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Ag trade ideas

  1. Hello,

    The recent flow of threads in the ag forum makes me believe there is some interest in fundamentals/curve/interproduct analysis of ag markets. I would like to create a thread where we can discuss some specific opportunities...You think the March 2015 crush margin is too rich? Post it here. Soyoil Mar/May > Full Carry?milk prices doesn't reflect cattle market problems and you find it odd?please post. Any trade idea is welcome.
  2. Here's a couple trades I am currently working. SMZ/BOZ looks like it could run some more, but the squeeze action in the Sep SM contract has me wondering when the selling will start in the Dec?



    Another trade is KWZ/SX. Pretty volatile as well, fundamentals should keep this one working, but for how long?

  3. What is the basis for the first trade( soymeal/oil )? There were some articles last week about soyoil bottoming( ratio with palm oil...).

    Your trade made me check the nov crush. The crush margin is almost at its highest level in 20 years( unfinished purple line on the right ):


    There should be a trade here too...:)
  4. @TraDaToR
    1 - Milk, feeder cattle and live cattle are trading higher and higher from 2009. The ratio is quite on low levels but I dont know exactly what is the fundamental link between feeder cattle and milk. Do you think farmers can switch between producing milk and feeder cattle ? Or at least buying less feeder cattle because its too expensive for milk producers ?

    2 - Where do you find the full carry of bean oil ? If I look backward, I find a lof of years with higher spread between may & march expiry

    3 - I am not at 100 % but in my memory my statistical study showed that the crush spread isn't "mean reverting" when we are close to the expiry (200 days). It seems that you graphic is showing that its mean reverting so I am confused. I need to check this fact again.


    What is behind the KW/S spread ? The link between between these products is not obvious for me. Not the same producer, not the same consumer.
  5. Rachmaninov, those were just examples of the kind of trade idea I would find interesting. Just to illustrate the principle of the thread. I really don't know the link between milk and cattle markets or bean oïl carrying charges...But perhaps some people do ...And I would love to hear from them. I guess you are right on the crush. Generally just about any spread gets less mean reverting towards the end as individual expiries get more volatile...
  6. Rachmaninov - Someone else may chime in with better information, but I'm not aware of a common spread trade in milk/feeder cattle. In the US the producers (dairy farmers v. ranchers) are going to be largely distinct so I don't think the switching you refer to happens. It's more herd expansion v. contraction based on market economics for their respective sectors.

    That's not to say there isn't *some* correlation but I'd guess that it's due to feed costs, but even there, Feeder Cattle (animals raised for beef, not milk) are largely grass-fed and then they go to be fattened up and eventually become the Live Cattle contract.

    You may find better, easier to trade relationships with the livestock feeding margins (some people call them feeding spreads or the cattle or hog crush). Corn v. Live Cattle or Corn + Meal v. Lean Hogs. Or make your own with Class III milk (the most liquid, no pun intended) vs. Corn + maybe meal.
  7. I like using seasonality as a filter for possible trades and SM/BO is good right now. I entered when the price action looked good. I'm not following palm oil, but do follow the bean market itself. We'll see if the selling from today continues....

    I did a lot of work a few years ago on trying to find good mean reversion trades on the crush spread and I just couldn't make it work. Nowadays I need to see some good volatility before I enter. For example, NG, ED spreads right now require too many lots.
  8. @Brighton
    Your argument on milk/cattle makes sense for even if we lack some informations.
    I already tried Corn v. Live Cattle & Corn + Meal v. Lean Hogs and the cattle crush and didnt find anything significant.

    @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 ?

  9. 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.
  10. @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 ?


    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.
  11. 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.
  12. 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:
  13. 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.
  14. 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...
  15. 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://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.
  16. @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.
  17. Yes, there are a lot of good S&D charts there. Usually Hightower updates them within a day or two of the USDA release dates.

    You might want to take a screen shot of the corn, soy or wheat page. In the future you may need to type in the name of a report in the search box to find it. They've been moving these reports around a lot and each time they change the URL.
  18. I have something interesting on sugar but it is my first sugar curve play, so take it with a grain of salt. IMO because of the big gap between 2014 and 2015 expiries, the shape of the curve in 2015 is unusual. March and May are too low compared to a typical year like 2016. Mar/May and May/Jul are at historical lows and probably near full carry( didn't dig it further on ICE website ). Mar/may is still trending lower but May/Jul is now forming a bottom. I bought it today @ -0.24. I am looking for a target near 0 but I won't let it run after the end of the year.

  19. I don't follow sugar much, but I took a stab at the V4/V5 earlier this year and got stopped out. This spread is still in a steep downtrend and is currently @ -3.04. This is second lowest in the past 30 yrs, with only the 2008 low of -3.23 ahead....

    Do you know what part of the year has the largest supplies?

    This is the only free site I have found with some sugar commentary. Do you know of any others?
  20. Softs - fundamental news sources

    https://www.theice.com/products/23/specs Look for SOFTS FAST FACTS. This is the Judy Ganes monthly report provided by ICE. She knows her stuff but charges a lot for the report(s) with price and trade ideas. The freebie is worth a read; good education and she'll often hint at her bias or what to watch out for.

    AgriMoney.com - worth a bookmark and has a decent mobile app. One small ad that goes away once you start reading an article.

    Hightower - free via some brokerages (the weekly mkt letter plus daily written and audio reports, which I think are valued at about $80/mo). Weekly market letter on its own is $25/mo. http://www.futures-research.com/

    The USDA no longer puts out frequent Tropical Commodity reports and commentary. Sugar and Coffee are 2x a year. Cocoa is discontinued.

    The ISO/Intl Sugar Organization is really stingy with free info, which is odd because it's supported by government money. The Intl Coffee and Intl Cocoa organizations have a fair amount of free data plus monthly or quarterly reports with charts & analysis.

    Sugar Online - good service, gives you access to some really expensive ISO (sugar) reports at much reduced price compared to buying them direct from the source (strange, but true) http://www.sugaronline.com/

    Note: If you look at the USDA S&D for sugar, they use a different marketing year than the ISO. Keep that in mind if you hear a blurb from the ISO and sometimes from a Licht or Czarnikow analyst.

    Licht, Czarnikow and I think FC Stone International all have ala carte research, but I think it's pretty expensive.
  21. Yep. That's not working in my favor...LOL
  22. Thanks Brighton, good stuff!
  23. Yep thanks brighton. Thats really nice. Did you track the polyester / cotton spread ? They just said that higher polyester prices are supporting demand for cheap cotton.

    Otherwise, here a strategy I would like to trade :
    BUY BO (bean oil) - SELL KPO (Kuala lumpur palm oil) + cover FX

    I think its pretty good trade, the downside is quite limited because KPO is considered as low quality compared to BO. If BO tend to be cheaper than KPO, buyers will prefer KPO. On the otherside, BO can have a substantial premium compared to KPO. I like these assymetrical trades.

    However, I lack datas on KPO (tell me if you have some) to check it on more statistical basis.

    I also lack the right broker to trade KPO.
    Berkley future offer me 50 $/future on all markets so its like they dont like me, its such a crazy price.
    Jefferies & Bach dont answer to my mails. :(
    I feel hard to find a good broker to trade on these particulars markets (Winnipg canola, Eurex, NZX milk, Kualu Lumpur KPO, BM&F and so)
  24. Have you talked to Phillip Futures?

    I believe they are Singapore-based but have an office and clearing memberships in Chicago. I talked to them last Oct or Nov and their rates were decent and they offer trading on the Malaysian exchange. They might be an even better fit if you're outside of the US.

    FWIW, I just glanced at the CME-listed palm oil contract and it looks like it's died a second time (no vol or OI). They tried previously in the mid 1990s.

    I've been doing some research on biodiesel which has led to studying the relationships between rapeseed/canola, palm and soybean oil. I don't have much of a position yet, but based on the historical data, I think your spread trade idea has merit. (It might take a while to play out ... have to get through US soybean harvest first.)

    When I trade the softs it's coffee, cococa or sugar. When I first started trading, I wanted some non-US products that weren't strongly correlated to corn, wheat and soybeans. Right or wrong, I've stuck with that so I've never traded OJ or cotton.
  25. Thanks for philip futures, it has an impressive list of Asia markets. First time I saw so many asian markets in one broket but it sill lacks some important markets for me as Winnipeg & Minneapolis & Euronext Liffe Options.
    Have you any experience on asian markets ? There is some strange and quite liquid on markets on rubber.

    Yeah, CPO CME is dead. I agree with you, the sprea could stay aroud 50 $/t for a lot of time.
    By the way, vegeteable oil are currently really cheap compared to oil. Bullish on very long term.

    Lumber is also a market not correlated to anything else but its really tiny market.

    Here a nice website to find EOD data on a lot of futures markes : quandl
  26. What about Nov14/Jan15 Feeders? There is a seasonal downtrend in the next 2 months and it is forming a triple top. I just shorted @ 6.

  27. Interesting trade, the seasonal lines up and only 2 out of last 30 shows prices higher that 6; roughly 7.75 and 8.5.
    Today is trading over 7 and showing strength. Low corn prices and good demand are driving feeders higher, but nothing lasts forever.

    I'll add to my watchlist and look for weakness to enter.

  28. Also looking at Nov/March. It has a way to go before putting a new high this year and may give more resistance if/when it starts weakening. One downside though is the vol/OI is low compared to Jan.

  29. Oct 14 Bean Crush.png The October bean crush went parabolic, but is losing steam. Looks like a good short here. (Sell Oct meal/oil, buy Oct Beans).
  30. That's Oct/Jan , not Nov/Jan I guess. My spread range today was 5.525 to 6.1.
  31. Nov beans ... just in case someone who is new to this is going bonkers trying to find an Oct bean contract.
  32. October, November, tomayto, tomahto...
  33. Posted a chart with Nov/Jan. :) If the 6.5 resistance holds again, I'll be looking to get in. A short term profit target in the 4.75 area. Medium term between 2.0 and 3.0

  34. I agree. My transactions are too high for the crush though. Getting in and out of three contracts per lot is tough and that still is only a 1:1:1 ratio. Too bad the CS futs have no volume.....
  35. Generally I enter above previous highs but this time I thought the last top would be lower, forming a head and shoulders pattern...target near 3.5 with time stop at the end of october.:)
  36. I dont really understant why this spread should be going down ?

    On the statistics side, my backtests showed that its quite neutral (and volatile).

    On a more fundamental basis, crusher cant crush more than their capacity, so when they have already cover all their capacity they cant do more in the sort term.
    And the three markets will most likely converge to the cash prices with soymeal supported by its shortage.
    I would be afraid to bet on a short trade on the crush because all the people which have already sold would need to go out of this trade because they cant deliver it.

    Is is it just technical analysis ?
  37. I'm in the same boat with you now, short a full position.
  38. My way of thinking on this is more technical. Basically, it has to revert at some point. I don't know if it will happen during the life of the Oct contract, or next year.... Or perhaps that fundamental?? :confused:
  39. You saw those big levels around 6.5? I guess it will hold:)
  40. @GiantHogweed
    I think, its already reverted on longer expiry which are on lower level

    Do you have any sucess with TA ?
    I still dont understand why it should work and its kind of difficult to backtest TA so I never tried it.
  41. Someone selling cocoa options? IV is way higher than historical...
  42. Yes, this key level that is holding so far, even as feeder prices rise.
  43. Not looking good lately...:(
  44. Long Mar / Short May 15 Cotton @ -0.77

    Just feeling that the current buying pressure on December will drag further spreads. Check the curve.:)
  45. By the way, I had several other signals in the last few weeks but mostly in illiquid markets so I didn't post.
  46. With the rebound off the bottom of the range and the possible top in on FCX, I will be looking to add to my position and move up stops. It will depend on tomorrow's action....
  47. Beware that the end of the seasonal downtrend is close( oct 24th statistically ) and the last month can be very volatile for this spread.
  48. Out @ 5700. It didn't play out like it was supposed to but at least it is not a loss.:)
  49. Scratch @ -0.77. Dec is going back in line.
  50. I got out @ 5.50 today on 1/2 my position for a small profit. It was definitely a good trade to take, we'll see how the other 1/2 goes.....
  51. Entered a new position today long Jun hogs/short feb. This one is looking trianglish, is that a word? Has a strong seasonal from Nov through early Jan. Most recent years this spread moved to a 10-20 premium....
  52. Watching this one closely LCJ/G. Nice technical setup, strong season Nov through Dec. Cattle market is a bit crazy though so will want to see support in the -2, -2.5 area before entering.

  53. SK/KWK is starting to look like it may have put in a bottom. Bean harvest around 70% complete so not jumping on this one yet, but will keep an eye on it.

  54. I like this one a lot. Placed a limit order a little lower, waiting for a fill. The triple bottom is enough support for me.
  55. Didn't really have to wait much. In @ 2.150.
  56. I'm in @ 2.0 and may add if it behaves....
  57. Scratched it @ -0.24. spreads near full carry tend to widen towards expiration and it was kind of a dumb trade in the first place...
  58. According to contract specifications, we've got a 0.00197$/bushel/day storage charge from 01-12 to 30-06 and 0.00296 from 01-07 to 30-11, so for this spread with one month with higher charges, it would be an average of 0.0022175$/bushel/day.

    Using the formula on cme website (# Days ∗ [(Interest 360 ∗ Futures Price )+ Daily Storage ] with libor + 200 basis points = 0.0223, I get a 31 cents full carry...???? I don't know if I made an error somewhere...

    However, when we look at historical datas, the maximum ( outside delivery period ) was 28 cents in 2009 and it really rarely go over 20 cents...

    What is the basis for this trade, july being the new crop? Poor quality winter wheat sowings right now?
  59. Here is something I entered last week @2.4. I didn't publish it at first because it is quite illiquid but I guess someone can enter a few lots. Aug/Sep15 Feeders in unusual territory( blue line on the left ). The trade is to get it back in line. I can't see a fundamental reason for what we got now.

  60. Thanks, I see the same 20 cent resistance on the long term charts

    Definitely a technical setup for me. MRCI suggests that the trade will start to focus on the uncertainty of the new crop July now that it is planted, while March is old crop.
  61. Interesting, it looks like the reversion may have started today....
  62. Added to my position today, looking strong. 8 and 10 look like possible resistance.
  63. By the way I use this formula but it rarely matches historically tested levels. Most of the time full financial carry is never reached, but for soyoil for example historical carries are always > this calculated carry, so it should just give you an idea. However, I think for KC wheat, the few times the spread went past 20 cents was in recent history, so it is possible the 2 tier storage charges were recently adopted and spread can go over that level more often in the future.

    Good thing to have the fundamentals on your side, and the russian/ukrainian winter wheat has issues too...
  64. Short Mar/May 16 Coffee @0.6. Little double top + Contango structure in the front of the curve + outrights back to lower values.
  65. Interesting thread, just found it. I watch a lot of ag spreads as well. Specifically, I have been watching the December to January soy meal spread, based upon the explosion in soy meal prices due to a perceived shortage on the east coast. Here is the 2- hour chart of that spread. I think it might get back to $4 to $6, but I'm not sure I would want to short it from here. Looks like it might possibly bounce back up to $20 to $22.
  66. Thanks for posting, meal has been an interesting trade, unfortunately I missed my entry and didn't get on that train.... I agree that the odds favor a short, perhaps a solid break of 16.0 on your chart would be the trigger. I would assume that the shipping delays are fully baked into the pricing here, the question is when will they break back into normal range and reverse the squeeze???

    The spread I've been watching is the Z/N where a breakdown of the range below 37.0 might make sense. May need to move into F/N though as the Dec typically is rolled in just a couple of weeks.


    Another interesting point that I found while researching. The seasonals favor shorts from here for old crop, but once you move into the new crop (i.e. F5/Z5, H5/Z5) the seasonal move is long.
  67. GHW, just a follow up, did you liquidate the remaining of your Nov/Jan Feeders? It is back to higher levels now...

    On the wheat front, I had the idea to go long milling wheat vs other types of wheat two months ago when the news came out that a lot of french wheat would be downgraded to feed, but I didn't take it. Now the move is starting almost 2 months later???? Any ideas why ?
  68. The ZMZ14:F15 spread is popping this morning a couple of bucks, not sure if it is an entry point or not. The mention of wheat made me remember the KC/Chicago wheat spread. I was watching that a lot earlier this summer, but sort of forgot about it. Of course, now it has taken a huge dive to the downside. the momentum is certainly down right now though.
  69. Yes, my profit target was hit on 10/28. My remaining half position went out @ 5.0. Overall a good trade :)

    Sorry, I don't follow the french wheat at all
  70. KW/W is one of my favorite spreads to trade. It definitely has been taking it hard on the downside. The March spread tends to do well mid-Dec through Jan/Feb though. I'll be watching it closely.
  71. This page on the MGEX website has some free commentary from various vendors, about once a week from each. The most interesting to me are the posts that come out on Tuesdays....

  72. Whew, soybeans on a nutty ride this morning, 40 cent trading range.
  73. Wow. I am super impressed at Austin Damiani's commentary. It's super weird he works for frontier futures. It looks like a Mom and Pop futures broker. "Exceptionally active traders can get rates as low as $9/contract."...Yoohoo.

    Do you know of other interesting grain commentary available for free?
  74. Long Mar/ Short May KC Wheat at @-3.5 at the close. Carry > Dec/Mar while it's the end of the 2014 crop and the new crop is lower.
  75. No, that's the best I've found for free.
  76. Scratch @-3.5. New crop july is going higher so the trade is becoming a gamble.
  77. Entered today on a possible break of support, long N and short F. Then it settled back in the range.... :(
  78. That's quite a beast to short...Hopefully with soy harvest at 94% complete, meal will calm down.
  79. I didn't enter because it never pulled back to -4 after I first saw it. There's not enough reward for the risk at these levels.
  80. Got short the ZSF:H15 soy meal spread at around 16.7 yesterday, caught an initial move down but it appears to be catching some support, even though soy meal made a strong move down today.
  81. out @ 1:)
  82. Good trade!
  83. I added to my position yesterday, and will look to add more soon if it behaves. Stops @ -22 & -25. PTs @ -3 & -8

  84. Looking good now, I believe the SM squeeze is over for now....
  85. Got out of that ZSF:H15 spread at 12.6, caught about a $4 move. Option expiration today in the grains, should be interesting to see what happens.
  86. Long Mar LIFFE White Sugar/ Short Mar NYBOT Sugar @ 2583 ratio( 413.8/0.1602 ) based on correlation. My first interproduct spread. We will see what happens...
  87. Out @ 0. Thanks GHW. You can probably make more on the downside with the chart pattern and seasonals ,but it was my initial target...:)
  88. Short Feb/ Long Aug15 Hogs@ -3.6. Strong seasonals to Mid January. Retracement on a trend already in place. No Pedv threat in sight. Market much calmer now.
  89. YW! I took profits on 1/2 of my position last week @ -0.5. It looks like it may breakout of the triangle to the upside so at this point my PT for the remainder is around the +1.5 resistance.
  90. I like the hog bear spreads as well. I am in the M/G spread now @ decent size with a very similar looking chart to the Q/G. One thing I like about these is that they have reached the 15-20 range quite a bit in the past.
  91. Long Feb/ Short Mar15 Class 3 Milk @ -0.06. Small carry while the front of the curve is in steep backwardation. Visual trade.
  92. Anyone looking at this head and shoulders pattern on Soybeans? It is textbook, upward sloping neckline, broke through the neckline yesterday, rallied back up to it today. I give little salt to patterns, but I know everyone is looking at it.
  93. This entry was really poor. The forward curve was so appealing I didn't even look at the chart. I guess the bottom is in now but I should have taken a few more ticks near last week's bottom.
  94. Kind of averaged it down going long the same spread in cash settled cheese @ -0.32. Milk and cheese move in unisson but cheese is still really illiquid.
  95. I think everyone and their mother is watching it, but I don't trade outrights, so I am watching it for the impact on spreads. I don't have a lot of ag spreads looking good for me right now, more in the energies.
  96. Yeah, that chart pattern is absolutely failing right now. Makes me wonder if the funds are even playing the long side on soybeans and trying to fade the smaller players who are short.

    I watch a lot of spreads as well. I have been slowly learning to program in R, and am interested in trying to create some type of trend following system with spreads, maybe with a combination of both quantitative and fundamental factors. I have some very fuzzy ideas I would like to try out, but it will definitely take some work.
  97. Out @ 0.:)
  98. Long -1Mar Feeders/-1 May Corn/+2 Aug Live Cattle = Long the cattle feeding spread @ a margin of -10962$. There is a sort of triple bottom forming on the feeding spread and it is at the same time a GF/LE correlation play. LE crashed more than GF in the last few days.
  99. Short Mar/ Long Oct soyoil @ -0.1 on seasonals.
  100. Out @ 0.1.:) Got Lucky my stop wasn't reached last week. Should have worked my entry better.
  101. Out @ 0. :) Nice profit for such an illiquid market.
  102. Long Mar/ Short May FCOJ @ -1.85 on seasonals. Perhaps too early though...
  103. What's your take on wheats and Russia now, folks?
  104. Good trade so far ...

    Do you hold these trades for a certain length of time ... Or until you get to some objective pattern / price?
  105. I don't know about the Russian situation as it applies to wheat so much. I do think the Russia situation and wheat bullishness bled over to the other grains last week. Option expiration is Friday, and I think funds are still long soybeans. There are a ton of soybean sold puts out there. The higher the soybean price goes, the more of those puts expire worthless.
  106. I have an objective and a stop, but when the trade is going nowhere after a certain amount of time I will try to liquidate at my entry point or wherever it is at the time ...
  107. Looks interesting, I'll keep an eye on it...

    MRCI is suggesting H/U which has a similar pattern on the chart, but U has tiny open interest right now.
  108. Out @ 2635 ratio:). The leg weights ( 1 for 1 )weren't perfect though and the profit is small.
  109. Out @10:)
  110. Nice trade.
  111. Thanks. It's a good period for my short term trades. I meant -10 of course( if you quote spreads like old locals )
  112. Today I also took some profits on 1/2 my position on LHM/G @ 12.0. It still looks strong from here, but you never know...
  113. It's been kinda slow in the ag space for me the last month or so. I'm in SMH/BOH but it's been chopping around my entry. I'm also still hanging on to 1/2 position of LCM/G but it's running out of time.
  114. Close to pulling the trigger on KWK/WK. Starting to build some strength here into a strong time of year.
  115. Really good trade so far ... approx. -8200$ for 2700 dollar profit. How much longer are you holding? What is your exit signal?
  116. My target is around -5000$ margin. The problem is that Live Cattle will be pressured in the index rejig in the next few weeks. It's an interesting trade because it is scalable. You can try to make 50-100K out of it if you want...
  117. Do you guys see any fundamental reason for Feeders to outperform Fats before the end of February?
  118. I took out a little over $1000 in the position last month. Looking to re-enter this week.
  119. Short Soybeans/ Long Wheat soon...

    Guys in the office starting to get bullish on cotton and sugar...thoughts?
  120. The soy/wheat trade worked well seasonally in the last 10 years and it makes sense fundamentally in 2015...

    I have no idea for sugar and Cotton. Why do they think these markets will recover? Every piece of news seems bearish lately.o_O
  121. I am thinking soy/wheat or soy/soy oil. What do you think?

    For sugar and cotton, those guys trading that in my office are mainly on the physical side, so based on their information they are getting , they are starting to feel bullish. I do agree with you though, it seems premature to go long in cotton/sugar.
  122. Don't know about cotton or sugar. Why are they so bullish when the news is clearly bearish?
  123. Marex just announced they were entering the sugar physical business :http://www.agrimoney.com/news/marex...ly-as-it-launches-physical-trading--7831.html

    Hard to tell for soy/soyoil...What do you have in mind? Long soyoil/ Short soy? For what reasons?
  124. I have been watching S/KW for a while and got stopped out a few weeks ago. But it might be worth another try if it puts in another bottom in the range. I like the S/BO seasonals better than the SM/BO I'm currently in, so that's one for my watchlist. Thanks for the idea :)

    I'm not a fundamental trader, but it looks like beans do well in general starting in Feb, I assume this is because South America is in it's critical phase and in the US we are pretty far into the old crop at the same time.
  125. apparently from their conversations with their customers and the producers, the supply-demand response has come in and plantings are going to go down. Some of the guys are bullish on sugar, net non-commercials are at some kind of low. Cash sugar traders are still bearish though...
  126. Yeah I like BO better than SM now. SM/BO (premium to SM) seems to be weakening now.
  127. probably Long S/ Short BO. FWIW, this guy at ADM (admisi) servicing our accounts is telling me he is long term bullish from here as the producers can't sustain production at these levels.

    Anyway, hope we can bounce some ideas around here. Most of the guys are simply hedging so quite difficult for me to get ideas on more speculative positions.
  128. long coffee short beans ,if drought stays in Minas Gerais

    Private weather forecaster Somar warned of irregular rainfall in the center-west soy belt as well as the southeast throughout the month as an atmospheric blockage prevents a cold front from advancing over the key producing regions in the world's largest exporter of coffee, sugar, soy and beef.

    That is especially worrisome in the southeastern state of Minas Gerais, which produces half of Brazil's coffee. Drought there last year wiped out as much as a third of the crop in some areas, causing global arabica prices to rise 50 percent over the year even as most other commodity markets tumbled.

    Scientists said coffee trees would not recover from the extreme heat and drought quickly, and forecasts pointing to below-average rain in January caused arabica prices to rise 12 percent this week.

    Somar agro meteorologist Marco Antonio dos Santos expressed concern about the 2015 coffee crop, which will be harvested between May and August.

  129. maybe they are concern about weather in Brazil and Australia ,some areas look dry
  130. Long Mar KC/ Short Chicago Wheat @ 34 on seasonality and a feeling that KC have been oversold in the last leg down( "Russian sell the news" )compared to euro wheats. I would have preferred to be filled post report...
  131. I also entered part of my position yesterday before the report @ 37. Looking to add some more in the 32 - 34 range. We have strong seasonal tendencies from here into the spring and support in the 20s.
  132. I stopped out of SM/BO and today entered july S/BO for a range play. Good seasonals from here as well.

  133. I wonder if there is a trade to do with the divergence between oil/ethanol versus bean oil and palm oil.
    I feel that the corn and soybean didnt react to the crazy move in oil
    However its kind of difficult to know how much impact oil will have on ethanol & bean oil consumption
  134. Corn has gotten hammered over the past couple of days here, even with a slightly friendly USDA report on Monday. That's a good article on the ethanol demand.
  135. Since fuel costs are such a big part of farming production, no doubt it will help - but you have to also suspect that the corn/ethanol crush will be the sharper side of that double-edged sword. Question is, will more farmers increase Soybean acreage next season ?


    It almost seems like switching from Corn to Beans won't gain much in terms of what the futures market is telling us...


    If Mid-West grain farmers could just sneak ONE of these plants in amongst each planted acre of beans or corn, skip the herbicide step, and declare themselves organic:

  136. Bought @ last week -7600 and sold today -7050 for a few hundred per position. I'm not sure how much more on the upside. How can you tell what the upside is on these ag spreads?
  137. I can't. But this spread kind of broke out of of a trading range between -7000 and -11000 with this weird shape triple bottom. I think it will go to -5000... And anyway the seasonals are still bullish fats vs feeders until early February, so I can't see a reason to get out now...I have a longer term view than you it seems. Good "scalp" anyway.
  138. Now I feel insecure about this spread.Thank you man...lol... If Fats breaks previous low of last month, perhaps I am exiting...
  139. In memory of my hard earned dollars who lost all their value where I live this morning, I will observe a day of silence.
  140. Fuck this. Life continues. Anybody has an idea if the CHF mess can have repercussions on cocoa. Barry Callebaut and Nestlé are Swiss...
  141. Let me tell you about a Cotton Spread I had on a few years ago... stop limit order with fifteen tics never had a chance in a limit up day.

    It's tough to lose your week, but when you give up your month in one day - ouch ! Thanks, Louis Dreyfus. You managed to get Glencore's Head Cotton Trader fired as well.
  142. I feel for you, TraDaTor. I have also seen some of your successful trades here as well, so hopefully that continues.
  143. At least it was a trade... Not some macro event you have no control over which affect your currency...But yes I hear you... I was scalping Cotton in Winter 2011 and it was really wild. The worst stuff is the one you have no control over( limit days, one leg exchange cancellation...)
  144. We all take losses. Hell, yes. On a regular basis. If a person requires absolutes, trading is definitely NOT the place to be.
  145. lol you swiss?
  146. No but living in Switzerland.
  147. Still on the Corn/ethanol subject, I always wondered how much value ethanol would lose if the renewable fuel mandate would be abolished... Physical US demand would drop but at the same time, the RIN substitute has always been available...And ethanol stocks should be sold in Brazil, India, Canada...
  148. Short Mar/May/Jul15 Soymeal Fly@ 49. Mar/May still "deeply" inverted while May/Jul almost in carry + January last quote in delivery period much lower + General post report down trend in beans.
  149. What are everyones thoughts on the July Wheat/Soybean spread? I came across it today. The spread seems to be pretty low currently relative to the past several years. I am going to look into the fundamentals on it this weekend and form a little better opinion on it.
  150. Long soybean/ short wheat or the contrary? Fundamentally it is hard to be long soy/short wheat at these levels...
  151. Free or monthly subscription?
  152. Yeah, I meant long soybeans short wheat. I saw the trade on seasonalgo, but haven't really looked into it. The main thing that caught my eye was just the performance over the past several years. It seemed to be at a low towards the end of January for the past 4 or 5 years in a row before really starting to move up. I need to look into it though. Planning to work on that tonight.
  153. Getting a little bit of heat here. I have to be more patient sometimes. On liquid stuff you'd better leave a non marketable limit order and wait for noise to get a fill...Thinking about averaging down here , something is really unusual with the curve...

  154. Hows corn ?any thoughts on the H_N spread?
  155. I was debating on averaging down on this one also. The only thing that made me hesitant was I believe it has gone a decent amount further than where we are at now before, I wouldn't want to average in too early and see it go to 10. Idk I'm going to watch it some today and might add to it also.
  156. Averaged in on the ZM fly at 7.2 so avg cost at 6.4.

    I was also in the KW/ZW wheat spread from 35.5. I regrettably got shaken out at 38.75 though. I noticed several of these spreads had sold off towards the end of january for some reason, so I was thinking I could get out and attempt to get in at a lower price. What I didn't realize until afterwards was I got out after it had already moved down like 6 or 7 pts, so that probably WAS the move down and I essentially exited at the bottom. Regardless, still a profit. I think I will enter tonight if it is at a decent price. Shouldn't let missing a few points keep me out of the rest of the move.

    These are a few of the spreads I am looking at:

    Looking at a few more, but those are the ones at the top of my watchlist currently.

    Anybody else in either of those three or have a take on them they care to share?
  157. Just looked at it. Nothing special...What do you think?
  158. I am going to chalk that up to a lucky call lol, I am still not back in yet though. I don't have a pending order so will need to wait until I get home tonight because I don't want to leg in from my phone if I do enter again.

    The July/Dec wheat spread is a little cheaper today I believe, I am following along with it and the soybean spread. Not so confident on the soybean/wheat spread which I was considering. I need to learn more and get a better understanding on it because it seems to make some significant moves.
  159. Thought Corn might have caught a bid here...but nmind I dont think its good risk reward.
  160. Fundamentally long soybeans / short wheat is really risky. Wheat has a bigger potential supply risk( Ukraine, Winterkill, less acreage ) and it is oversold technically.
  161. Yeah, that is a very good point. If I take that one, I will only enter if the market pulls back more. Still thinking on it, lots to learn!
  162. Question, looking at soybeans, the July/August spread is almost completely flat. Am I correct in saying in a perfect world, if you bought July and sold August there should be a low risk that the spread will drop much in value because July shouldn't sell for less than August minus the cost of carry for a month?

    I found a chart online that looks like it put the cost of carry at around 5pts or $250 for a month of storage. Not sure if that is accurate or not, but that would mean the spread shouldn't go too far past the -5 area, right?

    I'm showing 2006 and 2007 as being the only years in the past 10 that buying around 0 hasn't proven at least mildly profitable
  163. A lot of AG markets have futures carry well below the cost of carry even when stocks are heavy
    Andon the last years, soybean futures carry went down all along the season (maybe because exports were above expectations with really tight stocks)
  164. Yeah, that is a good point. I figured there would be reasons as to why it would go past that level but wasn't sure what would cause it to go very far past the cost of carry. I put on a single spread at 1/2 last night. If it goes against me or stays flat for long I will just close it out.

    Still haven't entered back into the KW/ZW spread, but following it closely.
  165. Out @ 1.65. Had a target higher but there was some big sell sizes showing in the book...:)
  166. What are your thoughts on the KW/ZW spread at this level? Not sure if this is a good buying opportunity, or a sign that the spread probably won't widen much from here.

    Glad I did the Fly on ZM like you suggested and not just short the front spread like I originally considered. That would have been a decent hit.
  167. Place a buy @ 31 2/8 on KW/ZW. It should be a good entry.:)
  168. How about 32.25 lol I am on my phone and had to leg into it.
  169. Scratch @-0.1. I knew right when I got filled it was a stupid one. Solely based on seasonals with no consideration for the current situation.
  170. I just bought KW/ZW at 33
    I feel that quality wheat is lacking this year and FSU internal war is also bullish for quality
  171. I traded out then back in to the KW/ZW spread this morning. Closed the ZW short while it was down and then entered again when it moved back up a bit. Didn't accomplish as much as I hoped but nonetheless reduced my cost by a little bit on the spread.
  172. I exited KW/ZW. Closed KW at 562 and then held ZW a little longer and closed it at 526 for a couple point gain. It might continue down not sure. I planned to just put KW back on once it dropped some, but I had a limit order on ZW that filled before then so am flat currently. Will probably put the whole spread back on shortly.
  173. Kw is so weak. Seasonals don't seem to be kicking in and also it's a severe downtrend for KW/W trade.
  174. I entered @ 34. We are @ 33 2/8. I see no reason to exit before 25 support is broken.
  175. Gotcha.

    Some guys here spreaded MW/W instead. That seems to be doing a little better.

    Anyway I dont think the Russian situation will have much impact. Physical trader told me 80% of all wheat in Russia has already been marketed.
  176. Apparently, hard red winter wheat doesn't attract exports this year. Some buyers are switching to spring wheats. And Soft wheat has less acreage. It may explain the current oversold situation of KW...
  177. Yep, Soft Hard is the only US wheat to get good exports but world is still lacking quality wheat so maybe there is till some room on the upside
  178. Kansas getting hammered again.
  179. Damn...I just did something utterly stupid here. I used ZC Mar instead of May in my combo selection when checking the position and thought my target had been reached. When I realized it i had already sold LEQ5...So I just exited @ -5410$ margin...:confused: Still a good trade but I think the move isn't finished.
  180. You legged out manually? What platform are u using?
  181. TT non pro.
  182. Nothing related, but am I the only one to find january extremely dull? I think I made half my usual volume...
  183. I have to say I don't like KW breaking 6 month lows ...
  184. Long May / Short Jul Orange Juice @ -0.4. Pretty much the same little bull spread as Mar/May. A little trend is already in place.
  185. I have traded more products than ever this month LOL not necessarily more volume though, but nothing has really been going that great. No big losers and no big winners. But on the plus side I have been losing money slower when I do and starting to somewhat turn around.

    Are you still riding soymeal? I have debated on closing out if the opportunity is there when it is in the lower -5 area then trying to enter again higher because it seems to be ranging somewhat. Cost is like -6.3 on it I think

    I tried the wheat trade again, but got stopped out for a $100ish loss. Still up overall for the idea with 2 winners and 1 loser. Today wasn't a very good trade really anyways, I was hesitant because the setup wasn't too great but took it anyways. Oh well, learning from mistakes so it's all good.
  186. Of course I am still in. If I had exited I would have posted it. My target is much lower. I have a longer term view.
  187. Yeah, I was planning to hold longer term also, just was thinking about getting out and trying to get back in a little higher. I doubt I will though since its 4 legs of transaction costs plus risking the spread as well. I am just sitting in it for now.
  188. They just won't stop killing it.
  189. This fly is so weird. Sometimes it loses value when ZMH goes up and gains when it's down. It pretty much means May has greater volatility than March while March is the front month in a "deeply" inverted market... If I happen to finally make money on this one, there is a good amount of luck involved...:confused:
  190. Error.
  191. Yeah, I had on two and closed one out yesterday at about 5.4 I think. Definitely agree on it behaving weird lol
  192. kansas is bouncing back. Yesterday the spread was quite stable after the wheat complex sell off, prob the bottom?
  193. Probably. At one point I was thinking about spreading it with London Feed wheat.
  194. different wheat qualities, different markets, low market liquidity, hedging currency ...
    do you really trade this spread?
  195. I have never traded it. I was just looking at it because when you look at a "stacked" chart with all kind of wheats, it wasn't oversold as ZW and KW are...
  196. it is better to stay away from London wheat futures, unless you're required to because you are involved with physical UK wheat. Just my opinion.
  197. Didn't want to miss the train and entered too early... Now you get the really good level @ -1...A good support from october and December and the start of the seasonal window is monday.
  198. Long Mar/ Short Apr Class 3 Milk @ -0.09.
  199. Wow, got filled at 3.5 this morning on ZM. I've had an order just sitting there so I can see what it is trading at when on m phone. Wasn't expecting that. I'm flat for now.
  200. FCX, was that a soy meal trade? Where did you get filled at? I have been watching the soy meal fairly closely here. Got out of a march vertical put spread at a small profit on the hard break this morning.
  201. Yep it was.

    My fill was:


    I actually was following Tradator on this one and planned to hold for more but didn't realize how much it was moving and an order I just had sitting out there got hit. Was a nice surprise to see that it hit and locked in some profit.
  202. Gotcha, thanks.
  203. Short Aug/Long Nov Feeders @ 3.975
  204. Any thoughts on the Live Cattle April/June spread? Interesting looking chart.
  205. I am also in this trade. I feel that front month should keep going up. Any idea of fundamentals behind this backwardation ?
  206. Why ?
    Few big traders moving the markets ?
    I dont see how you can win money by moving a market outside the fundamentals. The only good reason I can think of, is when the pricing of some big volumes are based on the pricing of london wheat futures.
  207. no liquidity.
  208. Then, it is question of size, I am small enough to not suffer from this lack of liquidity !
  209. it is probably a good news for you.
  210. Short Sep/long Dec Chicago Wheat @ -12.5 on seasonals.
  211. I am going to get back into the ZM fly. I have my order placed at -5.2
  212. Any Idea why contango is not sot high in corn, wheat and even in backwardation in soybean with prices so low.
    If we come back fee years ago, such prices would have produce a massive contango !
  213. Big rally in the grains today, lower dollar, etc. Is this a trend change or a blip on the screen?
  214. Hell of a busy day. Forgot to add, i shorted the july/oct spread in sugar today.
  215. demand for ethanol has been strong campaign so far. current
    indeed! i'm personally not sure crude bottomed. nor am i convinced the Greek debt issue is behind. just some thoughts.
  216. Interesting one. The only downside is that the carry is already important. Have you got some special fundamental catalyst besides seasonality ?
  217. Yeah it's partially seasonal and July supposedly reflects the buildup of new crop, 2nd reason was in the previous recent rally, we were told there were very few cash buyers at those levels, and when it dropped, the phones started ringing again. Cash premiums are still very weak in Brazil for this time of the year.
  218. I will perhaps follow you. Didn't you say in a previous post some of the guys in your office were getting long sugar?
  219. yeah but most aren't long anymore, when the cash buyers stopped buying at those levels, they also got out of their futures position. I think a few guys did get hurt by that huge move down tho 2 weeks ago.

    Anyway, yeah just keep bouncing those ag ideas around
  220. Short DEC15/Long OCT15 White Sugar Londres
    On seasonality and high backwardation !
  221. I know some of you are trading soy meal already. I have been playing around with R and some really basic quant ideas. I was looking at the ZMH - ZMN spread yesterday. It looks like that spread is mean reverting. The second standard deviation is around $11.8, with the mean around $7.8. Yesterday would have provided a great chance to get short, but I failed to get on it. This morning, our news service in the office is saying they think those soy meal spreads will eventually return to carry. Those spreads would need to take out the lower end of the ranges that they are in though. Should be interesting to see what happens.
  222. You meant contango? How did you test seasonality on W?
  223. It makes sense. Hope it breaks before March expiry...What news service are we talking about?
  224. Ag Resources out of Chicago. They noted that on the Tuesday rally, the spread traded out to a $8 premium. A year prior, the March to May spread traded as high as a $20 per ton before going down to a $5 premium near expiration. The Jan/March 2015 spread closed at a -$6.60 discount in really volatile trading before expiration, with basically all of the move happening on the last day. They say they think that the Mar/May spread will close negative with a large soy crop and discounted meal out of South America. I have seen them be pretty wrong before, but the fundamentals definitely seem to point to lower soy meal prices.
  225. https://agresource.com/

    Are you happy about it? Sometimes I feel I should subscribe to real time ag news service...
  226. You know, they have great fundamental information. For example, they give pretty good info before USDA reports, and on South American weather. However, I do think they underestimate the impact of funds trading on the ag markets. I remember during some heady ZS rallies last year that they kept calling for seasonal tops on a daily basis, and we would inevitably get a 25 to 30 cent rally. But, there are plenty of times when the markets seem to flat out ignore the longer term fundamentals.
  227. I am looking for a basic ag newswire with no commentary, just:

    "12:03 Russian ag minister instates tariffs on corn from January 20th"
    "13:45 GASC purchases X cargos of french and romanian wheat"

    Somebody knows a good one?
  228. I agree for outrights...
  229. Tradator, I followed you on the Sep/Dec wheat trade as well. I am back in ZM also at about the 5.1.

    I bought the 550 call on KW last week but of course sold it early, I have GOT to work on thinking longer term. Would have been quite a nice winner.
  230. This one is really long term, to be closed this spring/summer near full carry. You have to follow the variable storage rate on wheat.
  231. In a committed effort to work on holding stuff for longer, I will do the same also. And not to mention it uses hardly any margin. I just have on 2 for now.
  232. Best trade from a long time
    Long Euronext wheat MAY15 - Short CBOT Wheat around 20 €/t
    Because Europe is exporting really fast (1.6 Mt of export certificate last month)
    Because Senalia (Rouen storage operator) send a mail saying that they will open saturday to face the wheat loading in next months
    Because US exports path is kind of slow
  233. Wheat Carry
  234. Thanks for posting that, I have access to a terminal through school, I need to put it to use on this stuff.
  235. Is it pretty normal for wheat to trade this far away from full carry in the first few expirations?
  236. Here it is. -5000$. It would have been my exit without this stupid mistake. I think there is not much left on the upside.
  237. Greenie, what is your platform? I would love to get all my spread displayed as % of full carry...I need to use a spreadsheet every time.
  238. Bloomberg. For execution, I mostly just use BB tradebook.
  239. Bloomberg. That's what it looks like to be a pro...:)
  240. I am out of KW/ZW spread @ 34( scratch ). Previous september low on ZW is turning into a support while it is becoming a resistance on KW...Plus the end of the seasonal window hasn't been profitable over the last 5 years. Perhaps I am not giving enough credit to the support zone on the spread but this last leg down was too much for me...
  241. TraDaTor, which months were you in again on that spread? I looked back a couple of pages, but didn't find it.

    Getting a small pop in the grains today before the Feb. WASDE report tomorrow. People seem to be expecting some bullish soybean news, in terms of reduced carry out and lower production in Brazil. Should be an interesting one.
  242. I was in March. I am pretty sure I posted it somewhere.

    If there is bullish soy news tomorrow it is definitely bad for my soymeal fly...Are you talking about rumors you heard or articles you read?
  243. Short Sep/Long Dec Cocoa @ 18. The front of the curve is getting flat plus there is a strong seasonal tendency on this one.
  244. Here is what our mid-day grain update is saying:

    AgRural reduced its Brazil soy production estimate to 91.9 mmt vs. 95.0 previous, yield estimates were lowered from 50.3 bags/hectare to 48.6. This compares to last year's record crop of 86.7 mmt.

    In tomorrow's report, the avg. est. for the US soybean carryout is 398 mb vs. 410 mb last month. Strong export and crush demand are the likely reasons why. World soybean carryout is est. at 90.44 mmt vs. 90.78 last month.

    Maybe this morning's pop already built that news in? Buy the rumor, sell the news?
  245. FWIW Just checked a few articles ( DTN/Darin Newsom,Steiner Consulting, Benson Quinn Commodities/Brian Henry )on tomorrow Brazil production and they all say it should be downgraded but the crop is still record large so...
  246. Do any of you all trade the spreads for a year or more out very much? Looking at that bloomberg screenshot, some of those spreads seem like they might have some opportunity. I know those are based on the last trade, so might not actually be quite as it appears but nonetheless.

    Just reading more into the carry and everything, trying to figure out what are potential opportunities and what are bad ideas.
  247. Yes. I posted some further spreads. You can't really trade many contracts so I don't know if it is worth the effort. I try to post mostly "liquid" trades here...
  248. Yeah, completely understand.

    I believe I recall seeing somebody post about hogs on here awhile back, have any of you all been trading the April/May spread in recent years? Seems to have been quite consistent if entered a little later in the year and held until near expiration. Could anybody explain the fundamental reasoning behind these? They seem quite consistent recently.

    Edit (found the post on trading hogs):
  249. No major surprises with the WASDE report, from what I could see. What are everyones' thoughts moving forward?
  250. Rangebound, fundamentally driven ag markets. Good for seasonality but lower volatility. At the same time, the markets are a scarier place( oil drop, CHF crap ...) so more business need to hedge. Commercial hedging volume higher.
  251. Are you still in? The front month is getting inverted...
  252. Entered ZSN15-ZWN15 @ 467.25. I think soybeans will outperform wheat as well as the seasonality at play also.

  253. Flat, locked in at +5 3/4pts. I started second guessing myself on the spread a bit and wanted to lock in the gain.

    Now, I feel like I need to look back into the spread a bit more and reconsider, so thinking out loud here and open to input. Tradator pointed out to me they are not well correlated, so I guess in the event of a major news spike there would be some hedging affect, but ultimately not well correlated. ZS is nearly twice the size of ZN also. But I was doing it as a 1:1 so something to consider.

    As of the past few years wheat has seemed to sell off typically over the next few months, where soybeans has moved up. So if that holds true then definitely a good factor in favor of the trade. I'm not sure. I'm going to look into things more tonight and reevaluate everything before entering again. Happy with locking in those profits for now though!
  254. Yeap still in.. it's okay. About 5-6 points out of the money. The front month wasn't ramped up that much, its the mar-may spread that is being squeezed. Someone intends to be long sugar at delivery pretty bad.
  255. I have quite the same problem with my ZW U/Z as the spread is already @ 70% full carry while the front month is getting inverted. I am in the green though...
  256. Damned, why the MAR/MAY ZW is in backwardation ? There is a lof wheat in US and they dont export much !
  257. You have to check on CME website what are the leg weightings to get SPAN intercommodity credits
  258. That's a great article, TraD. I also read that article on the Chinese soybean trade, which was fascinating. I continue to play around w/ soybean prices in R. Like TraD said, the beans are stuck in a range bound trading pattern. I have attached an hourly graph of ZSK prices, with the mean, and one and two standard deviations shown. It's a little crude, but it shows how exact the price action is w/ regard to the standard deviations.
  259. Thanks, I will take a look and see. It pulled back a bit but is starting to move again now
  260. Just put on a trade thinking that we are on the upper end of that soybean trading range, and we could head back down to the lower end. Did a 10.30 to 10.80 vertical call credit spread for around 7.5 cents, then bought the 940 call for around 5 cents. The strong volume has me a little on edge, but we are also getting near option expiration for March options, with a 3 day weekend.
  261. Out @ 0.41:)
  262. Had some bullish ZS data from the USDA yesterday, rallied up pretty strong. Off slightly today, with March options expiration today. Should be interesting to see what happens early next week.
  263. Kicking myself for closing out of the ZW/ZS spread and not reentering on the pullback, up about 25pts since I got out. :(
  264. Scratch @ 49 finally ...LOL. Even 1 week ago I thought it would go down but this USDA lower soy acreages ruined my last hopes. I love to scratch trades lately, but it's not that stupid when you realize your trade is becoming a gamble...Look at KW/ZW now...
  265. Yeah, soy meal is tough right now. Ag resources is saying that Brazilian soymeal is at a $60 per metric ton discount to the U.S., and that it is profitable for those in the southeast near ports to import soy meal from Brazil. Simple supply and demand would seem to dictate there would be at least cash pressure on soy meal, if not on the board. But, that bullish soybean acres number is supporting things for now.
  266. Looking better now:). I think I will enter Jul/oct or a further one soon.
  267. I am getting my ass kicked on OJ K/N... I guess it will be the first loser on this thread( apart from scratches )...
  268. Cool stuff and nice thread here.
    Tradator, which target did you get when entering this trade ?
  269. Target or entry price? I entered @ -0.4 looking for a move to around 2, but no Florida freeze finally, not even usual seasonality. Just big bad head § shoulders against me...:(
  270. Brazilian trucker strike blew the top out of this bean market. Once again, the cash basis does not seem to be following. The fundamentals still appear bearish, but w/ no one to sell into the rally, it could keep going here.
  271. Yep. Good day scalping ZS and ZM.
  272. Here it is. Exited all lots except 1 @-1.5. No need to stay here. It can go much lower.
  273. As you say it can go much lower, it's based on TA or something else ? Thanks for sharing anyway, I'm newbie :)
  274. The exit on TA. The entry on seasonality and TA. The cold snap in late january gave me hope too...
  275. Short Jun Live Cattle / Long Jun Hogs @ 58. Seasonal window + Range broken to the downside + Series of bearish cattle/ Bullish hogs news( West coast ports strike finished, Morgan Stanley on Cattle, herd rebuild...)
  276. It has definitely made a quick run up in the past week
  277. The boss where I work thinks long April Live Cattle, short June Live Cattle is the way to go right now. Feb Live cattle comes off the board tomorrow. The cash trade is hanging in around $160 w/ the feedlots and packers. LEJ is at $149, about 11 below the cash trade. I like the idea, 'cause we had a similar gap last month with the feeder cattle. I don't like how that spread chart looks though.
  278. I have to say I like it. I will perform due study tonight and perhaps place an order. Thanks.:)
  279. Finally there are a few things I don't like here. First, at 6.5 the spread is already historically rich and second, Cattle is not like most markets where the front month overperforms deferreds in a rally( in case it goes up to reach cash prices ). If you look at the big bull market last year, June15 overperformed April15 from September to November high and then the spread widened again in early 2015 bear correction...Counterintuitive. Just my 2 cents. I never use cash prices to trade so I really don't know.Perhaps the imminence of April deliveries will drag April faster...:)
  280. If there is a cash induced rally, it is bad for my long hogs/short cattle spread though. I have to incorporate cash prices in my trading.;)
  281. What is happening to Cotton 15 crop? I thought the acreage was more than expected...?
  282. Long May/Short Jul15 Oats @-2.25. Simple propagation of what's happening in the front month/cash. Didn't get half the size I wanted though.
  283. Soybeans taking some off today after a strong rally last week based on the Brazil strike. Still tough to say whether that is having any substantial impact on the Brazil harvest.
  284. Yeah -72 now. Still holding it.
  285. Yes I placed an order but didn't get a fill:(
  286. I read somewhere that indeed people must keep in mind that the brazilian harvest is still huge and the strike is only a logistical issue.

    Did you take the Cattle Apr/Jun trade? I regretted not taking it this week end. There is less edge now, April closer to cash...
  287. The reasoning behind that is anticipating April to pull towards spot more strongly than June, causing the spread to grow, right?
  288. You know, that spread is a weird one. It did make a move up, but is somewhat stalled out around $8. My very incomplete quantitative analysis of that spread seems to indicate that the spread is somewhat mean reverting. I wouldn't be surprised to see a pullback to around $7.30 or so. If it did get down to $6.60, might be a good entry point to play it even back up to the top side of the range.
  289. Are any of you all following the Feeder Cattle/Live cattle spreads? Kind of surprising to see how far off some of the spreads are from the prior 2 years data.

    I am seeing some possibilities for mean reversion trades. The spreads do seem pretty far off from historical data for the past few years though.

  290. FCX, you got it right. The cash trade between the packers and the feedlots was around $159 to $160, a premium of around $8 to the LEJ contract. That gap narrowed today on the around $2 rise in the futures. There was a huge gap between the front month on the feeder cattle contract and the feeder index in January. It looked almost too good to be true, and although the spread was volatile as the contract went towards expiration, there was some money to be had there. Thus, we have been paying attention more to these spreads.
  291. Long Jul/Short Aug soymeal @ 1.4. Resistance turned support + Seasonals + Brazil strike...The target should be lower than recent history though as soy supply is plentiful.
  292. Greenie, what do you think about cocoa right now as you seem to be focused on softs?
  293. If i had to trade it, I like the N-U spread as a short but I think there are better opportunities. I do have a few other trades going on, short the sep-dec wheat spread for one and some livestock spreads. Was also looking at going long meal july outright. I see that you are already in it.
  294. I am just wondering what cocoa outrights will do in 2015 after the recent bullish turn...I am already short Sep/Dec and looking at further spreads...

    I am short Sep/Dec wheat as well like you, I posted it somewhere.
  295. Out @ 1.25/1.5.:)
  296. Tradator, I followed you on the soymeal spread. Looked into it some lastnight and liked it so I entered as well. I got in at 1.4 also. I didn't expect an immediate fill because the spread showed 1.3/1.5 but it immediately filled so worked for me.

    On the Sept/Dec wheat spread you all are discussing, to confirm I am thinking correctly on both of your reasoning: You are anticipating Sept to pull down to spot more strongly than Dec and to go to full carry, right?

    Hope you all don't mind confirming these things. I just want to make sure I truly am understanding the plays.
  297. Actually, just realized I was in that trade and we discussed it a couple weeks ago. I can't remember why, but I exited it.

    Fully carry on it is somewhere around 18, right?
  298. Yes. To full carry. And then to the new full carry;)
  299. Well... I failed on my "committed effort" lol. Pt 2...recommitting! I will take a look and see if I can get a decent price on the spread. If so I might enter again.
  300. LEJ - LEM pulled back a bit to around $7.42 today. Not sure where it really goes from here. I know this is an ag trade idea forum, but I really like shorting the April heating oil contract, long the May. About $250 in margin to hold. It exploded last week on the cold weather on the East Coast, pulled back, and is popping some today. There is some support around .026, but if it breaks that, could easily go to .016.
  301. Have you looked into HO vs RB? I was looking at that lastnight, seems like there might be some seasonal trade potential there. I haven't looked into it very far though. Also have been looking into the HO spreads as well but haven't decided to execute on anything.

    EDIT: I just checked the spread on IB, I'm not sure what the CME requires but the margin requirement showed over $3,000 through IB.
  302. FWIW I find the curve of cotton really odd right now. I don't know why low inventories would invert 2015 Crop( Dec15 to Jul16 ). As a result I went long +Jul/-2Dec15/+Jul16 @ -1.32( the 10 lots @ 0.50 on Dec/Jul16 was me ). I know it is not liquid but worth noting.
  303. Nice day here:)

    Just to know, I shorted it on nothing more than a strong seasonal tendency and a feeling that 2015 crop condition would be "normal"... Did you have other catalists for the trade?
  304. I still had my order sitting there lol, missed that move on wheat
  305. FWIW I think it is too late now. Too close to full carry.
  306. Yeah, I agree. I looked at it this morning and decided it probably wasn't worth it anymore
  307. That HO spread is coming off, just broke through the support around .025. Not the best feeling when you watch a trade go your way that you didn't put on. FCX, did you get $3k for the margin on that April-May HO spread, or was that HO v. RB? I used the CME Core Margin calculator, that's what gave me $250 in margin.
  308. I'm showing April May on HO as about $2,500 initial and $1,900 maintenance.
  309. FCX: You are correct, I was incorrectly using the Platts heating oil contract in the margin system.
  310. I am in with a different one. Short Jul/ Long May 16 @ -1.77.
  311. Out @ 17. We are running at 90% of full carry. Given we currently are at 65% on front spread( May/Jul) the chances of carrying charges increasing at the end of May are quite low so the reward is not worth the risk of holding longer. Greenie tell me if I am wrong.;)
  312. The LEJ - LEM spread is breaking out above the resistance around $8 now. Should be interesting to see what happens with it today.
  313. I don't know why I didn't like it the other day...LOL. I placed an order in case it pulls back a little.
  314. It is somewhat high compared to normal levels isn't it?
  315. Yes. But Cattle hasn't been "normal" in a while.
  316. That spread was range bound from 6.60 to 8.00 for the past month or so. I think it could be headed to 9.00 or so. Might get a pullback to around 8.00. There is some decent volume in it for a cattle spread.

    That heating oil spread has come off to around .016 or so, pretty close to my price target. I was way off on the margin requirement, but called the move right ;)
  317. Very good point
  318. Good call! Did you see the shift in the crude spreads yesterday? I had some July/Aug/Sept flys on and they got a significant move for the day. I think it was about .10 or. It came down to about .12 from .30 like a week ago. I missed the second leg down and got out around .17, but still pleased nonetheless for a .24 avg entry on several.
  319. Cattle/Hogs spread is pretty relentless.
  320. I know I mentioned it the other day but take a look at the feeder/live cattle spreads, I wrote down a paper long to test out something new on 2GFQ15-3LEQ15 on 3/2 at -25. It has really bounced nicely to . That price will show up differently in IB, think it just depends how it is quoted since its a $500 vs a $400 pt contract. I used barchart, but its getting quite a bit of movement it seems like
  321. Yes . I am getting killed. LOL.

    Are you out of the wheat sep/dec spread?
  322. Not yet....feel like getting out though, can always re-enter later. huge resistance here obviously.
  323. Long @ 8. It's kind of a hedge for my cattle/hogs spread as well.
  324. I don't really trade flys that much, but I see you guys talking about them. May have to start following them more. That cattle spread is getting hammered right now, down to around $7.57, whew. Not sure if I would want to touch it now.
  325. :(Pretty bad close for all my spreads.
  326. Oh man, I feel your pain on that cattle spread. That was a violent pullback.
  327. Oh well...I am not sure it won't work in the end. I will give it some room. :)
  328. Side note: Contango made a decent move again today on crude by the way back in other direction, just wanted to throw it out there if you all have any interest in the flys. July/Aug/Sept or Aug/Sept/Oct both seem pretty far out of whack again.

    I am going to keep following this feeder/live cattle spread will post the next call and see how it does
  329. Cattle/hogs going to infinity? Everyday is up.
  330. How's it going today for everyone? USDA March WASDE report out tomorrow. Repositioning today before the report?
  331. Prospective plantings at the end of the month should be more interesting. I don't know if there will be much action tomorrow...

    Have you seen cash cattle around 163$? Do you know what it means exactly when they say x "in the South" and y "in the north" ? I don't know much about cash markets.
  332. Any stop on this?
  333. You mean for Cattle/Hogs ? Yes around 71. For Cattle Apr/Jun, we are around my entry point...
  334. Yeah, I saw that LEJ-LEM spread come back this morning. That range is pretty strong. It may take the futures chasing the cash to pop out of that range.

    TraD: I'm not an expert, but I can tell you what I know. Cash trade is pretty localized from the feedlots to the packers/slaughterers. Thus, you can get different cattle trade prices in Texas vs. Nebraska, i.e. south vs. north. Although offers are being made early on in the week, trade doesn't usually happen until Thursday or Friday. It sounds like feedlots are starting the week at $163, after a strong futures performance last week. That number will likely adjust based upon the futures price as the week goes on. Sometimes it seems like the cash leads the futures, other times the futures lead the cash. Watch and see how it develops as the week goes on.
  335. Thanks. The difference between South and north is around 100$ so I thought there was something more than just a cash difference due to plenty of supply in Texas and less in Illinois or something...Plus "north" and "South" is not precise enough in my mind...LOL
  336. I don't know the reason behind that really Tradator, but I do have a couple friends here in TN essentially doing arbitrage on that lol but there is still risk. They either buy a large trailer load here in TN and drive to New York and sell them or the opposite. They wait until there is a decent difference in prices of course and so far have been pretty successful.

    My friend told me it is because there are significantly fewer sale barns in the north, but I am not sure on that exactly. In the south we are more impacted by dry weather also I would say. Hot dry summer usually means lower prices around here because so many people start selling.
  337. TraD: Maybe I am not understanding what you are asking. For example, last week cattle traded in Kansas for $161.50. You might see a $1 to $2 difference in other areas, but not a $100 dollar difference. There is also the price of the cutout, which is somewhere around $250. That is essentially the carcass once the animal has been slaughtered, so those prices move differently. That may be what you are seeing. Let me know if that helps.
  338. Here is an excerpt from DTN news feed I receive :
    "Asking prices are undeveloped but likely to start near $163
    and higher in the South and $262 and higher in the North"
  339. That must be a typo or they are referring to feeder, no way there is a $100 difference. If so I will be driving to the sale barn immediately to load up with some cows to drive up north LOL.

    Google a state and then cattle sale barn prices. You should be able to find data on their recent auctions. Here is a link for TN. Not all of them detail weight with the price (just total price), but most should I believe.

    http://www.tn.gov/agriculture/marketing/cattlesales6.shtml here is TN

    I have only skimmed this report, but you might find it beneficial for looking at several states. As of 3/6/15:


    In other products, that ZM spread is doing nice today!

    Edit (this is like my 20th edit to this post), I just checked that posting you referenced and have seen them do that multiple times. Every mention of North/South there seems to be a significant difference between the two. SO I have no clue to be honest.
  340. Yeah, that is definitely a typo.
  341. Ok last post on this lol, couldn't figure out wtf the deal was but I think this explains it..

    "What’s left of the cash cattle market has traded lower this week at $160 in the south with the north at $255-258 dressed before today" so for whatever reason they just say north (probably the location of most slaughterhouses), but that price is for dressed meat.
  342. Yeah. That's what I was thinking but I didn't want to sound stupid.:rolleyes:
  343. Yeah, I briefly got very excited thinking I was about to rent a semi and livestock trailer and start driving cows up north haha
  344. Ok, so it was the cutout price. It was hard to discern that from the language used in the news bit.
  345. Any thoughts before the WASDE report this morning?
  346. I have no idea, I just hope it is positive news for this soymeal spread haha. That is all I am in currently in the ags.

    Are you out of that wheat carry trade now?
  347. Short May White Sugar / Long May Sugar 11 @ 28.38 ratio on correlation.
  348. If you are asking me, here was my exit.
  349. Wheat just got a nice little boost from being down.
    Question for you all in regards to wheat,
    am I wrong or is this saying there is significant upside potential to wheat right now? And, am I correct in assuming those price estimates apply to September or the December contract
  350. Lowered US and World carryout on corn couldn't push the market higher. Lowered those carryouts by around 2.5% or so, and we couldn't even sustain a 2 or 3 cent pop. Corn is so range bound right now, unreal.
  351. Trad: You still in that cattle spread? I see it's breaking out today.
  352. Yes. :)

    But I am also closer to my stop on cattle/hogs...It's the last time I trade one of those interproduct spreads. I hate them...It's really just 2 independent outrights.

    KW/ZW or ZS/ZM is fine but not ZC/ZW, LE/HE...
  353. Tradator or futurestrader, do either of you two have any thoughts on wheat? I'm thinking about going long outright or with a call/option spread on the Sept or December contract. Seems to be a good bit of upside potential.

    Edit: no I'm not. Outrights have done nothing but reduce my account balance the past few months. Never mind lol changed my mind.
  354. Wheat is confusing to me right now. I look at that chart and can't tell much of anything. We've come off a lot from those Russia/Ukraine rallies, and it would make sense that we are getting some kind of a bottom. There is a ton of wheat out there, and the weather seems like it was pretty good with not a lot of winter kill from what I am hearing.
  355. Yeah, I am not going to mess with an outright. Too much risk given my account.

    Are you or tradator looking at putting the september/december wheat spread back on now that it has moved away from full carry again? Last I looked it was around 14 or 15.

    Also, the QUV CL fly I mentioned the other day I locked in a .07 profit on. I only had a tiny position, but nonetheless decent profit for a fly in only a few days. Lots of interesting things taking place with all that. I know you have mentioned energies a few times so just thought I would share. Might be worth taking a look at if they move back further negative again.
  356. gone wacko again today. Everyday is up............
  357. Out @ 69.6 finally.:(
  358. No I don't think so...
  359. I thought your stop was at 71?
  360. Out @ +0.07.:)
  361. Yep. But I decided it wasn't worth waiting to lose a bit more...LOL. I exited because of the double bottom on cattle outrights.
  362. It seems a bad idea to me, OCT14/OCT14 went up near the expiry and didnt stop !
    I feel that most of the time convergence is not working weel in nearby expiries
  363. US Wheat is currently so expensive compared to other origins, thats clearly a big bearish factor !
    However, I feel that the market is relaxed concerning Ukraine/Russia markets !
  364. Indeed... I did a little statistical study and you are right. I traded just because the change in ratio was so abrupt but there have been similar occurrences in the past. I still think I have a little edge but perhaps I will exit soon...In any case before April...
  365. Lots of red in the ag today. Feeder cattle down hard. Soybeans giving back from their recent rally.
  366. That's how I know I have a good trade with your LE Apr/Jun. Even when outrights go down, it breakevens or goes up...Same thing with ZM Jul/Aug...:)
  367. Yeah, that cattle spread has held together despite the volatility today. Knocked off around $9.40 though. Should be interesting to see what happens next week.
  368. I'm wondering if that sept/dec wheat trade is going to come back closer to carry again.

    Feeder/Live cattle I am watching both April and August to see if it will pullback some from this recent run up.
  369. I am curious about Feeders/fats too going into spring? What's your take, guys?
  370. Here's an excerpt from a cattle update, take it for what it is:


    - Cattle trade waited until Friday to get going as packers resisted paying up for cattle and feedlots held for higher money. By the end of the day, it looked like trade was very light at mostly steady money in the south, and steady to up $1.00 in the north. Volumes were light enough in all locations that we hesitate to even call a trend. Only about 5 thsd head traded in the south at mostly $161.00 live. In the north, live trade ranged $161.00-$163.50 live and $258-$260 dressed. With kill/cut margins back in the red, packers were determined not to pay up in most cases. Many feedlots resisted the steady bids; however, noting that cattle numbers are tightening and the best demand of the year is just ahead of the market. Packers reduced slaughter sharply last week after margins fell back down into the red. Slaughter was just 524 thsd head, 13 thsd head fewer than the previous week and down 8.7% from the same week last year. Continued heavy cattle weights resulted in beef production that was down just 5.9% from last year.
  371. I don't like that correction on LE Apr/Jun...
  372. -GFQ15/+LEQ15 @ 66.325

    This is a paper trade, just following along to learn this spread better. I am thinking it will pullback some from the recent run up

    There is a decent possibility it will just pullback slightly and explode right on up more though, so we will see.

  373. Yeah, the LEJ/M hit resistance at $9.40 on Friday. The question is whether that $8.20 area will provide some support.
  374. Seriously I don't what I will do with this one...

    BULL : - It's a retracement on former resistance, hopefully the new support.
    - Cash is still at 6$ premium compared to around 1$ normally, but I haven't done any statistical research on convergence near expiration( I don't have historical cash cattle prices ).

    BEAR: - This downward movement was too strong to be a correction.
    - The spread crashed way more than outrights today( it looks like large positions are rolled )...
  375. Here it is. Scratched( almost ) half of my position here @ 8.150. Now that I am lighter, I will perhaps be able to analyze better ...LOL
  376. Noob question, but how do you get cash prices in LC/LE/FC ?
  377. I get this kind of news on cash trades via DTN Prophet X, but no historical datas of cash prices like for Corn, wheat or even cheese.

    161.00-161.00 161.00-161.00 161.00
    HEIFERS No reportable trade
    STEERS No reportable trade
    HEIFERS NO reportable trade
    Just a handful reported in CO today the rest of feeding country
    was dead quiet.
    5 AREA LV STR AVE PR&WT: $161.29(1424) HIDE & OFFAL: $14.43 Unchg
    CARCASS EQV INDEX CHOICE (600-900#) SELECT (600-900#) #OF HEAD
    LIVE BASED 239.11 234.76 39,059
    BOX BASED 233.26 233.06 51,096
    AVE INDEX 236.19 + .78 233.91 + .87 90,155
    BEEF CUTOUTS CHOICE (600-900#) SELECT (600-900#)
    245.26 +1.14 245.06 + .99
    60.50 LDS CH CUTS / 14.96 LDS SEL CUTS / 4.14 LDS TRIM / 26.12 LDS GROUND
    Hr on mod dem & lt offers
    Week ending 03/13 $246.55 +.91
    CUTTER 90% 350# UP C/O: $231.08 +.39
    NAT'L BONELESS BF TRIM: 65.36 lds / Hr on mod dem & lt offers
    90% TRIM: 28 lds/ WT AVG: $294.98 / Firm/higher
    MON 110 WK AGO 110 YR AGO 116 MIX: FRI SH75/CB21 SAT SH1/CB2


    Week Ending: 02/28/14 11,406 4,748
    Week Ending: 02/21/14 10,717 4,516
    Change from prev week: +689 +232
  378. Grains getting hammered today.
  379. Scratched the rest at my entrypoint ( 8 ). Trading spreads is getting harder lately.:(
  380. ZM started moving up the past day or two, I thought maybe we were about to break out of this recent range, but looks like we might be in it for a little longer.
  381. LOL... Yes.Don't worry. This one is meant to be held until mid June. It can go really wide.
  382. Thanks for the information. Do you like DTN ? I dont even know what they offer !
  383. Yes. Prophet X is best value for ag traders. DTN/DJ Ag newswire, charting with extensive coverage( obscure exchange like SAFEX, cash grain prices ), weather and basis maps, crop condition, Crush and carry calculators... The charts looks like the software was made in the 80s but I love it. I have just been using it for one month now...
  384. Live cattle nearly limit up right now, not sure where that came from. Looks like $8.20 or so is support on the LEJ/M spread.
  385. Cotton curve gone wacko again. It's like outrights move in the front months drive the front of the curve "as is" and less liquid expiries in the back get the actual move in calendars...Dec15/Mar16 is a major sell at 40 if it opens back there...
  386. The front spread is so weak compared to the complex. I don't regret to be out.
  387. Here it is. Almost feels like pure arb. But the problem is that another bull move like yesterday( supposedly strong export sales...? )would result in the same retarded pricing.
  388. Your saying sell December and buy March? I don't have live data for cotton in IB, but just pulled up Barchart and saw March was down .39 compared to .09 in December. The times on the quotes usually don't line up on illiquid stuff though so probably not accurate
  389. Dec Settled 0.24 over March yesterday after a big bull move made it from around-0.4 to +0.4.
  390. I don't know if I want to touch it a second time...It's just too weird at 0.7...There must be something else.
  391. Here it is...On cotton, when you see something retarded, wait a little bit until you think you are in fact the retarded one and, at this exact moment, trade...LOL
  392. Did you end up entering?
  393. No. It s a shame...But I also don't like doing 2 times the same trade...
  394. That is disappointing, I forgot to add that data feed, so I didn't try doing anything with it either. Definitely seemed like a good potential opportunity.

    Do you think it is just where the further out months aren't as liquid, it causes those divergences?
  395. That cattle spread is breaking below the support at $8.20 or so. And the front month is up much closer to the cash after yesterday.
  396. Definitely. There is no reason for Dec/Mar to rise on higher export sales IMO.
  397. Hmm, sounds like I need to add that data feed and start watching some of the less liquid spreads then. That is pretty interesting stuff. I will start paying more attention to the whole curve to better find those opportunities.

    I'm stopping out on that paper trade I posted for feeder/live cattle. Roughly a 2.5pt loss.
  398. Out @ 3. Sep/Dec is oversold compared to the front and back of the curve and there is a major support between 5 and 0. Looking to reenter later but perhaps in the back of the curve.:)
  399. I'm curious as to how all of this moisture will affect North American planting this Spring.
  400. Good god you've got that right. I feel like it hasn't stopped raining for the past 2 weeks where I live.
  401. Here in Europe it has been really dry and warm for 2-3 weeks. March feels like spring so far.
  402. Been dry in the Iowa/Nebraska are as well. Definitely need some moisture here.
  403. Grains have been pretty green Friday and today. Not sure if it's because we are getting close to planting, or if it just the dollar coming off substantially. Cattle have been rallying pretty good here, that LEJ/M spread has picked up 50 cents or so from Friday. What are you guys watching today?
  404. That correction on LE J/M was too nasty to stay in...LOL

    The dollar correction and the lack of moisture for HRW seems the only relevant factors in this little bullishness. All the rest in recent artciles seems like "after-the-fact" explanation...
  405. I have just created a comparative chart of all traded wheats in the world( same currency, same quantity ) and it seems australian wheat( NSW on Sydney futures exchange ) is quite expensive compared to the rest... Does it make sense? Do you know the reason?
  406. I have a buddy that works for a physical grain trading operation, I just sent him a text to see if he has any insight. I tried googling a little but was pretty unsuccessful. How significant of a price difference is it? The stats I found said they export about 80% of their wheat
  407. I think there is no volume on NSW wheat. There is some on the other australian wheat.
    Otherwise, you can have a big difference between wheat future prices because of both the FOB basis and the quality. For instance, CBOT wheat has such an enormous basis to wheat FOB gulf compared to Euronext wheat which is really close to its FOB (5 €/t).
  408. I guess it's the contrary. New South Wales( milling ) Wheat has a bit of volume but Western Australian no.
  409. May NSW wheat would be at 6.47 $ / Bushel if I configured my chart well. Paris milling 5.82$/B.
  410. Yep, you right, and quality is low with "10.5% Protein".
    Paris milling is currently very cheap and Europe is exporting really fast. But 0.63 $/b is not unlikely !
  411. Long Oct/ Short Dec Soymeal @ -0.5 on a curve play. October is intercrop, sometimes at discount, sometimes at premium to dec but this year, the old crop inversion is steep and even Mar-May 16 are lower than Dec15...
  412. I don't know what is happening on white sugar front month, but my "arb" is not as arbish as it looked initially...:eek:
  413. I am much better at exiting than entering it seems. What is funny is I work much more on my entries...
  414. I am literally the complete opposite. I always get out early or way too late lol. I will cut a winner way short or let a winner turn into a loser....i'm working on it though lol.
  415. Corn is quiet today, but it has been making some larger moves recently. I think the 6-week or so period of low volatility in corn is coming to an end. No idea which way it is headed, but I think we will see larger daily moves.
  416. According to the Hightower report, it wouldn't take much crop worries to drive the expected next crop stocks/use ratio from 13% expected to 7%...
  417. Anybody tracking the big reversal in the June/July Hog spread?

  418. U/V @ 35 and Z/F @ 0. Last call for alcohol here...;)
  419. The volume spike is impressive...
  420. That LEM:N15 spread is textbook mean reversion. That spread got out to a standard deviation or 2 away from the mean, and someone jumped in with some decent volume and brought it back. Very interesting.
  421. I'm not really sure what's keeping hogs down. Last I looked, the cattle/hog spread has gone thru the roof.

    I guess the substitution is a sign of a good economy. Meats are more optimistic than the stock market it seems.
  422. Apparently( Common explanation around ) we have an oversupply of hogs at a time when exports are struggling because of the strong dollar. One thing is sure I won't try to catch that bottom a second time...LOL
  423. I was talking to the owner of a feed mill in rural NE, and he had heard that some are worried that the hog market could absolutely fall apart in the middle of 2016. I asked him the reasoning, and he was saying they are predicting a massive oversupply. This is the first I've really heard of this, not really sure as to the reasoning behind it.
  424. Out @ 29.49. Another loser. It went straight to my stop. As Rachmaninov said, those same product spreads based on correlation shouldn't be done in the last month before expiry. Lesson learned.:(
  425. agree. might as well trade outright
  426. USDA planting intentions out tomorrow. Wheat has been volatile over the past couple of days here.
  427. I have a feeling that there is more volatility risk in a bullish soy/ bearish corn acreage scenario. It would actually be a surprise.
  428. Last month are crazy, its begin to be the cash trader game, we cant go in delivery !
  429. Awesome scalps here:)
  430. Whew, did not see that coming on corn. EXCEPT for the weird implied volatility on corn and bean options. Beans had very low implied volatility right before the report, while corn had some built in. It seemed like the market expected a corn move, but thought beans would stay pretty neutral.
  431. A bunch of post-report long old crop/ Short new crop volume sent it back to my entrypoint...Check the curve. If that's not a screaming buy, I don't know what is...

    What do you guys think?
  432. soy_curve.png
  433. What do you all use for tracking the curves in near real time? IB's term structure chart lags behind a day I believe which is kind of annoying. I guess I could build a spreadsheet to download the info into perhaps. I don't mind it being delayed a little, I just don't like getting on at midnight and not being able to see the prior days change in the structure.
  434. I checked the curve and definitely agree that seems a bit out of whack. I have an order sitting there, but I doubt I will get filled on it tonight.
  435. What is this? I thought it was the soybeans curve and you meant ZM V/Z was linked to ZS U/X, but ZS U/X never traded at a carry recently...
  436. I have it real time on DTN Prophet X but IB settlement curves are in fact more useful. Stale quotes on one expiry make real-time completely false...You always have to recheck with previous day settlement. What would be great is one real time curve based on native spreads midpoint but most of the time it is not available...
  437. Hmm, I believe there is a way to connect IB into excel. Maybe it could be charted in there based on the native spreads like you said. I will see if I can figure something out on it
  438. Indeed you can with DDE links but its a pain in the ass to look for every IB contract number to create a "combo"...
  439. Ahh I gotcha, that's a good point
  440. -0.8... It 's like I don't have a clue lately.
  441. Just saw this post and realized my order filled after all. I entered at .05. Wasn't too thrilled I am going to wait for a bit, but I won't let it move much against me before stopping out.
  442. It is the soybean curve according to CQG interface.
  443. So I guess it is the same as Prophet X, intraday it uses stale quotes which results in false curve...
  444. Short Mar/May 16 Cotton @ -0.17 on seasonals
    Short Oct15/Mar16 Soybean oil @ -0.53 on seasonals
    Short May/Jun Milk @ 0 on a curve play.

    On any of those spreads I wasn't able to get even 1/2 of the desired position. I guess they will be good trades...
  445. I wonder why Joe Ross never plugs his seasonals on ET.
  446. I remember there was a journal 10 years ago from someone affiliated with him residing in the Virgin Islands. It was a pretty good journal.
  447. Except for volatile wheat, grain markets are pretty quiet right now. Any thoughts?
  448. I think I want to get into the Feeder Cattle (cash) business. I'll just buy the calves and send them over to the Feeders. Feed prices aren't too speculative with the dollar being strong.

    Not being a farm boy, I'm worried I'll get taken to the cleaners. Anybody got a primer on buying calves?
  449. Lol it depends on how young of calves you are talking. If you mean going and buying some holstein calves for dirt cheap...good luck. It takes a lot of time and effort to succeed with that. I have definitely learned that one the hard way.

    If you are serious, how do you intend to go about the whole process, as in where would you buy the calves etc?
  450. Some feeders offer soup-to-nuts. From calf purchase to marketing the cattle. They expect an upfront capital contribution and a choice between financing your feed, getting a monthly bill, or taking it out from your final sales price.

    Getting my own calves will be the challenge, otherwise they'll give me the runts that can't fatten up easily.
  451. Ah I see, wasn't sure how you were wanting to go about it all. Probably best bet would be to get somebody you know who knows about cattle to help you. Other option is to buy a significant amount at a time. Find somewhere selling 100 calves for example, and you buy half. Go and see them all and make sure they look ok. Then you might get some that aren't as good but overall you should be okay. If you are buying enough, most of the time they are relatively straight forward and will just give you whichever ones they can get on the trailer first. Or at least that has been my experience.

    We bought 30 of 60 one time. As a whole the 60 looked good, so we told them we wanted half. First 30 in the trailer were the ones we took and overall everything worked out just fine.

    Best advice is make friends with somebody who knows what they are doing.
  452. Your advice is very true, unfortunately.

    The feeders (JR Simplot, I think, wanted 75 head minimum. Calves run around $250-$400 from a outside sources but you get your pick. There is additional worry from commodities reports that say that they constantly have negative margins. However, things look promising from my virtual farmhouse.

    I've made some Army buddies who grew up in Farms. I still find it hard to believe that a hay farmer Oklahoma/Arkansas can make 50% return by growing hay. 35 bails an acre with 3-4 cuttings a year? Several have confirmed it (not farmers but children of farmers who left their homes before pop ever showed them the books) The tractor cost will kill you if your not a mechanic who bring to life a 1930s tractor. A new one with bailer is $100,000+. And I guess that 3-4 cuttings a year has an irrigation system or a land blessed with a limitless water source.

    It's either that or a bagel stand in NY. I think I am more qualified for the latter.
  453. Btw, my profit target was hit for some reason though I thought I had a few days left on the move. But the May/Sep differential has moved to an even more extreme Aug/Sep. Wierd reversal/continuation day for the spreads. db is really quiet. I suspect he is very short on the underlying.
  454. The only way to farm without being on a very large scale is buying the equipment used. I don't know any serious farmer who buys brand new equipment unless it is a major operation where he can justify it. My dad always got everything used at auction which I know helped significantly. I believe our tractor is from the 80's but it has held up just fine for quite awhile. It is 4wd and runs great apart from the parking brake not holding lol. He got it for somewhere around $10k.

    If you have good hay you can make quite a bit off of it though. If you fertilize well you can make even more. We doubled our hay production one year just by fertilizing and having decent weather. No watering or anything like that, but we are in TN so it isn't really dry here usually anyways.

    We also used to let somebody else bail for us and he just got to keep a portion of the hay in return. Never sold much though, mainly used it for ourselves.

    An old retired guy that lives near me made a small fortune on hay over about a 5 year span. He had a couple hundred acres, then worked out a deal to lease several hundred more. He put a lot into it to get started, seeded it, fertilizer, weed spray etc, but he managed to get 5 cuttings a year and sold hay to everybody with a pulse. It was very good quality so he made a pretty good bit off of it. He used old beat up tractors for everything and did all the work himself.
  455. I bought 22 holstein calves like 3 years ago for dirt cheap. Probably our hottest summer in a very long time in TN and the guy lied to me about the calves age and them being off the bottle. They were dropping like flies in no time....luckily the remaining ones bulked up enough to cover my costs, so I broke even basically when ignoring the time spent.
  456. Diary is a tough business. You might as well trade the London opening. Weren't farmers dumping milk in the streets a few years ago?

    Anyway, there is a really aggressive buyer in that Aug/Sep Soybean. He was dangling a 1 lot in front of me. Being impatient, I took it. He immediately went thru me and went thru the ask along with my sitting limit orders. It's a thin market.

    Looks like it could get steeper by tomorrow.
  457. Should have clarified, I didn't mean for actual dairy production. You can buy the holstein bull calves for next to nothing (I paid about $50/calf) since they are of no use to the dairy producers. They still bring decent money at the sale barns. I think the 3 best ones I sold brought $4-500 each 6 months after purchasing. I didn't want to fool with them over the winter, buying hay etc. is why I sold them early.
  458. Scratch @ -1.77. It was going nowhere. Too late to the show.
  459. wait for the new USDA WASDE
  460. Full position on.
  461. Why the cotton market is in backwardation ?
    Prices are low and stocks are high !
    Surfaces are sharply lower in the US
  462. Interesting article on the soybeans, TraD. Not sure what to think on the beans right now. It all seems to hinge on Chinese demand.
  463. Really strange market. Former price spikes in February and March inverted 2015 crop and this new one 2014 crop. As if the former were acreage driven and this one stocks driven...Whereas news are just saying the contrary...
  464. Soybean Jul-Sep also in backwardation despite low price and high stocks, maybe the stocks are not low enough for both cotton and soybean to go full contango
  465. Taking a look at the Live Cattle June-August spread. Cash trade is at a standoff right now in the Midwest with the weak futures. April is $10 over June, and comes off the board in 3 weeks. That's enough for feedlots to try and bring some cattle forward to get the better price. The M-Q spread has gotten hammered over the past couple days, could be a good time to buy.
  466. lol I think we must be trading the same strategy or very close to it. We have so many similar trades at the same time.
  467. Lol...I hope it won't become like rates where everyone had the same position at the same time until it eventually stopped working...

    It seems weird because my trades are based on multiple strategies, some on seasonals, some on the curve "inefficiencies", some on fundamentals... But we tend to all see value in the same place for different reasons.
  468. By the way, is your firm trading only financial or physical as well?
  469. Short Dec15/Mar16 Cotton @ 0.48. Old crop has retreated back in contango on false breakout.
  470. given the high stock level of soybean, guess that both soymeal and soybean can go deep contango
  471. Averaged it down a bit. Now my entrypoint is @ 0.07.

    I am really struggling with the longer term stuff right now...At least scalping is good but... I went from no loser at all during fall to no winner at all right now...
  472. Both paper and physical.
  473. Short Sep/ Long Dec Corn @ -10.25 on seasonals. Hoping there won't be major issues during growing season. It has kind of broke out to the downside while outrights haven't...
  474. Also the bird flu in midwest worth watching, could be a big drag for soybean meal and corn
  475. In regards to the long portion of that spread, I talked to a farmer this weekend from out west. He was very adamant that he felt December corn prices should make a decent move up over the next several months. He also said he thought soybeans might move up a little bit, but that ultimately they would come down because he thought total production and acres planted was going to come in higher than the current estimates. For whatever that is worth lol, just passing it along. He farms and runs a business where he interacts with several very large producers regularly.
  476. Yes. The only problem IMO with this corn carrying charges trade is that it is already running at around 60% of full carry...

    I am taking some heat on my spreads lately so I did a little study of the results I got so far on this thread to reassure myself( LOL ). Here it is :

    Winners : 14
    Losers : 3
    Scratches : 8

    So given I usually have a 1/1 risk/reward on my trades, it's not that good but it is not bad... Sometimes I exit early but i do the same on winners as well as losers...
  477. The rain can reduce some corn area in the South and change for beans.USDA may lift both its yield and area estimated figures for soybean in coming months.
  478. Pretty bearish soy meal exports in the NOPA crush report yesterday. Exports down 4.5% in March versus Feb. Soy meal seemed to drive the rally up in beans a couple of months ago. Could be more weakness across the sector as a whole.
  479. What do you think about long feeders/short fats spread this year? The seasonal window is beginning now...
  480. News came out that live cattle traded at $161 in KS, and the market started dropping like a rock. Of course, I just got someone into that LEM:Q spread too.
  481. Just exited half of it at -0.1. :)

    I really like how cotton trades lately.
  482. Clients that shorted this Wheat Spread are pretty close to hitting their profit targets...


    If you can get a decent fill in Live Cattle, a few of my clients appear to be buyers in here...

  483. This is one of the most reliable seasonal trade available. I exited @ -17 a few pages earlier...Full carry is @ -18 right now.
  484. Seriously...Check out HRW and SRW...For one month everything i am reading is about drought in southern states and HRW condition... SRW has always been in good shape ...Give them a little bear move and guess what...HRW drops to hell and SRW stays above previous lows...So much for Fundamentals.:confused:
  485. Out @ -0.1 on that May/Jun Milk spread.:)

    It worked but I should work my entries a little more. I was stepping in front of a train here, I was really too early...
  486. What's your profit target on Milk spreads? And when would you look to get out of a bad trade?
  487. It dépends on the trade. Most of the time I have something like a 1/1 risk/reward. I try to make between 10 and 30 ticks and I exit when I have lost the same...As I said I am usually too early so I can't have a stop too close:)
  488. Exited the remainder at same price:)
  489. Alot of grain floor traders have gotten blown out using traditional fundamentals in terms of carry the past few years. Look at where Silver is trading. Look at the Cotton markets a couple years ago... the carry for decades was about $3.60 until Louis Dreyfus decided to take delivery of the futures at an obscene premium to the cash markets. Many proud, longstanding Memphis firms several decades old were taken out by that.

    I personally have seen so many cash basis Treasury traders get blown out by Bank squeezes. Close friends.

    My take is that fundamentals do not trump price. I believe in fundamentals but I will not fade price.
  490. HRW-SRW spread is down because HRW got some rain. The move was quite huge with -0.40 $/b on the spread. Could be a good buying point. However, I feel that no US farmers is ready to sell, US got into marginal supplyer mode, "if wheat cheap, I will build a huge stockpile and let others sell to this 5 $/b".
  491. Short 2 ZL Jul / Long 1 ZS Jul @ -10570.5
  492. Short ZWAS2N5 SL 24 TP 30-32
  493. Sorry. I don't know this ticker. What is it?
  494. I was just about to ask the same. And is SL = stop loss and TP = take profit?
  495. It's the exchange traded ticker (CQG) for the wheat spread Long Jul/Short Dec.

    I am Short Jul/Long Dec.

    stop loss 24'0 , take profit 30'0-32'0ish
  496. Beware the current full carry is around 30...;) There is a good chance it will go there but you can get a nasty rebound...
  497. Long Jul Soymeal/ Short Jul Soyoil @ 12572. I am quite heavily long meal / Short oïl in my portfolio now. There is a threat threat of slowing meal demand because of Avian flu but at the same time there is large demand for soy. Big exporter sale just reported...
  498. Looks enticing. So you are expecting a continuation and not a reversion. Is there an exchange traded spread 1:1?

  499. Quite sure it doesn't exist. I legged in.
  500. ZM Soybean Meal Butterfly, taken as a buy by clients and documented here in February, is performing nicely and is very close to the profit target:

  501. [​IMG]
  502. ICE Sugar Condor, taken as a buy by clients and documented here in February, is performing but at turtle-like pace. Since the front month is March 2016, there is plenty of time for this trade to develop.

  503. Wheat Calendar Spread Pair, as documented here earlier and was shorted by some of my clients in the Feb and early Mar time frame, has hit it's profit target earlier this week.

  504. I had a couple brave souls get long a Lean Hog butterfly a couple of weeks ago - nothing doing as of yet. Personally, this trade does not stir my soul in the least.

  505. I know this is an interest rate spread, but I wanted to show a trade that stopped out for a loss according to our system rules. Euribor Butterfly, taken as a sell by clients and documented elsewhere on ET here in February, was stopped out for a loss the second week in April.

  506. For the guys who do native exchange traded spreads are the commissions usually double to account for both legs? Is it treated as a real separate instrument by the exchange where each leg cannot be managed individually or is it really just an exchange provided instrument to remove legging risk and that's about it?
  507. 1. The commission is not "round turn"; just for the individual buy and sell component contracts executed in the exchange spread combination.

    2. You can leg out of an exchange spread provided that the instruments being closed out are identical. You can also execute calendar spreads and roll individual legs.

    3. The advantage to exchange spreads is execution and slippage risk ( legging ). You don't need to leg or use automation for trading them. Another advantage is that exchange supported spreads appear in the order book, or ticket, or DOM window, as an individual price ( the collective spread differential ). In other words, for that Liffe Euribor spread I have above, the market would be -75 bid and -74 offered. Once executed, my fill window will have all three spread legs listed by quantity and price - and those exact quantities and prices will appear on your daily statement. Furthermore, that singular exchange supported spread will accommodate all of the types of orders that singular flat price futures ( like ESM5 for example ) use. So, for that Euribor butterfly exchange spread, I can use FOK, OCO, MOO, MOC, limit, stop limit, etc. etc.

    4. Depending upon your execution platform and FCM, you will have to ask the firm's Risk Manager to enable your platform settings to receive exchange supported spreads. There are, literally, hundreds if not thousands of them depending upon the exchange product portfolio.
  508. Another article about why it makes sense to short new crop soybean or just be not so bullish about beans . The Argentina and Brazil strikes can not last for long and China demand for US bean will soon be switched to SA http://seekingalpha.com/article/311...-more-likely-for-2015-and-bearish-for-soybean
  509. Short Oct / Long Apr16 Live Cattle @ 0.250. Only got half desired position.
  510. Out @ 1.975 finally.:)

    It seemed I had this position for 6 months or so...
  511. Nice trade there.
  512. Long Jul/Short Sep Hard Red Spring Wheat @ -11.25. Close to historical carry + Seasonals.
  513. I do the same trade on CBOT wheat. However, I just checked and I find that seasonality is slightly AGAINST the trade till the end of may. Carry has been much higher around 15-20 cents. How do you calculate your "seasonality" ?
  514. I am short S NOV15/long C DEC15 at 2.5. Excellent soybean harvest, 2.5 is quite high for seeding season. On these price farmers should increase soybean acreage.
  515. Wheat spreads bounced like you said it would. I am not sure if it has steam.
  516. Are you talking about CBOT or MGEX wheat? On MGEX, the spread hasn't been much wider than current levels except for little temporary spikes even if my full carry calculation is around 16. On CBOT the carrying charges can increase at Jul expiration...

    For the seasonality you need to do backtesting to know...This one is 100% profitable between May 8th and Jun 23rd on the last 20 years and 80% on the last 44...So it is quite reliable IMO
  517. I will check this one tonight. It should balance my portfolio to get some short beans.
  518. Hello, i,ve traded spreads since november, wonder, maybe there is some skype chat or something like that, where i could participate:).
  519. Welcome.No. We just post trades publicly here...:)
  520. ok:)

    So, I sold ZLQ-ZLZ @-0.12 because of good seasonality. And price is near resistance
  521. I have the same on V15/H16...
  522. "On Friday, Wilmar International Ltd., the largest cane miller in Australia,
    took delivery of 37,611 raw sugar futures contracts, or 2.1 million short tons,
    against the May ICE Futures U.S. contract, according to brokers."

    Gosh...Bottom for sugar?
  523. Likewise I am short on the Jul-Dec Soybean Meal product. However If you look at the other spreads, the spreads are trending up.
  524. Only part of spreads is trending up:)
  525. Oh, Correction: MY short spreads are trending up.

    Nice graphic. I should implement something like that.
  526. It's seasonalgo. Great product.
  527. Long Jul KC / Short Jul Chi Wheat @ 25.75 based on the crop scout report. Average yield estimates just slightly over last year disaster when this same spread was at 110...This last downward movement on KW based on "rain relief " smelled so much like BS...
  528. Out of the short Jul/Long Dec Soymeal spread.

    Anybody think Soymeal is going to take a sudden dip like July of last year?
  529. Tradator, on the KC/Chicago spread, what is it that drives the price difference between the two contracts? Do you just essentially expect demand to be higher for KC compared to ZW?
  530. No idea. Good trade. What was the reason?
  531. Not demand, supply... During all winter we got these recurring comments about HRW bad shape with winterkill, drought...And suddenly in April it rains and it is supposed to cure everything... This spread goes from 50 to 20...Bullshit... The crop is just in slightly better shape than last year when this spread was at 110...Meanwhile SRW crop is in good shape and the demand side hasn't really changed in the last 2 months...Perhaps I am wrong , I rarely trade on Fundamentals but i think there is more upside than downside here.
  532. Thanks for clarifying!
  533. There is a steady trend building up. Additionally, the bid/ask gets volatile when it gets to the bottom of the range.

  534. xandman, is that Qtrader or IC? I've been considering opening an account at DDT with the Qtrader setup to better trade spreads.
  535. Qtrader. It's kind of weird. A tech once showed me a way to chart a custom intermarket spread via QFormula and I even brought it up on a DOM. Anyway, he said that CQGIC functions were trickling down to QTrader unannounced.

    Later on, the functionality disappeared. Perhaps, It was a bug that he reported. Or, maybe I just forgot how to do it right.

    Btw, AMP has it for free.
  536. Is it the formula stuff being done in this video:

    I realize that's IC but the functionality might be the same.
  537. QTrader is much more limited.

    This is pretty much it: You define a spread in Formula Builder and you chart it. You can't bring it up on a DOM and you will have to leg in to execute.


    However, you can analyze option spreads (I discovered upgraded features tonight), graph forward curves, graph a fixed income product according to yield and get full RTD functionality/library. To call them RTD samples is an understatement.
  538. I'd think for any non-native spread you're stuck legging in anyways unless you have an auto-spreader, right? I figure for the exchange spreads it won't make a difference.
  539. What do u think about closing this spread? Seasonality is until June, but we didn't manage to break the support and so there is a pin bar
  540. What is this spread, Vyki?
  541. Live Cattle V5-G6
  542. I am in V5-J6 and I am looking for this support to get broken indeed...On my spread it would validate a large head and shoulders pattern.
  543. Short Jul / Long Sep Cocoa @ 15. The May contract is plunging during delivery period and it should propagate to further months.
  544. Long Oct / Short Dec White sugar @ -5.9. Go Wilmar.LOL.
  545. Correct. Consider the AMP Xtrader deal for an auto spreader.
  546. I got in on the action last night with July KE/ZW @ 26.75. Thanks for the suggestion Tradator
  547. The ICE Softs markets are a really, really good trade. I would encourage anyone to look at the major names and spread combinations. They trend really well and usually hold a trend. If you are a successful trader in another market sector - give it a go. Seriously. I've had several former grain pit traders ( who know nothing really about the ICE Soft product fundamentals ) do really well swing trading with it on price action alone. A couple of these guys have done better on Coffee, Cocoa, and Sugar electronically than they did the last couple of years in the grain pits. Although they are trading much smaller size and of course hanging on to positions for much longer time periods than they did in the pits, the ICE Softs market has really given their confidence a much-needed boost.
  548. very likely ,the crop would be so big that even China can't reduce the ending stock
  549. Yes. I have heard of a guy who solely trade cocoa( ICE and LIFFE ) and do really well. Sometimes the price action is so clear. No false signal and noise.
  550. USDA crop report out in about 5 minutes here, first glance at 15/16 crop balance sheet.
  551. Soybeans down but my soymeal spreads are up??? I will take it...:)
  552. Well KW/ZW sure was moving nicely before I went to lunch, got back and looked like it reversed pretty quickly
  553. Same here...LOL. Nothing dangerous here but we will have to check ZM N/Q in the next few days...
  554. Are the majority of people in here mainly trading CME products? I would have figured everyone was trading both CME and ICE when it comes to Ag.
  555. Finally, hold on that ZM N/Q... this down day was outright-driven...Here is what was important for us :

    "USDA made several changes to the global supply and demand balance sheets.
    The most unexpected was a 4-million-metric-ton decline in 2014-15 world soybean
    ending stocks to 85.54 mmt, below the range of pre-report estimates."

    There were also talks of lower soymeal demand, but all in all the old-crop soymeal spreads should have crashed more on a day like this if there wasn't inherent strength. Oct/Dec gained 5 ticks.
  556. Good deal, thanks for the update!

    Hopefully the wheat spread will move back up as well. It was killing it for a little while haha I was thrilled then quickly disappointed.
  557. Maybe for USDA cut old crop stock,still a big surplus if consider demand cut by bird flu
  558. long soybean oil -short soybean meal,for el nino and bird flu
  559. Hello,

    Can anyone give an insight on Feeder Cattle spreads, of late products has become dull.
  560. Lx008, I've been watching soy oil pretty closely. I was looking at the CFTC Commitment of Traders report yesterday, clearly the funds have been buying ZL, selling ZM over the past couple of weeks. I kind of want to fade that trade, but it could be foolish. I keep hearing that the ZL rally is due to some potentially bullish bio diesel mandate coming out at the end of the month. I don't believe that for a second, I think it's funds in that spread trade pushing ZL higher.
  561. El Nino?
  562. In the 2015 RFS Mandate?
  563. Out @ 13 for a 2 tick profit. Got insecure now that cocoa has broken its resistance. This lasting inversion is bizarre...
  564. I believe so, yes.
  565. Yeah, I believe so.
  566. I checked this morning. Nothing interesting really. Some spreads are at historical levels but it is just a function of the wild cattle market, not something you can fade or exploit in any way...We are still in a long feeders / short fats seasonal window and the spread has retreated a little if you want to enter on a pullback... I didn't take the trade though.
  567. when el nino hurt palm tree in Asia, it may lift both palm oil and soy oil
  568. I just check this trade and I felt that it was no good because a lot of cocoa expiries finished in backwardation and not in contango.
    Do you have any information on cocoa S&D ?
  569. May was in strong carry and there was a short term resistance on outrights @ 3000... But May expired and the resistance was broken...
  570. "0920 GMT [Dow Jones]--EU milling wheat futures nudge higher as Russia says it
    will abolish a tax on wheat exports."

  571. That was a heck of a ZW rally yesterday. I love how the market tries to find a fundamental reason for the rally, although there was legitimately some cold weather in KS and ND. Nobody wants to admit that the fund record short position, combined with high-powered stop-seeking algos, led to a 6% rally on basically little news.
  572. why nobody? I've seen this in some posts.

    Maybe someone can share some good source about fundamental analisys applying to calendar spreads?

    Nice movement in soybeans N-X, I hope, it'll go to 5 or something like this. Also have unpleasant pullbacks in live cattle an wheat spreads but didnt close my shorts:)

    Also there is a good buying opportunity in minneapolis wheat, but my broker doesn't give an opportunity to trade it :(
    There is a good seasonality, we are near support and we are near all time lows [​IMG]
  573. I entered it a little early as usual, see a few pages earlier... The full carry is around 16-17 but historically it rarelly reaches 13.
  574. I am currently applying to RJO Brian to trade MWE, Canola and all the markets not in IB.
    Its so painful to apply to other brokers than IB. So much time spent, I hope I ll trade soon these markets ;)
  575. Its kind of fun that we are spread trader here
  576. I am in front of a dilemma. There is a long Oct/ Short Dec Hogs seasonal trade which can be taken around now until October. It's reliable in terms of historical results but this spread is already quite rich, almost at historical levels except for last year which was a complete outlier in terms of significance. Do you guys have insight on this one ? Fundamentals...
  577. Let me ask a couple of the brokers I work with, they have hog producers as clients. If I can remember to...
  578. Out @ 30. :). The crop condition improvement and this big engulfing candlestick made me change my mind. I initially wanted to ride it much further...
  579. Short Dec / Long Jan Soymeal @ 0.3.
  580. Could someone plz look at my thoughts and tell me if i wrong or right.
    soybeans N-X.

    The reason of falling from the mid of may to the mid of june is because of planting the new crop.
    So they put some risk premium during the planting in the price of november beans relatively to the price of july beans, untill beans emerge and can withstand some bad weather. And this premium is increasing during the planting because uncertainty is also increasing (we dont know how many sprouts will emerge and survive) .
    Also some bad weather news is bearish for the spread, because of higher influence on 2d leg.

    Hope you understand my engish:)
  581. That wheat spread turned around surprisingly quick
  582. Oh yeah...I look stupid now ...LOL...
  583. Haha I'm right there with you. still a profit though!
  584. soybeans N-X can go below 10 ,for USDA planting area report by end of June can hit it real hard, US farmers seem to plant more beans than USDA previous est.

  585. Seriously check the soymeal curve right now...If it is not a buying opportunity on Oct-2Dec+Jan Fly, I don't know what is. It is really odd, Oct/Dec is moving 2 ticks per day while Dec/Jan is moving 7.
  586. Soymeal is a strange market for me. However its kind of classic to have distinct moves when expiries belong to two different harvests ?
  587. I would prefer to trade that soymeal will return in backwardation, something like short dec/long oct
  588. Yes but here October is kind of intercrop , just like Sep on Corn. Sometimes it is lower than December and represent the new supply but sometimes not. Here we have Oct/Dec in carry as if oct was new crop but surprise the next two months are backwards??? Long Oct/Short Dec was my initial position. I have been riding it for 1 or 2 months( and it went within 1 tick of my target...GRRR), I just added the short Dec/Long Jan recently after the WASDE.
  589. Out @ -0.325 before the long WE.:)
  590. Out half of it @ 5. The rest soon in stratosphere hopefully.
  591. I'm still in this one, I really debated on getting out when I saw it at 5.3/5.4 this morning but missed that opportunity. Playing it by ear for now.

    I actually might have an opportunity to get about 25-50 bred heifers soon depending on how the numbers crunch out. There are some beginning rancher/farmer loans the gov offers at very low rates for about a 7 yr term I believe that I am talking with our local office about. Waiting to hear back on all the details tomorrow. My parents have the land, so I would essentially just lease the land from them then put the heifers out there.

    Using relatively generous estimates I am showing the debt would be paid off and it could turn a profit year 4. That's no growth, just simply selling all the steers at 500lbs and keeping the heifers to sell around 2yrs old as bred. The goal would be to pay the loan off quickly, but depending on the composition of what's born, I would more than likely end up keeping some of the heifers to grow the herd as I have enough space to maintain about 50 cows.

    Do you all have any thoughts you care to share on the direction of long term beef prices?

    The loan structure will kind of determine if I move forward with it though. I don't want a larger loan to screw me over for trying to get a new house if we need to sell the current one for my job or something, so that will be my main hold-up.

    I'm trying to diversify my income streams early on in life (just turned 23) so I can have several things going and start building some wealth.
  592. Hah, are we talking like an oil storage type trade here? Actually trading in the physical underlying sounds pretty hard core. Do those loans take into account feed and care in addition to purchase?
  593. You'd have more control and flexibility over your capital in terms of cutting losses and taking profits in terms of trading the spread between live cattle futures and corn futures in lieu of the care and feeding of live animals. Especially at your age - that's not an investment, it's a HUGE distraction for little $$$ given the head count you specify.

  594. Well it depends, waiting to find out all the details. I have a friend that is doing the same program (in another state) and bought 200 head he also received some sort of grant per head to help with the cost because it was a drought area I think. I don't have enough land to support that many though and not in a drought area either.

    I basically was viewing it as a cheap loan to jumpstart getting into the business. I already have a few and my dad has quite a few as well. I just run them on his land.
  595. Bone,

    Appreciate the thoughts. I already have some but this would basically be to increase the amount quite a bit. 20-50 (probably somewhere in the middle depending on details) is definitely not a ton, but I think it's worth the time. We already have a smaller operation in place currently. It used to be much larger but we downsized quite awhile back. Just looking to ramp back up so it wouldn't be a major change. We will see. I have a meeting scheduled tomorrow on it all.
  596. Spoke to the guy this morning and it is structured a bit differently than I thought but still not bad. Anyways, I'll update if I end up going forward with it all.

    @TraDaToR did you find anything out on the hog fundamentals? Awhile back I remember writing down two different spreads to enter around July. I believe one was Apr/May of the next year and then holding it for several months. I will look back and see if I can find the data on it and the other one.
  597. upload_2015-5-27_12-49-57.png
    I'm not subscribed to any of the seasonal historical research sites right now, but just looking back on barchart through 09 it seems to have done pretty well. It does look like it typically needs to be held for quite awhile
  598. Had some guys buy some cheap soy oil puts and made some okay money on them. The funds were indeed unwinding their short ZM, long ZL positions.
  599. Maybe long palm oil short soybean oil ,for el nino will affect palm trees in Asia more
  600. That ZM spread sure dropped quick before I went to lunch. I am still in though and just saw it has come back a bit.

    Do any of you all follow this blog:


    It's the guy that runs Scarrtrading I believe. I just stumbled across it
  601. Scratched it as outrights broke previous lows.
  602. ZL popping on the biofuel mandate that came out this morning. Not really sure how bullish the report actually is. Wondering if it's another chance to fade the move.
  603. This week end I will review all the short soyoil spreads I have on...No need to lose more...
  604. FCX, Have you seen our soymeal front spread? Strikes in Argentina about to get resolved? Poultry feed demand lower because of Avian Influenza? Yes, Yes...LOL...I wonder if this thing trades on CBOT or Cap Canaveral...
  605. I didn't mention a soybeans/ soyoil spread on the thread? I can't find it...I just got out of it @-6715:(
  606. Haha heck yeah, just got back from lunch and saw it. 7.3/7.5! I have my limit order set at 10. I just set it awhile back so I could track the spread price from IB on my phone. I might just leave that in place for now and hope it hits.
  607. long soyoil - short soymeal is the nino trade,follow the big story of the year,EPA as bonus
  608. Whew, soymeal spread taking a hit this morning. Hoping it is just the curve getting a bit out of whack from the big selloff
  609. Why is it the nino trade? I tried to go long the front spread on soyoil to balance the seasonal bear spreads I had further down the curve. I only got 1 lot...LOL
  610. I am still in. There is still more upside than downside risk in this kind of trade. You can close now and it will be a good trade. Otherwise you can hold a bit longer and 1-lose a little 2-Hit a homerun.
  611. IF nino 's big , it will cut palm oil production in Asia to support all veg oils prices,while wet weather in US will bring good bean yield so suppress price of soybean,so it's natural to long soyoil and short soybean or soymeal
  612. What I wanted to say is the linked between water temperature (which is el nino) and wheat yield and maybe palm oil yield is not that obvious.
    I dont find my R&D on the topic but even a strong el nino has no 100 % impact on crops.
  613. Followed lx008 advice and closed my seasonal long Soymeal/ Short soyoil @ 9990. :(

    Now long ZL N/Q @ -0.02 .
  614. Taking a loss is very, very important. I do it on a regular basis. In fact, I'm a card carrying holder of the capital preservation society.
  615. Out@ 12. Trading is tough lately:(
  616. Short Mar / May 16 Soyoil @ 0.14
  617. Long Jul/short Aug Hogs @ 0.6
  618. Just closed out @ 6.8 for a nice 5.3 profit! I only had one on, so I am flat now. I debated on holding it until next week but figured I would go ahead and lock it in. If it pulls back I might enter again.
  619. I am looking at April/May 2016 on Hogs. If it comes back up some, I think it would be a good short. The seasonality seems to be pretty good over the past several years just looking back through the charts. I will sign up for Scarr and do a further back analysis though to really see and need to check fundamentals. That was just eyeballing the chart.
  620. OF COURSE as soon as I sell it immediately opens up higher lol whoops. Still very pleased regardless
  621. It seems indeed a good short. Backtest is OK and the spread is overvalued now. Optimum window July 9th - Mar( next year ) 6th.Beware May is not a really traded expiry.
  622. Beware that for this kind of trades ( front month bull spreads close to expiry ), when it starts going parabolic like that, the risk / reward really becomes asymmetrical. For example when you closed it out @ 6.8, it was much more likely to go to 10.6 than back to 3...
  623. I have a question: Is March 2016 a meaningful date in the RFS mandate regarding biodiesel? For some reason, soyoil Mar/May 16 is trading at a strong inverse...
  624. Yeah, you definitely called that. I was thinking if a down move happened that it could really kill the spread fast since it is the front month now. Good call on your part
  625. Any brave souls trading the July / Dec Cotton Spread ?
  626. [​IMG]
  627. [​IMG]
  628. I don't think so. Jun 1 was a deadline. There's another Nov 30 2015. All the RINs and volume obligations are calendar year. Maybe it's because of the South American supply coming on about that time?
  629. Traded it earlier on this thread but we are getting to close to expiry for me...Plus the situation for new crop december is kind of unclear with Texas flood on one side and surplus in India on the other.
  630. The curve is inverted from Mar 16 to Dec 16 since the RFS announcement. Prior to that it had a normal contango structure on all '16 months. I think( not sure ) it is just the kind of movement where all the most liquid contracts move up in unisson on a price shock and the less liquid spreads actually end up "showing" the move. It just takes time for the curve to get back in line...
  631. Out @ 5 finally. It was 1 tick from target one month ago.:)
  632. Scratch at even.
  633. Long Mar/ short Jul 16 Sugar @ -0.12.
  634. Why Long on this trade ? I would prefer to be short because the market is in strong contango in close expiries and stocks are huge.
  635. To say the truth, it is just a remarkably consistent seasonal window for this spread. No other reason.
  636. Not so strastospheric finally but good enough. Out the other half @ 7.5. End of seasonal window on monday + inverted hammer.
  637. Good trade!
  638. Short Sep / Long Dec cocoa @ 7
  639. Does anybody have any thoughts on the Nov/Jan Feeder Cattle spread? It seems to be quite high compared to where it historically is. Last year it spiked big going into October, but before that it wasn't near the current level. Actually, Barchart shows it spiked, but for some reason Scarrtrading doesn't show that same move. Not sure what's up

  640. Out @ -0.25. Talk about a bad trade. I don't know why I continue to trade sugar. I have never made a dime on it...LOL
  641. We do pretty well with Sugar. I sincerely do not mean to be so after-the-fact but we actually have had a Sell on this particular spread since April with a profit target of -30.

  642. I sure as hell wouldn't try to time this beast and attempt to pick a top on it for the time being.

  643. Are any of you all long cotton right now? I had a buddy that works for a firm tell me there was something up with the planting. Going to call him after work and get the scoop.
  644. Cotton is an adult swim. Just saying. The classic Cotton spread is July - Dec.
  645. Just for future reference - absent USDA or meteorological data or other such strong fundamental drivers; Cotton follows the US Dollar pretty well.

  646. [​IMG]
  647. Beware that China is expected to start selling its gigantic stocks so it should pressure the market down.
  648. a cotton stockpile? Well that definitely might be concern for a move down lol
  649. Long Sep / Short Nov Robusta coffee @ -12 as a propagation of what is happening in front month Jul. Whether it is because of El Nino in Vietnam or simply the roll( Just read this from a specialist... ), there is no reason it wouldn't affect Sep as well in due time. Plus the risk is really assymetric here...
  650. @TraDaToR
    I just check your trade and I find that if the spread follow the same trip as the last expiries it should decrease after the 6 th july.
    It's not that assymetrical because it can goes to -40

    P.S. : Does everyone consider that this spread is at -12 because for me its +12 (NOV-SEP) ?
  651. You mean Sep/nov from previous years or previous expiries?

    Right now Jul/sep is at 110 so 38 to 122 R/R is assymetrical enough.

    I quote them as most Platform and old pit traders do , front - deferred. I used to quote it like you the IB way.:)
  652. What is your take on what's happening on Jul/sep?
  653. Yes why does IB do this? I've always found it annoying but figured maybe I was just the idiot.
  654. I don't know. Perhaps they consider contango the "normal"...
  655. Maybe it is, but its more useful to use the same language as everyone else !
    I am currently opening an account with RJO and its such a mess.
    Compared to IB, RJO is so outdated.
  656. Out @ -11.25 for another scratch. A bit disappointed on this one.
  657. Short Apr / Long May 16 Feeders @ 1.425
  658. Interesting feeder cattle trade. Pretty strong day today. Looks like August '15 is gunning for $227 again.
  659. too much rain in the south it seems
  660. Yeah it's been driving me nuts, seems like it's been raining every other day here
  661. I was in the same trade and I faill too.
    Any idea when IB will force close a long position on a nearby expiry ? First notice day ?
  662. Short 2 S NOV15/Long 5 DEC15 at 2.573 ratio
    Short 2 S NOV15 at 9.43

    Soybean is both the most expensive commodity and the largest stock on use ratio..
    Soybean market is in backwardation which often happens on a very tight market.
    Then or the soybean market is wrong or the USDA is wrong.
    How USDA stocks estimates could be bad ?
  663. Even 2 days before I think... Check out on the website there is a table of deadlines per product somewhere...
  664. You meant 5 ZC Dec15 right? Will perhaps join you soon, perhaps after grain acreage...
  665. Out @ 0.04:). This spread obviously still has some room to go but I rolled it into Mar/Jul which has more potential and a strong seasonal bia into 2016.
  666. So new position . Short Mar / Jul 16 soyoil @ 0.04
  667. Short MWH16 / Long WH16 @ 56.25. SRW crop condition trouble + seasonal tendency. I hope HRS will get moisture though for this spread to perform.
  668. Damn... I almost bought White sugar front spread last week with the double bottom and the rumor of a new giant delivery...I thought I was falling in anew sugar trap...F*** me.
  669. Short Dec/Mar/May Chi wheat butterfly @ -3.25.
  670. Here @ 2. You perhaps have one of the best R/R trade in a long time...
  671. Why do we have this new bull market starting just when I am going on vacation? :(
  672. Checked it out on Scarr once I got in this morning, just got in as well @ 2 even
  673. Talk about some big moves, wow. I was home yesterday and did some scalping on ZS, but I am missing it today.
  674. What a day !
    Western europe is dry so everyone is getting excited, however stocks are still there and Black sea has a nice weather...

    Dont take your holiday in July, thats the bullish month !
    Wheat and barey filling take place in end of june/july !
  675. Yesterday, 47 millions tons traded in CBOT wheat = US wheat production !
    Funds, bulls and trend follower are back on weather market.
    Buyers withdrew from cash markets..

    Who' gonna with this battle ?
  676. I am in the wheat butterfly, -dec/mar/-may, it has dropped more on this spike, hoping once it calms down the fly will normalize a bit and move up some.

    Just saw this article about India. Based on this it looks like they are trying to make it more difficult to import wheat since it is cheaper than what they are going to sell their stock for.

  677. This is one heck of a rally! Wow
  678. Yep, those soybeans are nuts. Corn picking up a lot as well.