While winter break is upon us and many are restless to finish their holiday shopping and be with their families, we also know nobody likes to miss out on what’s happening in the markets and global news while still at work. Here’s what we are watching heading into the holidays!
What We’re Seeing in Sugar
(graphs from Bloomberg below)
Will sugar stay between 15.50 and 13.60 forever? We have been there since June 29th.
This week we shot right back to the middle of the range after a relentless decline off the highs of the range.
This in itself signals strength. All markets break out of a trading range. The next sugar trades to 15.50 it won’t stop there.
 
​​SMLXL

 
Today in Grains
At the close, the March corn futures settled 2¢ higher at $3.51. May futures finished 2¢ higher at $3.59. Jan. soybean futures settled 5 1/4¢ lower at $9.48 3/4.  March soybean futures closed 5 1/4¢ lower at $9.59. March wheat futures closed 3¢ higher at $4.27.
Corn 
It is important to look at the big picture.
Basis the corn chart of this century, what stands out?
  1. When the ethanol mandate went into effect, the price paradigm shifted from lows of $2.00 to $3.00.
  2. All markets correlate in bubbles and crashes – 2008.
  3. Corn is very sensitive to slightest bit of weather (and demand), 2011, 2012.
  4. Don’t sell corn on a HTA basis in the $3.00 – $3.50 area.
​​SMLXL

 
 
​Soybeans
  1. Soybeans too, shifted to a new paradigm since 2000. $6.00 to $9.00.
  2. All assets are correlated in bubble and crashes – 2008.
  3. Really demand sensitive – 2012.
  4. Beans are not so bad at $9.50, however I would use a strategy that leaves the upside open.
​​SMLXL

Wheat
  1. Wheat did not see the paradigm shift that corn and beans did.
  2. Wheat went crazy in 2008, weather issue and then the financial bubble hit.
  3. The drought of the northern plains could be more severe this year.
​​SMLXL