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Why did Soybean Conditions Decline?

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Why did Soybean Conditions Decline?

Jun 27, 2017

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS ANDMAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.

After a sharp drop last week grains are trying to find some stability early this week and crop conditions helped to add support especially for soybeans. After a couple weeks of better weather in much of the growing area traders were expecting an improvement in the soybean crop. Conditions went the other way however with the NASS reporting a 1% decline in the good to excellent category. What does this mean for soybeans?

The last two weeks have seen better weather in a large part of the US growing area with improved rains and cooler temperatures. There have been sports that have missed out on rains, but others have benefited. With this in mind the trade was expecting soybean conditions to improve 1-2%.

On Monday afternoon the NASS reported the soybean crop at 66% good to Excellent condition. This is down 1% from last week and 6% lower than last year. While crops did improve in some areas ongoing issues in the North West and East offset any improvement. The question now will be – After a stretch of better weather why didn’t the crop improve overall?

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The concern going forward might be that if better weather did not help the crop to improve has there been damage done that will not be reversed by weather? Even though problem areas remain the general thought that the better weather would help the good areas improve more than the declines in the areas under stress. Only time will tell if the crop is able to improve.

With the holiday weekend we will have to wait until next Wednesday to see the next Crop Progress report. In the mean time there are widespread rains forecasted for the bulk of the growing area including some of the key areas under stress. The trade will be watching the weather very closely in the next week to make sure these rains materialize as advertised and then the question will be – did it help the crop to improve?

It is important to note that it is still very early in the soybean growing season and that we are still over a month away from the key moisture sensitive time frame for most of the growing area. Soybeans have come back from poor conditions in the past and been able to produce good crops. Either way this soybean crop is not off to a great start and this could be an interesting growing season.

We have complimentary 2017 commodity reference calendars available. They are a little bigger than pocket sized and very useful if you follow markets. You can sign up for yours here – http://www.zaner.com/offers/calendar.asp (Shipping to the US only)

Give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action. Ted Seifried – (312) 277-0113. Also, feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit.Follow me on twitter @thetedspread if you like.

JulyCorn Daily chart:

JulySoybeans Daily chart:

JulyWheat Dailychart:

Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.

In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!

Ted Seifried (312) 277-0113 or tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie

Futures, options and forex trading is speculative in nature and involves substantial risk of loss. This commentary should be conveyed as a solicitation for entry into derivitives transactions. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION’S STRIKE PRICE COMPARES TO THE UNDERLYING FUTURE’S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR EVEN MOVE IN THE OPPOSITE DIRECTION.

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