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Grains & Beans

  #71 (permalink)
 myrrdin 
Linz Austria
 
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jokertrader View Post
Act to George angell, buying Chicago wheat and selling Kansas wheat March 1 and liquidating June 1 is the trade the examples from the book real time commodity spreads are all from 70s and 80s .. @myrrdin looks like u have the opp trade unless I am totally wrong


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Correct, I hold the KWN-WN for fundamental reasons (seasonal, S&D).

It is a general problem to use very old seasonal charts, as the circumstances have changed, as I have shown in the thread "Seasonal Trades".

The seasonal chart for KWN-WN looks positive until middle of March. Weather has not been friendly for Kansas Wheat in recent weeks. The problem with weather is that we cannot see the consequences until spring. Thus, the move upwards could occur in a couple of months.

My target is somewhere between 20 and 35 c.

It is important to keep lot size at a moderate level.

Best regards, Myrrdin

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  #72 (permalink)
 myrrdin 
Linz Austria
 
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I currently hold the following positions in grains & beans:

KWN-WN
Longterm trade.
Seasonality is favourable according to MRCI data.

KWZ-MWZ
Longterm trade.
Last year there were problems regarding Minneapolis Wheat. The spread for the next crop looks severely overvalued. It is important to keep lot size small as MW price can move upwards severely.

SN C1000 - short-dated SX C1000
Longterm trade. Large portential in case of weather problem in South Americas, limited risk.

5*CZ - 2*SX
Longterm trade. I assume US acres moving from corn to beans. Weather risk of safrina crop (corn after beans) in South America.

Best regards, Myrrdin

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  #73 (permalink)
 myrrdin 
Linz Austria
 
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myrrdin View Post
I currently hold the following positions in grains & beans:

KWN-WN
Longterm trade.
Seasonality is favourable according to MRCI data.

KWZ-MWZ
Longterm trade.
Last year there were problems regarding Minneapolis Wheat. The spread for the next crop looks severely overvalued. It is important to keep lot size small as MW price can move upwards severely.

SN C1000 - short-dated SX C1000
Longterm trade. Large portential in case of weather problem in South Americas, limited risk.

5*CZ - 2*SX
Longterm trade. I assume US acres moving from corn to beans. Weather risk of safrina crop (corn after beans) in South America.

Best regards, Myrrdin

I currently hold the following positions in grains & beans:

KWN-WN
Longterm trade.
Seasonality is favourable according to MRCI data.

(KWZ)-MWZ
Sold the KWZ, but still hold a short position in the MWZ
Longterm trade.
Last year there were problems regarding Minneapolis Wheat. The spread for the next crop looks severely overvalued. It is important to keep lot size small as MW price can move upwards severely.

(SN C1000 - short-dated SX C1000)
Liquidated the position as no weather problem in South Americas materialized.

5*CZ - 2*SX
Longterm trade. I assume US acres moving from corn to beans. Weather risk of safrina crop (corn after beans) in South America.

SX9-SN9
Brazil crop looks great, and gains here should compensate for losses in Argentine. US acreage will grow compared to estimates in my opinion.

Best regards, Myrrdin

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  #74 (permalink)
 jokertrader 
NYC, NY
 
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Seasonal long early March out in June
Thinking of getting in if close to -30

Edit: sorry meant KCN8
Thoughts??

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  #75 (permalink)
 myrrdin 
Linz Austria
 
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jokertrader View Post
Seasonal long early March out in June
Thinking of getting in if close to -30

Edit: sorry meant KCN8
Thoughts??

I assume you mean KWN8. KCN8 is coffee.

According to MRCI seasonal data I would enter the KWN-WN from ths long side, and not the WN-KWN. Also dryness in the areas where Kansas Wheat is grown suggests being long KWN and short WN.

I currently hold the KWN-WN, but it is rather late to enter the spread. Depending on the weather, it can move further or not. My target is between 30 and 35 c, but I will liquidate in case of a move back, as the trade is already highly profitable.

Best regards, Myrrdin

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  #76 (permalink)
rajab
westhills california US
 
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HI myrrdin

I think you mentioned you use no more than 3% of your total account per trade. So my understanding is if you were to sell puts on Soybeans for a certain premium on a 100k account your max on this trade would be 3k. Now is that the 3k the margin you keep or the premium made. I hope I am clear on this point.

THANK
Babak

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  #77 (permalink)
 myrrdin 
Linz Austria
 
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rajab View Post
HI myrrdin

I think you mentioned you use no more than 3% of your total account per trade. So my understanding is if you were to sell puts on Soybeans for a certain premium on a 100k account your max on this trade would be 3k. Now is that the 3k the margin you keep or the premium made. I hope I am clear on this point.

THANK
Babak

Correct, I prfer to risk 1 - 3 % of the account value per trade.

The size of the trade depends on the stop I place. When I liquidate the trade at double the price I had received as a premium, I would sell a maximum of 3k per 100 k account value. In case I decide to have a closer or wider stop, the maximum premium is different.

Thus, 3k is the premium, and not the margin.

These figures are approximate figures as I usually liquidate trades only end of day.

Best regards, Myrrdin

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  #78 (permalink)
 myrrdin 
Linz Austria
 
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myrrdin View Post
I currently hold the following positions in grains & beans:

...

5*CZ - 2*SX
Longterm trade. I assume US acres moving from corn to beans. Weather risk of safrina crop (corn after beans) in South America.

...

Best regards, Myrrdin

Prospective planting Intentions Report will be published end of March.

Spring insurance guarantee prices were set for corn at $3.96 (2017: 3.96) and for sysbeans at 10.16 (2017: 10.19). Prices for 2017 and 2018 are approximately the same. Relation of actual CZ to SX prices is approximately the same in 2017 and 2018.

Last year the relation of CZ to SX moved up strongly until early June. The same could happen this year, if

safrina crop for corn is late, which seems quite possible,
acreage for soybeans rises compared to corn in the US, and
damage for S in Argentina is more or less priced.

Best regards, Myrrdin

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  #79 (permalink)
 myrrdin 
Linz Austria
 
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My favorite positions in the grains & beans currently are:

Short CZ P4 (short-dated contract, expiring in June)
Supply & Demand (S&P) bearish according to recent USDA Report

Short KWN P5
KWN-WN
Dryness; larger wheat acreage according to USDA Report mainly for Minneapolis Wheat

CZ-SX
Acreage might move from corn and Minneapolis Wheat to beans; uncertainty regaring safrina corn; very bullish USDA Report

Best regards, Myrrdin

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  #80 (permalink)
 myrrdin 
Linz Austria
 
Experience: Advanced
Platform: TWS
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Trading: Commodities
Posts: 1,938 since Nov 2014
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Thanks Received: 2,651


My positions in the grains & beans currently are:

Short CZ P4, P4.1 (short-dated contract, expiring in June)
Supply & Demand (S&P) bearish according to recent USDA Report

KWN-WN
Dryness

5*CZ-2*SX
Acreage might move from corn and Minneapolis Wheat to beans; uncertainty regaring safrina corn

SMN-SMZ
Shortage of Meal from Argentina. This positions also serves as a hedge for the short beans position in the CZ-SX spread.

Short WZ C7. This position also serves as a partial hedge for the long corn positions.

Best regards, Myrrdin

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Last Updated on October 5, 2022


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