MANAGING THESE VOLATILE MARKETS

Written By Sebastian Frost

WEEKLY GRAIN NEWSLETTER

Audio Version

Here are some not so fearless comments for www.dailymarketminute.com

 

We had another kick the can down the road USDA report this week that was full of unrealistic assumptions. Anytime the USDA dishes out garbage or unrealistic assumptions it also serves on a very ice chilled plate buying or re-ownership opportunities.

 

On the USDA report we see some neutral to bearish numbers printed. For corn we did see the yield dropped,but it was still an all time record. Despite the meltdown on the day of the report we managed to leave bullish reversals on the weekly charts. If we can follow up next week with some strength I think the corn market opens the door to plenty of upside in a hurry.  

 

The markets really showed some volatility this week with having made a new low for Dec corn on Thursday, only to leave the weekly bullish key reversal. As we made a new low, we then followed that up Friday by closing above the previous week's high. This move is known as a very bullish indicator. Check out the charts.

It appears that our bounce came from a couple different factors. First off is the fact that the market doesn’t appear to exactly believe the USDA forecast. Next is some of the hot weather that has started to enter the forecasts. Add the fact that we have seen some rumors regarding Chinese buying.

 

Technically the close was very strong and it tells me that I probably don’t want to have many target orders in unless they are near a resistance level. Which are 30-70 cents above Friday’s close. So my preference in terms of grain marketing would be to wait for the market to give me a sell signal in some fashion.

 

Presently I like owning call options, selling puts,bull spreading futures, and or buying futures. When the market gives a signal that it has exhausted the move then I want to be ready to take profits on any long position such as above and I want to make grain sales, sell futures, sell calls, buy puts, and or bear spread futures.

 

To be aggressive in grain marketing it is strongly recommended that one has a hedge account and utilizes it in a manner that helps par risk exposure while increasing profits. Over the years the farmers that have done the best and had the highest prices net for grain have done a couple key things.

 

The first thing that they have done is……

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INCLUDED IN THIS WEEKS EDITION

  • Risk management strategies

  • Key things to achieve the highest price possible

  • When should you sell and what is the market telling you

  • Should you reconsider your marketing plan

  • What is an outside reversal day?

  • Another perspective of corn’s reversal

  • Probability of yield deviation

  • Soybean meal put program from Wright on the Market

  • Does drought hurt all areas?

Sebastian Frost
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WHEAT RALLIES & CORN MAKES KEY REVERSAL