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I'm also short soybeans but didn't get in as early so I have on 1700s.
From the technical side we are currently in a band of resistance from approximately 1400-1500. I would anticipate that we will see some sort of pause in this area.
Near-term fundamentals remain bullish with high heat in the mid-west corn belt area likely to persist through the end of the week. Once we get into September we'll be in harvest season as there is a strong seasonal tendency to sell off during this period.
Can you help answer these questions from other members on NexusFi?
Yes, prices historically seem to peak about the end of August. I feel the runup will stall soon, but then again a lot of people are thinking price will keep going up - 100 points in 2 days!
This shows why I rarely trade grains during the growing season. Way too volatile and unpredictable.
CTZ3 this month. Up 8 down 9 in 3 weeks. SX3 up $2 in 3 weeks.
Now about that drop in Sep for S. Down 4 of last 6 years but up a $1 in 2007 & 2010. If the Midwest doesn't get some rain soon then this year could be up in Sep too.
But if you are far enough OTM a $1 rise in 4 weeks shouldn't be too much of a bother. The bigger worry might be more increases in margin rates.
Interesting that Nov S also had a $1.50+ rise in Aug in 2011 & 2012. So 3 years in a row. Matches seasonal chart. So selling S calls in August might not be the best thing to do.
August is when the soybean plant sets pods. So having moisture and not having extreme heat is very important during this time.
Thanks Ron. That seems like the smart plan. Rolling can be a good idea when the fundamentals favor you; however, the short-term pain may not be worth holding on.
I covered my 1700 calls this morning taking about an 8% hit on the account (largest loss for the year thus far). However, I freed up 35% of my usable margin.
You can still put on the calls when it starts raining. Might make good amount of money in short time frame.
I might be doing that for my first grain trade of the summer.
Sometimes when you roll it is best to just wait for the best time to put on the further OTM strikes after you get out of what you have. The roll doesn't need to happen right away. Of course sometimes that will be wrong, but usually it is right more than wrong.