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Grains

WHEAT in leg v of a bearish turn - Elliott waveWHEAT is trading in a five-wave decline for a higher degree wave 1 or A from 831 high. We also see that price broke below the lower corrective parallel channel line, which is a confirmation that a temporary high is in place, and a change in trend underway. At the moment we are tracking a sub-wave v of 1/A, down from 795 lvl., where a corrective sub-wave iv had ended (fib. ratio of 0.382 and 0.50 reacted as resistance). Sub-wave v can reach area near the 776/771 lvls., before an a-b-c move for a bigger 2/B correction may follow.
CBOT:ZWH2022
by Gravity33
WHEAT turning bearish for a lesser five-wave move - Elliott waveWHEAT (Mar 2022) is trading as expected, turning in impulsive fashion down from 831 high of a former higher degree wave C. We labelled a five-wave move in progress for a higher degree wave 1 or A; sub-wave iv correction can now be underway, with possible resistance at the Fib. ratio of 0.382 or 0.50. Also the upper side of the lower parallel corrective channel line can react as resistance, and the former swing high of a wave b (796'2 lvl.). A sharp break below the 782 lvl. would suggest a completed minor correction and sub-wave v underway. An impulsive fall, followed by a break bellow the lower corrective parallel channel line indicates a bearsih turn on the intra-day chart of wheat.
CBOT:ZWH2022
by Gravity33
Wheat Taking The Bullish Move - Elliott waveWHEAT (Mar 2022) found a low for a corrective wave B at the 776 level, near the Fib. ratios of 0.382 and 0.5, which can also react as support, and bounced sharply higher. A sharp rally above the upper parallel channel line, and above the former high at 803 lvl. is an indication that bulls are in control, and that correction is completed. We are now tracking a five-wave rally, a new impulse labelled as wave C, which can target the upper parallel channel line, connected from the high of A. 825/835 area can be seen, and can be achieved in a five-wave fashion as previous wave A.
CBOT:ZWH2022
by Gravity33
Soybeans: Close to a buy signal once again...The last time we had a perfect storm situation to buy grains, we had a monster rally in both corn and beans. We are now in a similar situation, with the recent surge in Nat Gas affecting fertilizer prices. Weather in Brazil is problematic and China is struggling to produce grains locally...We are once again nearing a situation where reward to risk for buying into grains is tremendous. I'm long Corn futures already for a couple days and waiting for the daily chart to trigger a technical buy signal in Nov Beans to go long as well. The last weekly signal expires by next week, as a failure, price hit really oversold levels and reached monthly support (see green shaded area). Implications are a retest of the weekly down trend mode (as shown by the arrow on chart), at least, which can then evolve into a new weekly uptrend, once the daily trend turns up. And potentially trigger a new monthly signal similar to the one we had before...This is an interesting juncture to enter long term positions in grain futures. Cheers, Ivan Labrie.
CBOT:ZS1!Long
by IvanLabrie
1
Wheat Futures Attempted a Breakout Last Week.Long term trend still intact. Trend continuation expected. I've been expecting a breakout from this wedge pattern for a couple weeks. Last week, the breakout did happen, but price returned to close the week back inside the wedge. I still hold that the technical pattern is extremely bullish. Fundamentals for wheat are also bullish with rising fertilizer and energy costs. One way to gain exposure to wheat futures is through the Teucrium Wheat Fund, ticker WEAT. This fund is not suitable for intraday or even shorter term swing trading due to low liquidity and large spreads. Over the long term however, the fund tracks the wheat market very well.
CBOT:ZW1!Long
by iamroot
1
Processing Spreads Provide Fundamental CluesSome futures markets offer contracts that are related to others and are processed products of the commodity. Understanding the price relationships, history, and paths of least resistance of the processed product versus the original input can provide valuable insight into supply and demand fundamentals. Moreover, these relationships shed light on other related assets. Market structures are the pieces of a jigsaw puzzle Processing spreads are real-time supply and demand barometers The soybean crush spread Gasoline and distillate crack spreads Monitoring corporate profits There is so much data at our fingertips, but we need to understand how to use and interpret the information. Processing spreads are invaluable tools as they are critical variables for market calculus when forecasting the path of least resistance of prices. The crude oil and soybean futures markets offer liquid futures contracts in products that can reveal significant trends, warning signs, and calls to action. Anyone who undertakes a home improvement project knows that the job will not go well without the correct tools. Trying to hammer in a nail with a screwdriver is far from optimal. Tightening a bolt with an ax is a disaster. The best tool leads to the optimal result. The processing spread is one of the most critical tools in my investment and trading toolbox. Market structure are the pieces of a jigsaw puzzle In the world of commodities, market structure are integral pieces of a puzzle. When put together, they provide clues about the path of least resistance of prices as they reflect and can be real-time indicators of supply and demand fundamentals. A commodity’s market structure includes: Term structure- Price differentials for nearby versus deferred delivery periods. Location differentials- Price differentials for delivery of a raw material in different regions. Quality differentials- Price differentials for differing grades, sizes, or composition of the same commodity. Substitution spreads- The price comparison of one commodity for another that can serve as a substitute. Processing spreads- The margin or differential for refining or transforming one commodity into its products. Together, the various pieces that comprise a market’s structure create a picture that often points to higher or lower price paths. Processing spreads are real-time supply and demand barometers The processing spread is one of the valuable tools in an analysts’ toolbox. It tells us if demand for the products is rising or falling. Consumers often require the processed product instead of the raw commodity. The differential between prices of the input, the commodity, and the output, the product, is a critical fundamental measure. Narrowing processing spreads signal falling demand while widening spreads are a sign that supplies are not keeping pace with requirements. Since futures contracts prices are constantly changing, processing spreads can be volatile. When the commodity and product trade in the futures market, the differentials provide a unique supply and demand perspective for traders and investors. There can be many reasons for price variance in processing spreads. However, comparing them to historical levels can serve as real-time indicators of fundamental forces that determine the underlying commodity’s price direction when exogenous factors are not impacting the overall refining or treatment process. Many commodities do not offer futures contracts in the products. The soybean and crude oil markets are exceptions. The soybean crush spread Soybean futures trade on the CME’s CBOT division. Soybean products, soybean meal, and soybean oil also trade in the futures markets on the CBOT with separate and independent futures contracts. Soybean meal is a critical ingredient in animal feed, while soybean oil is cooking oil. Both have other uses. Processors crush raw soybeans into the two products; the oil is the liquid from the crushing process, while the meal is the solid substance. The soybean crush spread can be highly volatile. The monthly chart shows the soybean crush spread over the past fifteen years. The spread traded to a low of a quarter of one cent to as high as $2.1950. The low was in 2013 when soybean futures were trending lower from the all-time high in 2012 at $17.9475 per bushel. The high was in October 2014 when soybean futures were consolidating at lower levels. The move to the high was because consumers bought soybean products at lower prices around the $10 per bushel level. More recently, the crush spread signaled that soybean futures had run out of downside steam. After trading to a high of $16.7725 per bushel in May 2021, the oilseed futures fell below $12 in October. When soybeans were on the high in May, the crush fell to a low of 52.75 cents. At high soybean prices, consumers backed off buying the oilseed products, leading to a price correction that took the price below the $12 per bushel level in October. Meanwhile, falling prices caused demand for products to return. The crush spreads traded to the most recent high at $1.9050 during the week of October 18. The rising crush spread was a sign of robust demand that lifted the raw soybean futures from the recent low. The November soybean futures chart shows the rise from a low of $11.8450 to the $12.50 level. The price action in the crush spread was a signal that demand for products would lift the soybean futures price. The processing spread action signaled the price bottom over the past weeks. Gasoline and distillate crack spreads Crude oil refiners process the raw energy commodity that powers the world into products, gasoline, and distillates. The NYMEX futures market trades contracts in crude oil, gasoline, and heating oil. Heating oil is a distillate fuel that is a proxy for other distillates, including jet and diesel fuels. Refineries process crude oil into the oil products by heating them to different temperatures in a catalytic cracker. The price differential between the input, crude oil, and the output, the products, are “crack spreads.” Rising crack spreads point to increasing demand for oil products. When they fall, it is a sign of oversupply or weak demand. Crude oil futures reached lows in April 2020 during the height of the global pandemic’s impact on markets across all asset classes. The NYMEX crude oil futures weekly chart highlights the bullish trend since April 2020 as the energy commodity has made higher lows and higher highs. The weekly chart of the gasoline crack spreads highlights the bullish trend since March 2020. Gasoline is a seasonal commodity that tends to reach highs during the spring and summer months and decline during the winter as drivers tend to put more mileage on their cars during the warm months. However, at the $17.63 per barrel level at the end of last week, the gasoline crack spread was appreciable higher than the peak in October 2020, when it reached $11.62 per barrel. The gasoline crack spread has provided bullish validation for the path of least resistance of crude oil’s price. The weekly heating oil or distillate crack spread chart also displays a bullish trend. Distillates tend to be less seasonal than gasoline as jet and diesel requirements are year-round. At the $22.53 per barrel level at the end of last week, the heating oil crack was far higher than its October 2020 peak at $9.96 per barrel. The crack spreads have supported the rising crude oil price as they point to robust product demand. Monitoring corporate profits While processing spreads can provide insight into the path of least resistance of prices for commodities that are inputs, they are also real-time earnings indicators for companies that refine or process the raw commodities into the products. Refiners or processors tend to buy the input at market prices and sell products at market prices. The refiners and processors make significant capital investments in refineries or other processing equipment. They make or lose money on the processing spread. When they widen, they experience a profit bonanza; when they fall, times can get rough. When the spreads rise above the cost of the process, profits rise. Low processing spread levels can lead to losses. Valero (VLO) is a company that refines crude oil into oil products. The chart shows that the high in October 2020 was at $44.88 per share. In October 2021, VLO was over the $80 level at the end of last week. Rising crack spreads have lifted profits for the oil refiner. Archer Daniel Midland (ADM) and Bunge Ltd. (BG) are leading agricultural processors. Soybean processing is one of the many business lines for the two companies. The rising soybean crush spreads have lifted profits for the companies. In October 2020, ADM shares reached a high of $52.05 per share. At the end of last week, the stock was at the $66.22 level. BG shares reached a high of $60.50 in October 2020 and were trading at the $88.33 level at the end of last week. The rise soybean crush spreads at least partially supported rising profits and higher share prices for ADM and BG. Processing spreads are real-time indicators for the demand of the commodities that are the inputs. They are also real-time earnings barometers for companies that process commodities into products. Any tool that improves your ability to analyze markets is worth keeping in that toolbelt. --- The full article and spread charts are available using the link below. You can also sign up for the Monday Night Strategy Call below. Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
NYSE:VLOEducation
by Andy_Hecht
3
So, what’s wrong with Kernel?Landscape in the agricultural sector could not be much more favourable for Kernel than it is nowadays. Grains Price Index is at its highest level since 2013 and the company has managed to fix most of its sale prices for the 2021/2022 season. According to the U.S. Department of Agriculture, global grain yields in 2021 will be remarkably high mostly thanks to the very impressive yields in Argentina and Ukraine. The other major producers like the United States, Brazil, Canada, and China faced unfavourable weather conditions in 2021. China is especially relevant in the context of Kernel as its agricultural products import increased in the first two quarters of 2021 by 34% y/y. Moreover, the key agricultural region of China, Henan province, experienced severe floods that are likely to facilitate the upward trend in the grains import. Let’s be more specific. Rather conservative DCF and comparables suggest a valuation of around 78PLN per share. Quite optimistic given the current 57. So, what’s wrong with Kernel? The positive indicators I described have been widely known for quite some time however the share price does not display an upward trend. The late July price jump was caused by the buyback announcement. What is the market afraid of? One thing that comes to my mind is July’s Ukrainian tax authorities tax compliance check. Given the position of Kernel’s owner Andriy Verevskyi, I don’t believe that the firm can get busted on taxes. (Kernel is a huge VAT recipient*; more about Ukrainian oligarchs' power**). Donbas war could be considered another “risk factor” however, based on the media reports, the conflict smoulders rather than burns. Lastly, at the beginning of July Kernel announced the amendment of the expense plan regarding the new oilseed processing plant. Additional costs usually do not make shareholders particularly content although given the record yields this year, plant expansion seems to be justified. Summing up, my valuation suggests that the business is undervalued and I can’t think of risks strong enough to justify current capitalization. Thus, I am optimistic. *latifundist.com/en/novosti/56563-nazvany-krupnejshie-poluchateli-vozmeshcheniya-nds-v-agrosektore-za-avgust-2021-g **chathamhouse.org/2021/07/ukraines-system-crony-capitalism/05-agriculture-counterexample
GPW:KERLong
by UnknownUnicorn27189777
1
Seasonality In Commodities As The Summer of 2021 EndsAs September began last week, the markets are nervous. Stocks have seen some pretty awful seasonal price action in September and October. Crashes occurred in 1929, 1987, and 2008 in October. Commodities are highly seasonal markets. Some commodities typically reach seasonal highs and lows during various months of the year. Futures prices ordinarily reflect seasonal factors. Seasonality is a historical pattern, but 2021 is anything but a typical year Grains enter the harvest season The grilling season for meats ends Natural gas and heating oil enter the peak season while gasoline moves towards a seasonal lull Expect the unexpected as 2021 as seasonality takes a back seat in markets across all asset classes Meanwhile, as we move into the fall season in 2021, the impact of the worldwide pandemic continues to grip markets. Moreover, markets reflect political and economic landscapes. Seasonality could take a backseat to political changes in 2021 that are impacting the global economy. The natural gas and heating oil futures markets will move into their peak demand seasons over the coming months as winter approaches. The 2021 harvest will impact grain, oilseed, and other agricultural markets over the coming weeks. The Labor Day holiday marked the end of the 2021 grilling season, the peak time of the year for animal protein demand. Seasonality can be a powerful force for prices, but in 2021, they’re much more going on that may change expectations and the path of least resistance for seasonal markets. At Bubba Trading, we follow trends. The futures markets adjust to seasonal factors in advance as they reflect prices in the future. Seasonality is a historical pattern, but 2021 is anything but a typical year Seasonality is logical in raw materials markets, but the fall season has been the time of the year for some of the nasty crashes in the stock market. The October 1929 stock market implosion occurred on Black Tuesday, October 29. It began in September and ended in late October when the New York Stock Exchange collapsed. The Great Depressions began following the 1929 crash and continued through the 1930s. While the stock market correcting in 1987 looks like a blip on the chart, the S&P 500 fell from opening in October at 321.83 to a low of 216.46 or 32.7% in only one month. In 2008, the global financial crisis caused the S&P 500 to suffer its most significant downdrafts from September through October. As we head into the fall season, investors and traders will be highly sensitive to historical weakness in September and October and the stock market’s penchant for imploding at this time of the year. In the world of commodities, seasonality is closely tied to weather conditions. Grains enter the harvest season While grain and oilseed prices have corrected lower since the 2021 highs, the futures are entering the 2021 harvest season at substantially higher prices at the same time in 2020. As the monthly chart highlights, nearby corn futures opened in September 2020 at $3.4775 compared to the $5.34 opening price on September 1, 2021. Whole corn futures declined from the over eight-year high in May 2021 at $7.75 per bushel; they opened September at 53.6% above the previous year’s price. The monthly CBOT wheat futures chart shows the grain that is the primary ingredient in bread opened at $5.4250 in September 2020 compared to an opening price of $7.0825 on September 1, 2021. Wheat traded to an eight-year high at nearly $7.75 per bushel in August. After correcting, the price was still 30.6% higher in September 2021 than the previous year. The monthly soybean futures chart shows the oilseed futures opened at $9.48 in early September 2020 compared to $12.9150 at the same time in 2021. This year, soybean futures are 36.2% higher than last year. The weather conditions, rising inflation pushing production costs higher, supply chain issues, and other factors have created a significant bull market in the grain and oilseed futures markets. We could see more corrective action with the 2021 crop harvest over the coming weeks, but the cost of feeding the world has risen substantially from September 2020 to September 2021. While the weather in the US and the northern hemisphere had been the primary factor for grain and oilseed prices over the past months, the futures market’s attention will shift to weather in the southern hemisphere over the late fall and winter months in the US. The grilling season for meats ends The peak season for demand in the animal protein arena ended last weekend. It begins in late May on the Memorial Day holiday weekend and ends with the Labor Day holiday, marking the end of the summer. Grills tend to work overtime during the summer months and go back into storage sheds as the fall and winter are not ideal times for gatherings. Typically, cattle and hog futures rally into the summer season and reach seasonal lows during the early fall. The monthly chart shows that live cattle futures reached significant lows in October 2016 and September 2019 as seasonal demand weakness for beef weighed on prices. The April 2020 low was an outlier as the pandemic distorted cattle prices because of shutdowns at processing plants and supply chain bottlenecks. As the offseason for demand gets underway in the cattle arena, the market is experiencing an unseasonal bullish trend. The monthly feeder cattle chart shows a similar pattern of weakness going into the fall and strength as the peak demand season approaches. Feeders are going into the offseason in a bullish trend with four consecutive months of gains. Hog futures highlight a similar pattern to the beef market over the past years. The demand for ribs, sausages, and other pork products peaks during the summer months and declines after barbecues goes back into storage after Labor Day. Meanwhile, hog futures have corrected since June, but outbreaks of African Swine Fever in China, the world’s leading pork consumer, is underpinning prices. Meat prices are higher at the beginning of September 2021 than at the same time in 2020. On the continuous futures contracts: Live cattle opened on September 1, 2021, 20.5% higher than at the same time in 2020 Feeder cattle were 15.9% higher over the same period. Lean hog futures were 65.5% higher from September 1, 2020, to September 1, 2021. Meat and agricultural product prices that are highly susceptible to seasonal factors are heading into the fall season in 2021 at levels that are appreciably higher than last year at the same time. Natural gas and heating oil enter the peak season while gasoline moves towards a seasonal lull Energy prices are much higher at the beginning of September 2021 compared to the previous year. The end of summer marks the finish of the peak driving season in the US when drivers consume more gasoline and put peak mileage on their vehicles. The chart shows that gasoline prices were 74.7% higher on a year-on-year basis on September 1, 2021. While the fuel’s price is likely to drift lower for seasonal reasons, the technical price action is bullish. Natural gas is heading for the peak winter heating season, but the price has done nothing but make higher lows and higher highs since June 2020, when it reached a quarter of a century low at $1.432 per MMBtu. The chart shows that natural gas futures have a substantial head start on seasonal strength as they were 67.5% higher on the opening on September 1, 2021, than the prior year. Heating oil futures, a proxy for all distillate fuels, are seasonal but less so than gasoline as diesel and jet fuels are year-round energy commodities. As of the opening on September 1, 2021, NYMEX heating oil futures were 74.3% higher in 2021 than in early September 2020. The shift in US energy policy that weighs on production at a time when the demand is booming has boosted the prices of energy commodities on a year-on-year basis. Rising inflationary pressures have only exacerbated the price appreciation. Expect the unexpected as 2021 as seasonality takes a back seat in markets across all asset classes The US dollar is the pricing benchmark for all commodities as it is the world’s reserve currency. The dollar index measures the US currency against other reserve foreign exchange instruments. A stronger dollar tends to be bearish for commodity prices, while a falling dollar has the opposite impact. The dollar index opened at the 92.17 level in September 2020 compared to 92.67 on September 1, 2021. The marginally stronger dollar has not weighed on the seasonal or unseasonal commodity prices, which have been in bullish trends over the past year. Expect the unexpected over the coming weeks, and months and you will not be disappointed. Rising inflationary pressures, supply chain disruptions, policy shifts in the energy arena, and other factors are putting seasonality in the backseat of the commodities market over the past year. Meanwhile, those raw material markets that tend to rally during the fall and winter months could carry the bullish baton even more aggressively if the current conditions continue. Seasonality is a critical factor for commodity markets, but 2021 is anything but an ordinary year. --- Use the link below to sign up for early access to articles and more. Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading. Any investment involves substantial risks, including, but not limited to, pricing volatility, inadequate liquidity, and the potential complete loss of principal. This article does not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
SP:SPX
by Andy_Hecht
2
The inflation trade is not dead! It has just started.The inflation trade is not over. People's lives, in particular in the US, are about to deteriorate significantly. Or rather improve, with food getting more expensive and people forced to live more simple lives, more in touch with nature. The official measures and consensus will say deteriorate. Traders positions have bottomed in the strict sense, with the price "bottoming" but not really as the price bounced. If you look at the charts there was a similar price pattern recently You might say the price hasn't already taken into account the wage costs and workers not going to work because they get welfare. Or you might say maybe it has. At the same time maybe farmers are getting undeclared workers with all the migrants? Either way you know what? The majority of institutions and their economists have an irrational bias in favor of the government and I don't think they are fully pricing what they should be pricing. And since the dramatic events in Afghanistan that irrational bias in favor of has been hit very hard, so maybe now they can stop being emotional and start actually pricing things more correctly. Plus on top of that if the issue of minimum wage has not fully impacted the price well it will add additional fuel to the rocket ship. The US has reduced its oil output but recently it has begged the OPEP+ to increase their production and keep prices low. Maybe it will beg the farmers soon? There are a lot of farmers on below living wage here in west Europe especially France where the state says no no to scaling up "we want only small family businesses" but yes yes to cheap imports from huge industrial complexes in Romania. The price of Soybeans is close to ATH, but nowhere near inflation adjusted ATH. Maybe our local farmers will be able to have decent profits (the average is 14,000 a year I think, not even minimum wage, and not counting debts, and it's not a 9 to 5 job obviously there are no weekends), I will be glad if the price goes up. Not sure about how much they make they might be lobbying I don't know. And stdev is big of course. Volume is also at its lowest, was, until this week. The inflation trade has been forgotten, the herd has been reassured by the FED. No one is paying attention. This is the typical bear market bottom. Maximum opportunity. The herd (pros) will join when there is a breakout and certainty in the move and it's almost over (or not who knows). The herd of retail will never buy because they don't trade this so don't expect a bubble like sugar in the 70s, but who knows... The price of the lumber christmas tree has fully retraced! Maybe people that were holding off their house purchases are going to buy now. One the info reaches them I guess... The liars can continue their nonsense reassuring speeches, and gullible fools will eat it up, but factually the printing is way more important now than it was before. Before M1 went up 50% in 7 years, about 5% a year, and that was already a bit crazy and alarmed the perma bears such as Peter Schiff, it even alarmed bankers and bureaucrats writting reports for the government. But now it's going up 20% in just 1 year! Not counting the big covid increase here, I'm just measuring the small line at an angle of 37° shown here: The promises are wind carrying waves. The chart is where the real info is. It has been going up faster and faster for 20 years. It will continue until it goes vertical and collapses like the bubbling pyramid scheme it is. Peter Schiff called it! Their only way to get out of this mess is to print EVEN MOAR. Until it all blows up. Insanity is doing the same thing over and over again and expecting a different result.
CBOT:ZS1!Long
by MrRenev
Grains will shock youWith all the drama of last year and many areas locked down, one of the big sufferers was agriculture. Much of last years yields went to waste and panic buying occured. Which I'd guess also went to waste for the most part. As you can see on my chart I'm expecting a sizeable pullback in price before the event, which is completely normal. let it collect the orders down there and get in where you feel comfortable. From there hold way into 2022. I wouldn't like to call the top on this, but it'll be impressive. Checkout soybean and corn also. Why do you think they drove up so hard in price? Happy trading and don't long just yet. (July?).
CBOT:ZW2!Long
by UnknownUnicorn1040545
This is just the beginningCommodity prices are still going, several commodities have gone past all time highs, such as Palladium, Lumber, Steel... And grains are also going up very strongly, Corn hit an 8 year high after 6 years of price stability, and they're all not far from ATH. Corn imports have fallen as buyers are put off by the high prices (they are going against the trend, what if it never goes back down?). Soybean demand should continue to increase, it is in high demand for the green transition (as a meat replacement, fuel additive or replacement, lubricant, etc). And based on past years it seems farmers do not sell before summer (they plant in April-May). This is now the 12th month in a row food prices have been going up. History will show this was more than just some short term fluctuation or some economic recovery. If we look at the past 10 years we might expect that soybean volatility is set to soar, every year as farmers plant their crops volatility increases by about 50%. It fits with what you would expect after a range breakout, a trend that gets stronger and stronger ending parabolic (and bears screaming "this is ridiculous"), followed by a significant correction. Corn has been the big runner and I think I will avoid it now, but wheat is interesting, after a long period of being choppy and lagging behind other grains, it has gone vertical finally! If this keeps going I will look to go long wheat on a pullback. Resistance (ATH) is far away: The price stopped at the $15 psychological level, gathered reinforcements, and then continued up. In many ways the situation is similar to 2007, but much crazier, with Rudolf Havenstein running the central bank. We have seen this several times in the last year: After hesitating a bit around resistance, the price makes a new high giving confirmation to sidelines traders. No reason to think this time is different, and as more people notice the trend it can be expected to get stronger. We can look at previous vertical price rallies, and expect it to go at least to $18. It does not make sense to me that the rally would stop now. It would be like a big truck running at full speed instantly stopping for no reason. On the weekly chart clearly it does not have that much distance left to get to all time high, it's not far fetched at all, especially with all the other commodities that went well beyond ATH. The trick is getting in on H4 to grab a fantastic risk to reward. The main difficulty with these crazy vertical price moves is you can never enter and once you get in it reverse. But with Soybeans... It is granting perfect pullbacks and breakouts, at least it has for the past 9 months. And cherry on the cake, it could just fly past ATH, again. Who knows how far it can go? If this was the winter low volatility, what could the year peak volatility be? Up 25% in a week? Hey it's even possible it ends up in the news and retail goes insane and starts a bubble with dumb money arguments "new paradigm", "market of 7 billion eaters with the green transition", "we are very early" and so on. The past centuries were full of all sorts of commodity bubbles, tulips that's the one everyone knows about, rabbits, silk, and others ones no one knows about but still have a few traces left in old books.
CBOT:ZS1!Long
by MrRenev
3
So here we are... Trend continues. Palladium ATH today!Bulls exhausted the bears finally. I got kicked out of soybeans and missed buying corn at the bottom of the triangle by little, I was too slow to decide and to look into it I think. Commodities are going up. Gold not so much, investors are not interested. But metals used in the real world, prices are all going up. Today Palladium marked a new all time high. Copper is 38 cents away from its ath, it retraced more than 90% only 6-7 to go. Hard commodities like lumber got a lot of attention but while no one was watching food it kept going up. And we got used to plentyful food, no one can imagine the west struggling to buy it, Corn & Soybeans are not far from ath. China did an outstanding move by developing their financial markets (and conquering Hong Kong for its financial center - I'm just looking at the economics not here to argue about ethics & politics), to allow them starting to distance themselves from CME/American prices. One has to admit regardless of what "side" they're on, that sometimes, when the leaders are intelligent, the planned economy can do something right. Makes no sense to have irrational biases. If I offend someone well nothing I can do, just post silly indicators that no one made money from? Complete waste of time. Less influence from the American economy in general, american commodity market prices, american fundamentals, american currency. China got away from the building just before it collapses, just like in action movies where the fuse has 2 seconds left. I really wish I didn't miss. I think I want to stay away from Corn as it has been the leader but I think Soybeans will be the next one. Now all I have to do is wait for a pullback, around 1525 preferably. I knew an explosion was imminent, but can't predict exactly when nor the random volatility. This happens really often to me, being so right but missing out, I wish I had the ability to just buy a call for these. Already rich people get that option, not me.
CBOT:ZC1!Long
by MrRenev
1
New Highs in Corn Corn probes above $6 for the first time since 2013 Farmers will favor beans Keep an eye on gasoline and ethanol prices Corn continues to pop going into the planting and growing seasons- It’s all about the weather Backwardation as the market has high hopes for 2021 output In late April 2020, the corn price fell to its lowest level since 2008 when the continuous corn futures contract found a bottom at $3.0025 per bushel. The pandemic pushed prices lower across all asset classes. Corn is the primary ingredient in US ethanol production. The ethanol mandate that requires a blend of gasoline and biofuel in the US closely ties corn’s price to crude oil and gasoline. In April 2020, crude oil fell below zero to a low of negative $40.32 per barrel. Gasoline prices declined to 37.60 cents per gallon wholesale in March 2020, the lowest price since 1999. The price carnage in the energy sector and selling in all markets pushed corn to the $3 level where it found a bottom. Last week, corn moved to its highest price since July 2013 at nearly double the April 2020 low. Nearby May futures probed above the $6 per bushel level. Corn probes above $6 for the first time since 2013 On April 15, corn futures put in the most recent high when they traded to $6.015 per bushel on the nearby March futures contract. The chart highlights eight consecutive months of gains in the corn market as of mid-April 2021. A close above the $5.6425 level at the end of April will mark the ninth straight monthly price increase in the coarse grain. Open interest, the total number of long and short positions in the corn futures arena has been rising with the grain’s price. Increasing open interest as the price of a futures market rises is typically a validation of a bullish trend. Monthly price momentum and relative strength indicators are in overbought conditions, but they continue to rise. Monthly historical volatility at 22.31% signifies the rally is slow and steady. Corn futures are bullish, with the price at its highest level since July 2013. The next upside target is $7.30 per bushel, that month’s peak, which is a gateway to the 2012 $8.4375 all-time high in the corn futures market. Keep an eye on gasoline and ethanol prices The US ethanol mandate ties corn’s price to gasoline. The US is the world’s leading corn producer and exporter. Corn is the input into US ethanol processing. In Brazil, sugar is the input. Like corn, sugar prices have been rallying over the past months as the demand for ethanol rises with gasoline prices. The chart shows that gasoline futures rose from the lowest price of this century at 37.6 cents per gallon in March 2020 to the highest level since 2018 at $2.17 per gallon in March 2021. Higher gasoline prices have pushed ethanol to a multi-year peak. The monthly ethanol futures chart illustrates that the biofuel’s cost has risen to its highest level since December 2014 at $2.01 per gallon. Higher ethanol prices support higher corn prices. Continue reading the full article using the link below. Trading advice given in this communication, if any, is based on information taken from trades and statistical services and other sources that we believe are reliable. The author does not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects the author’s good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice the author provides will result in profitable trades. There is risk of loss in all futures and options trading.
CBOT:ZC1!Long
by Andy_Hecht
Inflation trade: Bulls leading battle of attrition on bearsThis is the type of inflation that the masses ignore, that happens while they cheer at Chavez stimulus checks. Look at images of Venezuela 15 years ago, so many smiles, so happy crowds. While Germans were carrying buckets of cash and starving actually farmers were doing pretty well, they profited greatly. Probably for similar reasons the clueless revolutionaries in Russia called them "bloodsuckers". How outrageous they profit while others suffer oh no! All is their fault, not the people actually responsible. But what the cheering average people worrying about their day to day lives don't see is the worst type of inflation: basic goods prices go up, production goes down. Hurray, everyone gets more "money", everyone gets more pointless pieces of paper, great, I will finally be able to afford, checks notes, nothing at all. There is LESS STUFF for everyone. These people, especially the urban ones, they live in fantasy land, I've seen some of those cretins say supply and demand is a myth. WAT? That's so dumb, boy are they about to learn their lesson. It is an endless circle. Prices go up, prod goes down, there is less stuff, people push prices up, prices go up, prod goes down, and so on. Maybe reptilian brained people panic fight each other for toilet paper and pasta again? Rubs hands. Few eat soybeans, only california millenials from what I hear, what it is used for is feeding domestic animals, not the friend kind, the food kind, soybean gets turned into milk, steaks, pork chops, bacon and beef jerky and all those industrial products made from meat that americans eat like candy. Americans have a ghrelin disease, they get ravenously hungry they'd kill to eat buckets of food. Also the situation in Argentina not getting better, farmers waging war to the socialists. The weather is really dry in Argentina, these big bags of beans could catch fire very easily, damn it would be a shame if they started to burn (again). The freezing cold weather did not help, other producers are rekt because of cold & wet. Who else is heavilly impacting this? The big buyers in the far east have stocks but they'll have to buy eventually hehe. In this inflation env, any negative event will push the price up anyway, and "positive" event will just make it pullback or sideways a bit, maybe only slow it down. I think the price will chop chop a bit on its way up, chop chop not as hurry up I mean go back and forth :p, then bears will break and it will slide vertically. To ~17$, which is a very special price you know.
CBOT:ZS1!Long
by MrRenev
4