Ags, New Crop Experiencing a Bounce (corn, soybeans, wheat)

A broken clock is correct twice a day…and just sometimes when we look for a bounce or retracement the market delivers. In the last two sessions the Ags have jumped and as of this post corn has climbed 5.7% in the last 2 sessions, soybeans is 4.2% off its lows and wheat (my current pick) has gained 3.1%. You may ask why my pick is the worst performer of the bunch…well I look at it a different way I think though wheat may lag I view the least amount of risk.

These three Agriculture commodities are moving for different reasons but I do expect them to move in the same direction…higher in the coming weeks. Corn and soybeans are moving on weather concerns that may affect yields. Based on the recent COT report there likely is some short covering as this market got turned around quickly. We are seeing a decent amount of exports of wheat at depressed levels. Under $7 bushel apparently had international buyers interested enough to make purchases.

Corn:
Ags - Corn Futures, July 9, 2013

December corn just crossed the 9 day MA (green line) today briefly poking its head above the 38.2% Fibonacci level. Continue to use the Fibonacci levels overhead to guide you on the trade…at $5.30 and $5.40 respectively.

Soybeans:
Ags - Soy Bean Futures, July 9, 2013

We are bouncing off six week lows as futures retook their 50 day MA (blue line) yesterday and we experienced follow through today. In quick fashion beans probed their 38.2% Fib level and as of this post futures are just below their 20 day MA (light blue line). Set backs that are supported could be bought as long as the 50 day MA holds; currently at $1248’2. I believe this leg will lift futures north of $13/bushel but I do not anticipate fresh highs at this juncture.

Wheat:
Ags - Wheat Futures, July 2013
A solid base appears to have formed in recent weeks just under $6.70/bushel. As I pointed out in a post yesterday will 666 (contract low 7/1) end up being an inflection point in wheat much as it was in the S&P back in 09’? The 20 day MA (light blue line) was challenged on today’s highs. After overcoming that hurdle use the Fibonacci levels to help guide you with your exit levels. My suggested trade strategy with current clients is long futures while simultaneously selling out of the money calls 1:1.

To see Bradbard quoted in a piece published on 7/9/13 commenting on cocoa click on link below:

WSJ 7/9/13

As always, I’m here to discuss specifics and give guidance. Shoot me an email… Give me a call… you can reach me at: mbradbard@rcmam.com or 954-929-9997

Risk Disclaimer: This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities and/ or financial products herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed to be accurate. You should fully understand the risks associated with trading futures, options and retail off-exchange foreign currency transactions (“Forex”) before making any trades. Trading futures, options, and Forex involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more than your initial investment. Opinions, market data, and recommendations are subject to change without notice. Past performance is not necessarily indicative of future results. This report contains research as defined in applicable CFTC regulations. Both RCM Asset Management and the research analyst may have positions in the financial products discussed.

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