Grain markets have traded range bound the last few sessions as intra-day or overnight rallies find willing sellers as buying dissipates. The same can be said when we have tested support as in meal, beans, wheat, and corn. With a Chinese delegation in Washington this week, it seems that shorts aren’t that comfortable getting caught in front of a potential major announcement on trade. Following any announcement tomorrow or over the weekend, the next big event could be will be our first crop report of 201. this could be significant as we get a fresh look on how the USDA sees demand while we get final numbers on corn and beans, and wheat seedings.
Soymeal is at a key juncture here and would need to hold in my opinion, or we could see a 15 handle break to 295 in the weeks to come. Beans are also suspect here with today’s close just below a key trendline and channel. Lets see if we can hold together into tomorrows close and see if March beans can hold 916.2 into the close. Corn also in my view, succumbed to some profit taking as some longs threw in the towel. Being month end today and with trade talks an unknown, we saw a few sectors including energy, livestock, and metals do an intra day reverse course and head lower. Grains were no different as the opening rally stalled , profit taking ensued and finished in the red. Look at Chicago wheat vs. KC and corn. Strong buying into the close.
Those looking for a trade may consider the following in meal. Buy the April meal 300 put for 2.50, and at the same time buy the April 330 call for 2.40. Strangle cost 490 plus commissions and fees. May futures sit at 314. Its time for a move here in my view as trade and gov’t reports may finally knock this market out of its narrow wedge or sideways formation. Call or email me with questions. 888 391 7894 or [email protected]
Please join us tomorrow for a free grain and livestock webinar at 2:30 pm Central. We discuss supply, demand, weather, charts, spec and hedge ideas.
