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marketeye
Veteran Advisor

From the floor August 19

At the close:

The Dec. corn futures closed 12 1/4 cents higher at $7.25 1/4. The Nov. soybean contract settled 7 1/2 cents higher at $13.68 1/2. The Dec. wheat futures ended 22 cents higher at $7.61 1/4. The Dec. soyoil futures ended $0.12 higher at $55.95. The Dec. soymeal futures settled $1.50 per short ton higher at $360.90.

 

In the outside markets, the NYMEX crude oil is $0.22 per barrel higher, the dollar is lower and the Dow Jones Industrials are down 154 points.

 

Mike

--------------

At mid-session:

The Dec. corn futures are trading 13 1/2 cents higher at $7.26 1/2. The Nov. soybean contract is trading 9 1/2 cents higher at $13.70 1/2. The Dec. wheat futures are trading 8 3/4 cents higher at $7.48. The Dec. soyoil futures are trading $0.42 higher at $56.25. The Dec. soymeal futures are trading $2.60 per short ton higher at $362.00.

 

In the outside markets, the NYMEX crude oil is $0.46 per barrel higher, the dollar is lower and the Dow Jones Industrials are down 1 point.

 

One analyst says, "Outside markets have stabilized and weather reports are dryer in the near term and dryer after Tuesday in the longer term."

 

Yet another analyst says, "The grains have been acting great for the last few weeks. "The grains are showing you that we have crop problems, to be able to hold as well as they have with the bloodbaths everywhere else."
With the relative stability in financial markets and ongoing reports of less than great yield potential in Spring Wheat and corn, the markets have remained on an upward price pattern he says.
 "Soybeans want a drink, and there is no soaking rains in the forecast.  So, the market is holding and up a bit, and should close ok today," he says.

 

Mike

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At the open:

The Dec. corn futures opened 7 cents higher at $7.19 1/4. The Nov. soybean contract opened 13 cents higher at $13.74. The Sep. wheat futures opened 9 3/4 cents higher at $7.17 1/4. The Dec. soyoil futures opened $0.30 higher at $56.14. The Dec. soymeal futures opened $2.90 per short ton higher at $355.90.

 

In the outside markets, the NYMEX crude oil is $0.40 per barrel higher, the dollar is lower and the Dow Jones Industrials are up 77 points.

Mike

------

At 8am:

(Update) Early calls: Corn up 2-4 cents, soybeans up 3-4 cents, and wheat up 2-4 cents. As the dollar trimmed losses, the overnight farm markets rebounded.

 

USDA announces Friday that Japan bought 140,000 metric tons of U.S. corn for 2012-13 delivery.

 

Mike

--------

At 6:30am:

Early calls: Corn up 2-4 cents, soybeans up 3-4 cents, and wheat up 2-4 cents. As the dollar trimmed losses, the overnight farm markets rebounded.

 

Trackers:

Overnight grain, soybean markets=Trading lower.

Crude Oil=$2.31 lower.

Dollar=Lower.

Wall Street=Seen trading lower with all kinds of problems with the U.S. and world's financial books. It's now believed the market could be looking for a bottom. And that could take awhile. 

World Markets=Lower. Recession fears are gaining strength.

 

In full disclosure: I bought my first-ever futures or options contract in recent months. I spell out my experience in this story titled What an Option.

 

What's been your experience trading 'options'?

 

More in a minute,

 

Mike

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16 Replies
NCcorntrader
Senior Contributor

Re: From the floor August 19

Mike-

 

Great story on the options trade. I used to trade options on equities with some success, but discovered that ultimately they are best used to hedge other positions. They are often described as an "insurance policy", which I think is accurate.

 

FWIW- the key to being a good trader of any financial instrument is to have patience with your trades and accept the fact that you WILL lose money sometimes. If you cant tolerate relatively large sums of money evaporate before your eyes then trading highly leveraged products is not for you (by "you" I mean anyone, not you personally).

 

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NCcorntrader
Senior Contributor

Re: From the floor August 19

Off subject but holy crap- gold is up nearly $50 today. man is that getting frothy

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marketeye
Veteran Advisor

Re: From the floor August 19

NCcorntrader,

 

It was a fine experience. I would do it again. I think I accomplished what I set out to do. When you have 'skin' in the game, it does teach you that emotions are a big part of trading. Since I don't have any 'physical', I can't experience the feeling from a hedgers point of view. But, even with the little play-like money I was working with, the emotional feelings kicked in.

 

It's interesting you mentioning using 'options' to hedge other positions. That is what a lot of analysts are telling me that farmers should be doing right now to try and capture these higher price-points, and avoid letting them getting away down the road.

 

Thanks and I'm glad you enjoyed it. I just hope my banker doesn't visit this website. 🙂

 

Mike

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jec22
Veteran Advisor

Re: From the floor August 19

Did some research on gold earlier this morning.  These charts are interesting and demoralizing.   Gold says hyperinflation.  If wrong, it has a huge correction coming. 

 

Here is what gold did in 2008's DOW plunge.

 

 

http://www.kitco.com/scripts/hist_charts/monthly_graphs.plx

 

Here is the long term chart.

 

 

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

 

 

 

 

 

 

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NCcorntrader
Senior Contributor

Re: From the floor August 19

I havent put too much thought into it but it seems to me I would be buying Sept12 puts if I was trying to run a farm. If prices keep going up, you basically lose those premiums but you sell your product for even more so who cares? If prices go down you are protected. I think I got that right. Again just off the top of my head.

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NCcorntrader
Senior Contributor

Re: From the floor August 19

jec

 

Gold=Forex=gambling in my view. sure all of the above have legitimate purposes but mostly people are just guessing. At least with grains and softs there is supply/demand involved so you can use some judgment, which is, incidentally why copper doesnt follow gold and silver, it is actually a widely used product.

 

FYI those links didnt work for me

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marketeye
Veteran Advisor

Re: From the floor August 19

You're right, it's skyrocketing. Did you see that Bank of America is letting go 3,500 employees and more to come later?

 

I wonder what the CBOE's VIX will do today? It did drop last week. But, nervousness is running rampant at this point. This brings up this discussion of people cutting back on their purchases, due to less money in their billfolds, higher food and gas prices, etc. Especially around the world. A tighter economy could mean less grain, soybean and meat demand, huh? I've noticed, lately, the exports have been dwindling.

 

Don't get me wrong, it seems these farm markets are well supported by less than ideal crops. And wheat is really building quite the bullish story. And, as the stock market crashes, those investors will need a home for that money. Sure, some will just go to 'cash' investments. But, you have to think the commodities will be the safe haven of choice, maybe?

 

Mike

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jec22
Veteran Advisor

Re: From the floor August 19

Your right on the links not working.  Just click on the side where it says historical charts.  I checked July 2008, Aug 2008 and Dec 2008 and the long term one near the bottom 2000-2011.  You can click them all at once and they appear together on the same page.

 

 

To me the thing to watch is the three C's

 

Copper, crude and corn.

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NCcorntrader
Senior Contributor

Re: From the floor August 19

Yes that is very big news here in Charlotte (where BofA is headquartered)

 

FWIW, I personally am less nervous than I was a week or so ago. As jec pointed out, high inflation is a very real possiblity right now which means EVERYTHING goes up. Plus, all markets have had plenty of opportunity to crater a la 2008, but havent.

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