, or figuring out the best seasonal for a certain spread, this is where I’ll post my results.
Strategy: A list of proven strategies in trading.
Grain Statistics: A list of government reports and current fundamental data on the grains.
Cash & Basis: A lot can be gleaned by watching prices trends. In the long term, markets are driven by supply and demand. You can get a pretty good idea of demand by watching the cash market. If the cash market takes a dive at certain futures level, you know that a drop in futures may be on the horizon.
Need to Know: Here’s a detailed look at all the patterns and indicators I watch for. If you see that I have posted in the chartbook of a 1-2-3 top in corn but don’t know what it is, go here.
Tools: A list of often visited websites to aid me in my trading decisions.
FX Roundup. Exactly like the chartbook but only with currencies. Currencies, I love to trade them. I don’t make a whole lot trading them…..yet, but they are really fun to trade.
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