Futures and futures options trading involve substantial risk, and therefore are not suitable for all investors.
Expectations for the USDA S/D report due out Tuesday, November 9, @ 7:30am CDT:
(Courtesy: Informa Economics)
Click to enlarge ..
Futures and futures options trading involve substantial risk, and therefore are not suitable for all investors.
I'm posting a few charts for perspective. These charts show a high-correlation chart in the CBOT Wheat futures, and the same for Cotton futures.
Give me a call or leave me a post to tell me what you think about these.
Futures and futures options trading involve substantial risk, and therefore are not suitable for all investors.
The action on the grain and oilseed futures has been rather intense lately, no?? Corn has recovered some after the steep losses last week, in part due to a suspicion that the corn stocks numbers for the Sep. 1 inventory may not have been accurate.
A disciplined approach to your marketing program or trading system is always important, but it becomes even more important when volatility and uncertainty really increase. Please feel free to talk to us whenever you would like to discuss a market and how to best position yourself based on your opinion of the market's direction.
For the grains & oilseeds, we have a report due out this Friday from the USDA. The expectation for the October Crop Production report are as follows:
(Courtesy Informa Economics)
Click to Enlarge
Tomorrow, in addition to the typical weekly export sales report, the USDA will be issuing the Sep. 1 Grain Stocks numbers and the Small Grains Report.
Here are the estimates for the reports (Source: MF Global Research):
While we see an expected increase for the Sep. 1 corn stocks, I think it important to keep it in perspective. An implication for the expected production for the crop being harvested right now is that the ending stocks number for the '10/'11 ending stocks number could be the lowest since 2004, and the stocks/usage ratio the lowest since 1996.
So, in my opinion, if the report does not bring a number at the upper end of expectations (1,489?), we may continue to find the corn market supported at these lofty levels.
The fundamental backdrop to the cattle and beef market has been bullish of late, and I thought I'd lend an image or two to add perspective to the rallies that we've experienced in Live Cattle and Feeder Cattle futures.
"Where do we go from here?" is a top question for anyone involved in a market that has produced parabolic moves on either the upside or the downside. I like to use, as a subset of tools, correlation charts and historical tendencies to help form an opinion to answer that question.
Check these out ...
Courtesy MRCI
December Live Cattle Futures Historical Tendency
The first two images pertain to feeder cattle, one of the cash market in Ok City, and the next of the October Feeder Cattle futures market. Both indicate the potential for continued upside to the levels indicated on the chart.
The last chart is of the December Live Cattle futures. It shows how these futures have done over various time frames for the past 45 years. As you see, this time frame, too, indicates potential for continued upside.
Feel free to blog or contact me to discuss, Bob
As of this writing the cash cattle markets hadn't traded on the day in the TX/OK/NM region. The LCJ0 is posting a a 22 point gain. Feeder Cattle are fairing pretty well yet again with the FCJ0 @ +57.
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The USDA Livestock, Dairy, & Poultry Outlook led with the comment "Continued Contraction in Cow Herd Implies Decreased Production Beyond 2010."
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As I write this we are moments from the close of the LC and FC regular trading hours, and it surely seems that we are going to post yet another solid day for beef livestock markets - at least without much of a sell-off. The Daily Direct Regional report from the USDA is showing thru the afternoon report that negotiated deals are still at a standstill. We'll see if there's some late-day trade that occurs, perhaps up towards 90.50 to 91.00 like many expect.
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