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Contributor

Re: Technical Read In Front Of Today's Yield Report

Ray

 

Now you are posting really useful info. I appreciate it. Hopefully others on here will agree.

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Veteran Advisor

Re: Technical Read In Front Of Today's Yield Report

Ray,
Aren’t you short a million bushels? Or did you get out before the report?
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Advisor

Re: Technical Read In Front Of Today's Yield Report

Come on if it had a target from the head and shoulders pattern it would be 4.30. Why is a paper trader even in an ag chat room.
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Senior Contributor

Re: Technical Read In Front Of Today's Yield Report

I am short less than half a million bushels at an average price in the low $3.60s. I did not do anything in corn either before or after today's report as I was busy with the bond market. I was kind of surprised by the action in corn after the report, as there was some big volume trading but at the same prices where we have been stuck for the last 1-2 weeks. It felt after the report like there was some big sellers who finally came to the market, my guess is the farm co-ops finally started to move the crop they anticipate having to move, which is why the market held in place even with big volume coming in. We'll know better in the morning, but I think today was the first time in like two months when we had increases in volume and Open Interest while prices were rising, which supports the short term positive view I have here. If I am correct that the coops have started to off-load, its going to be a slow grind up, as every price will find something reasonable for sale. 

 

I think we will trade a bit higher, and if we do I will sell more as it looks like the market is attempting to complete a bear flag before the bear trend re-asserts. The work I've done since the report tells me we should trade up to the $3.77 to $3.85 area, and I would like to add to my short position there, because if we stop there we'll probably move down to double bottom near the 2017 lows at $3.01. If we don't make it up to the target area, then I will add to my shorts when the up trend line is broken down around $3.40.

 

Its markets like this one, which is not unusual at all in corn, that lead me to spread out the levels where I sell and why I advocate hedging small amounts as prices rise above the initial trigger. By spreading the sales up the ladder, I improve my net sale price, and become progressively more exposed at prices closer to my stop out level.Its a good risk management technique that reduces the loss if I am wrong and maximizes the gains when I am correct. 

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Senior Contributor

Re: Technical Read In Front Of Today's Yield Report

Do you even know how to calculate the target price for a head and shoulders pattern ? Or is $4.30 your breakeven this season ?

 

The market is not short enough to get that kind of upmove, and there's too much supply coming to market within the next two months that will cap prices significantly below $4.30. Remember, December double topped at $4.295, it would take a lot of really bad harvest news to get up there again in that contract. If the market had spent more time getting people trapped in a bear trap down in the $3.30s, then we would have had a chance at such a move, but now I strongly doubt that the December contaact will ever touch $4 again.

 

Maybe if NASA screws up what they're about to do with the super volcano in Yellowstone it might happen, but then again, no one in the Midwest will have any crops to sell if that thing pops its cork.

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Senior Contributor

Re: Technical Read In Front Of Today's Yield Report

Thank you. This was the kind of information I was looking to exchange when I came here until I was dragged into the conversation about hedging. 

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