Ag trade ideas

Discussion in 'Commodity Futures' started by TraDaToR, Aug 24, 2014.

  1. I am currently using the Pro version which has a small monthly fee. It provides EOD data for many futures contracts and intra-day for stocks and Forex.
     
    #11     Aug 26, 2014
    Brighton likes this.
  2. @GiantHogweed SM/BO
    On seasonality, I am always cautious on this thing because there is few points for the seasonality. Only one a year ! Its difficult to get something robust. And soycomplex seasonality could be influenced by south america nowadays. Did you get good trades using seasonality ?


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    There are times seasonality works and times it doesn't so I prefer to see strength in the seasonal direction before I enter. Keeping an eye on the fundamentals will help decision making. If the price action is poor, then I don't take the trade.

    There are enough possible seasonality trades for me as I am a swing trader. Generally I can find ~200 seasonals per year that are a starting point.
     
    #12     Aug 26, 2014
  3. TraDaToR

    TraDaToR

    I am super cautious about seasonality too. I lost a lot of money in 2012 blindly following a system like "long Dec/ Short Apr hogs on July 20th, close on august 10th". It should be a filter like Giant Hogweed said, nothing more.
     
    #13     Aug 26, 2014
  4. Brighton

    Brighton

    I forgot to mention that the more complete "cattle crush" where you raise cattle on paper is actually: Long Feeder Cattle, Long Corn, Short Live Cattle. You should also go long a cowboy hat, some boots and a pick-up truck if you want to be more authentic.

    I'm not sure what you mean by significant, but there is more information on the spread on the CME and Iowa State extension sites including ratios and which months to use. One example:
    http://www.cmegroup.com/trading/agricultural/files/AC-378_CattleFeedingWhitePaper_r2.pdf
     
    #14     Aug 26, 2014
  5. Brighton

    Brighton

    Soybean inverse collapsing, but bean oil holding up. FWIW, check out these cash bids for Cargill soybean processing, Sidney, Ohio. Usually you see bids by the half month period. Not now, and the week to week drop off is STEEP.
     
    #15     Aug 26, 2014
    TraDaToR likes this.
  6. #16     Aug 26, 2014
    TraDaToR likes this.
  7. TraDaToR

    TraDaToR

    Brighton, where do you get those basis levels? I know nothing about basis( never been involved in physical grains ) but does it help you trade the futures markets when you know about odd supply/demand situation in specific locations? 3.3 basis in Ohio( not far from Chicago ) seems huge to me but I am a newbie...

    Giant Hogweed,- 68 below previous lows would have been a hell of a trade. Historically this spread has been going lower year after year...
     
    #17     Aug 27, 2014
  8. Brighton

    Brighton

    You can use the sites of the big grain companies. The one above was from Cargill Ag Horizons, but CHS (Cenex Harvest States), ADM, et al will have something similar. There is also DTN plus a number of cash grain reports (terminals and processors) from the USDA (USDA AMS - Agric Marketing Service).

    http://www.cargillag.com/Marketing/LocalBids/local-bids-center

    http://farmfutures.com/ (lower left on main page - look for 'weekly analysis' - usually some useful text and then you click to download a pdf with lots of basis charts). I don't follow every week but it's a good, free source to get a handle on things.

    I have some experience in the cash grain markets but it's dated. I understand what drives basis, but I don't watch it like a hawk anymore. If you're an active trader of futures spreads and trade them near delivery, you'll probably pay closer attention to basis. For me, I watch during the old-new crop changeover (now) and periodically to get a handle on processor and export demand or transportation problems.

    One note about Chicago - it used to be that Chicago, Toledo, St. Louis and Kansas City were THE delivery points for the grain contracts (and maybe Decatur, IL for meal and oil ... I'm not sure). Today, there are many more delivery points and a complicated variable storage rate calculation in the wheat market. Again, if you trade spreads based on fundamentals and hold them near delivery, there is a bunch of homework that needs to be done to learn the mechanics.
     
    Last edited: Aug 27, 2014
    #18     Aug 27, 2014
    TraDaToR likes this.
  9. @TraDaToR on soycrush
    I just remake my statisitcal study for selling the crush spread when its in the top 5 % (defined by previous data to avoid data snooping) and close the spread when its in the top 10%. Taking 2.6 $/future and no bid/ask spread (which is genereous), I got a SR of 0.75 on 39 trades of 14 days average length.
     
    #19     Aug 27, 2014
  10. #20     Aug 27, 2014