Please join me for a free grain webinar every Thursday at 3pm Central. We discuss supply, demand, weather, trading ideas and the charts. Sign Up Now
Commentary
As expected, today’s WASDE report from USDA did not offer any major surprises, except for a slightly larger cut than expected to the Argentina soybean crop. But overall, the report in my opinion is to be considered mostly neutral. U.S. soybean ending stocks for 2024/25 are estimated at 380 million bushels, compared to 378 million expected (range 335-405 million) and unchanged from 380 in January. USDA opted to make no US balance sheet changes in this report. The market reaction was choppy with the pre report rally giving way to end of day profit taking with the most actively traded contract, March 25 beans losing 6 cents. Now that the report is behind us, the focus in my view will turn again to South American weather and trade policy. The lack of talks between China and the US remains a dark cloud over the market in my estimation. With South American weather expected to improve over the next 10 days, the odds favor further near-term weakness in my opinion. Should the market fall further, I look for beans to test near term lows at in the low 1030s. Should we see any cancellations by China of previously made bean purchases or an escalation in the tariff war, we could see March beans fall to the 50% retracement from this month’s high just below 1080 from the December lows at 945. Trade idea below
Trade Ideas
Futures-N/A
Options-Buy the March Soybean 1030 put for 4 cents OB.
Risk/Reward.
Futures-N/A
Options-The risk here is 4 cents plus commissions and fees. I would risk using a GTC stop loss at 1 cent, with an objective of 16 cents to exit. So, the risk is approximately 3 cents plus trade costs and fees. This is a 12-day bet until options expire on the 24th of February.
If you would like to receive more information on the commodity markets, please use the link to join our email list Sign Up Now
Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
312 957 8103
888 391 7894 toll free
312 256 0109 fax
Walsh Trading
311 S Wacker Drive Suite 540
Chicago, Il 60606
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices.PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.