Grain Spreads:Nov21/22 Soybeans

Sean Lusk General Commentary Leave a Comment

Commentary:

New Crop November 21 Beans posted a new high today at 1170. Nice run on this contract since the August lows from 882.6. Old crop beans have received all the attention as both global and domestic ending stocks have dwindled due to mostly adverse weather and insatiable demand. March beans traded to a 1388 this AM, another new high, as weather worries, farmer strikes in Argentina and inflationary tone in the grain sector have encouraged a buy the dips mentality. However nothing in the market goes up or down forever and in my view if the weather doesn’t change for the better soon down in SA, we may not see a sizable sell-off until  after July 4th in the grains.  I included a spread chart for the Nov 21 beans vs Nov 22 beans. This spread has rallied from 4 cents Nov 21 over to 1.12 Nov 21 over. Retracement levels are seen in the chart. I would suggest one wait until after tomorrows crop report prior to entering in the market. However if one is going to plant beans this year, I would pay attention to this spread and consider it a vehicle for a percentage hedge. In my view if a correction were to occur, the spread could lose 33 cents and trade down to the gap at 74 cents Nov 21 over, or down to the 50 percent retracement at 58 cents. Again my opinion here but I would wait for tomorrows 11 am crop report. The USDA could throw a curve ball against expectations that could just as easy have this spread posting new highs.

Nov 21/22 soybean spread

Trade Recs

Futures-N/A

Options-N/A

Risk/Reward

Futures-N/A

Options-N/A

Please join me for a free grain and livestock webinar every Thursday at 3pm Central. Sign up is free and a recording link will be sent upon signup. We discuss supply, demand, weather, and the charts. Sign Up Now

Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member. ​

Futures and options trading involve 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.

Leave a Reply

Your email address will not be published. Required fields are marked *