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Grains & Beans


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Grains & Beans

  #1 (permalink)
 myrrdin 
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The spread 5*CZ17-2*SX17 currently is priced below -90.

Since 1990 this spread was priced below 0 only once (1997) in January.

Whereas seasonals are slightly downwards, I think this spread has significant upwards potential, at least until early next year.

Acreage will be an important topic soon. According to Hightower, analysts talk about a shift of 2 mio. acres from corn to soybeans.

I expect this spread to be priced above 0 some time in Q1.

Best regards, Myrrdin

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  #3 (permalink)
 
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 SMCJB 
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myrrdin View Post
The spread 5*CZ17-2*SX17 currently is priced below -90.

So that's a Corn/Soybean spread.
Why the 5:2 ratio, aren't they both 5000 Bushel contracts?

myrrdin View Post
Acreage will be an important topic soon. According to Hightower, analysts talk about a shift of 2 mio. acres from corn to soybeans.

If you think of the acreage as a ratio do you have any idea where it is versus history.

Thanks for starting the thread/suggesting the trade.
I don't have the ability to trade CBOT ($1020 in data feeds a year) currently but will take a look.

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  #4 (permalink)
 myrrdin 
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SMCJB View Post
So that's a Corn/Soybean spread.
Why the 5:2 ratio, aren't they both 5000 Bushel contracts?

If you think of the acreage as a ratio do you have any idea where it is versus history.

Thanks for starting the thread/suggesting the trade.
I don't have the ability to trade CBOT ($1020 in data feeds a year) currently but will take a look.

Yes, both contracts have the same size. But the bushel of soybeans costs more than double the amount of a bushel of corn. I prefer to have the same $-value on each side a spread. Thus, if the price of both commodities rises by 10 % the spread remains constant.

Sorry, I do not have this ratio for earlier years. But the relation between soybean price and corn price is very high for this time of the year, and this supports the idea that area will move from corn to soybeans.

I am a private trader, and, thus, pay much less for CBOT data.

Best regards, Myrrdin

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 myrrdin 
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A spread I like at this time of the year for seasonal reasons is the CZ17-CZ18. According to MRCI this spread should move upwards from end of November until early March.

In my opinion this spread should have special merits, as current price levels seem to suggest a move of acreage from corn to beans.

Furthermore, there is not much weather premium priced in for South America. Weather forecasts currently are excellent, but there is still a long way to go.

I intend to buy the CZ17-CZ18 at around -20.

Best regards, Myrrdin

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  #6 (permalink)
awaddle
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Thanks for starting the thread. I have always been curious about trading spreads/grains in general. So far a lot of insight being provided here. Keep up the good work!

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  #7 (permalink)
 myrrdin 
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Please be aware that USDA will publish their Baseline forecasts, including a first glance at 2017 US acreage for beans and corn.

This report might confirm 2.5-3.0 mil acre gain in next year’s US soy area, which is discussed widely. But currently bean prices are driven by demand topics, and planting is some months away. Thus, I am not sure that this report will move the C-S spreads substantially.

Best regards, Myrrdin

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  #8 (permalink)
 myrrdin 
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Sold the SN-SX at 37.25 with a target of 20 or lower. Stop on a close above the recent highs.

While crude oil price moved upwards strongly soybeans did not follow. To me it looks like beans are coming down again.

Best regards, Myrrdin

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  #9 (permalink)
 jokertrader 
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Beans close to the famed 10.30 support for Jan contract Crush numbers out tomorrow eve we shall see by Friday typically 1 more bearish week until mid Dec for beans


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  #10 (permalink)
 myrrdin 
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Bought the SMH-BOH yesterday before the close. Stop on a close below the recent los.

This spread was driven down by BO, but now all relevant news should be priced in. BO did not move upwards with CL yesterday - a sign for weekness.

Best regards, Myrrdin

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