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Grains Trading


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Grains Trading

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  #21 (permalink)
Arpeggi
Chicago, IL
 
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tigertrader View Post
There is more capital flowing into commodities than any other asset class. In fact the CRB Index is trading at historical highs. Consequently grains are trading at price levels and at an implied volatility that are usually reserved for the summer months.Thus, there is no doubt they are in play or they are moving around. However, please keep in mind that even though the open interest and price movement is there, the liquidity may not be there, or at least may not be what you are used to, with the more heavily traded futures contracts.

To put in perspective the 5 day average volume for ES, ZN, ZC and ZS are as follows:

E-minis - 2,000,000
10 Year Notes - 1.200,000

Corn - 143,000
Soybeans - 100,000

Capital may be flowing into the commodity sector, and grains in particular, but trading volume and liquidity are still considerably greater in the ES and ZN.

But also take into account the relationship between crude and corn now ( I say "now" when it has been going on for some time). I think the top has yet to be seen. Activity in CZ1 contracts has been rather interesting these past few days. Cotton is a joke - limit up, limit down, limit down, limit up - the swings continue.

I started a thread in the elite section where I plan on sharing some of my ideas. Not so much in the futures, but options. If the OP is still looking to learn more about grains I wouldn't mind providing some assistance.

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  #22 (permalink)
 
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 tigertrader 
Philly, Pa
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Arpeggi View Post
But also take into account the relationship between crude and corn now ( I say "now" when it has been going on for some time). I think the top has yet to be seen. Activity in CZ1 contracts has been rather interesting these past few days. Cotton is a joke - limit up, limit down, limit down, limit up - the swings continue.

I started a thread in the elite section where I plan on sharing some of my ideas. Not so much in the futures, but options. If the OP is still looking to learn more about grains I wouldn't mind providing some assistance.


I was referring to the liquidity risk of trading grains vs. more liquid instrumnts.

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  #23 (permalink)
 benaam 
Mumbai, India
 
Posts: 12 since Mar 2011


I have been trading them for 4 years now, only thing that works is Long in far months and hold. They are in continuous uptrend and small corrections are also good opportunities to buy.

USDA's Soybean is most promising, followed by CORN(for volume entry) and Wheat. You could also try milling wheat, or palm oil contracts or even soymeal+soyoil.

(first post here)

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  #24 (permalink)
Paladin
Princeton, New Jersey, USA
 
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Very informative thread!

I am an ES intraday trader, and am used to near- round the clock trading. But I am fascinated by other markets. I checked the volume and it seems that for corn, soybeans complex and wheat, there seems to be enough volume to do intraday trading. However, I have no direct experience. I use 1 min, 5 min and tick charts to make decision on ES.

So for people comfortable with intraday trading in various markets, my questions are:

Is intraday trading feasible for grains (and sugar for that matter), or is it best done on an end of day basis?

I am not exactly sure what to make of the split sessions, with big breaks in between. Any comments on the dynamics of price movement in such a market?

Thanks in advance!

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  #25 (permalink)
Mookie9920
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Paladin View Post
Very informative thread!

I am an ES intraday trader, and am used to near- round the clock trading. But I am fascinated by other markets. I checked the volume and it seems that for corn, soybeans complex and wheat, there seems to be enough volume to do intraday trading. However, I have no direct experience. I use 1 min, 5 min and tick charts to make decision on ES.

So for people comfortable with intraday trading in various markets, my questions are:

Is intraday trading feasible for grains (and sugar for that matter), or is it best done on an end of day basis?

I am not exactly sure what to make of the split sessions, with big breaks in between. Any comments on the dynamics of price movement in such a market?


Thanks in advance!


Lately grains have been slow, but during the summer the volume deff picks up and are more than able to be day traded. John Carter talked about earlier in his career most of his day trade profits were from trading the ags over the summer.

It can move quick, and each cent moved is like a point in the S&P. For example, on the 2nd of march, corn from peak to bottom moved 32 cents, that is like a 32 point move in the S&P. Limit down days and up days are fun. Soybeans can move even quicker, and is more volatile. If you starting out I would trade corn, than move onto soybeans. On a limit down day I got owned in soybeans because it was so volatile and my 3 point stop loss wasn't enough.

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  #26 (permalink)
Arpeggi
Chicago, IL
 
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If you are looking for quick activity i suggest looking into the options on these instruments. Even when they go limit up/down, the options are still traded. That's when things really get interesting - just be sure you're familiar with synthetics.

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  #27 (permalink)
kenz987
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"Trading Places"
Dan Aykroyd, Eddie Murphy

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  #28 (permalink)
 sysot1t 
 
Posts: 1,173 since Nov 2009


kenz987 View Post
"Trading Places"
Dan Aykroyd, Eddie Murphy

their best work IMO... just love that movie..

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  #29 (permalink)
 ron99 
Cleveland, OH
 
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Arpeggi View Post
If you are looking for quick activity i suggest looking into the options on these instruments. Even when they go limit up/down, the options are still traded. That's when things really get interesting - just be sure you're familiar with synthetics.

The options have daily limits on price movement.

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  #30 (permalink)
 ron99 
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Mookie9920 View Post
Also, I remember someone in a webinar saying July 4th weekend you should keep an eye on, because thats when it starts to really move and will take off one way or another.

The annual USDA Acreage Report is on the last weekday of June. Report at 8:30am ET. The quarterly grain stocks report is also released at the same time. Those report will cause the markets to move one way or the other.

The prospective plantings report is the last weekday in March.

Huge and possible limit moves on those days.

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