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Grains & Beans
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Created: by myrrdin Attachments:0

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Grains & Beans

  #101 (permalink)
Market Wizard
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kazz View Post
Thanks @myrrdin

What a great post, I'll need time to read and digest this especially the bit on spreads - not sure what these are?

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There are different kinds of spreads.

Intra commodity-spreads consist of two legs of the same commodity, eg. buying CN and selling CZ. Margin for these spreads is significantly lower than buying an outright CN future.

Inter commodity spreads consist of two legs of different commodities, eg. buying RBK and selling HOK. Margin depends on the correlation of the two legs.

There is a number of books explaining the basics of futures and options trading. You will find some of them if you read through these threads. I like the books written by Carley Garner, as they include everything necessary in a very understandable way. But there are many other good books.

Best regards, Myrrdin

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  #102 (permalink)
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myrrdin View Post
There are different kinds of spreads.

Intra commodity-spreads consist of two legs of the same commodity, eg. buying CN and selling CZ. Margin for these spreads is significantly lower than buying an outright CN future.

Inter commodity spreads consist of two legs of different commodities, eg. buying RBK and selling HOK. Margin depends on the correlation of the two legs.

There is a number of books explaining the basics of futures and options trading. You will find some of them if you read through these threads. I like the books written by Carley Garner, as they include everything necessary in a very understandable way. But there are many other good books.

Best regards, Myrrdin

Thanks @myrrdin

This is really helpful and cleared up alot for me. I now know what to look for. I am a big fan of Carley Garner. I've read her book on commodity trading - it's a very comprehensive resource and covers pretty much all one would need to know.

I also follow get on Twitter and have listened to as many podcasts as I can where she is featured. I would say that she is an essential resource for anyone starting out in futures.

Is there anyone else you'd recommend as a good resource for learning futures.

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  #103 (permalink)
Market Wizard
Linz Austria
 
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kazz View Post
Thanks @myrrdin

This is really helpful and cleared up alot for me. I now know what to look for. I am a big fan of Carley Garner. I've read her book on commodity trading - it's a very comprehensive resource and covers pretty much all one would need to know.

I also follow get on Twitter and have listened to as many podcasts as I can where she is featured. I would say that she is an essential resource for anyone starting out in futures.

Is there anyone else you'd recommend as a good resource for learning futures.

Sent using the futures.io mobile app

Depends on what you are interested in.

Regarding Seasonal Trading Jerry Toepke from MRCI offers a good educational weekly newsletter.

Regarding COT data Floyd Upperman offers such service. He produces good charts of COT data, and explains them on a regular base.

I subscribed to both of them (one after the other) long time ago as a beginning trader, and I found it worth the money.

Regarding Supply & Demand data it might be worth looking for a broker who is expert for the commodity you are interested in. Some of them are good regarding grains & beans, others are good in energies etc. They have excellent educational material. (In case you have a large account you can open two accounts, one at such broker and one at a low cost broker.)

Good luck !

Best regards, Myrrdin

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  #104 (permalink)
Legendary Market Wizard
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  #105 (permalink)
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Maybe it was an old post like the one on seasonality but I noticed that you were once involved in oats myrddin. Is is still the case?
I have an unachieved story with oats, I started to really like this commodity and invested a lot of time on it as I am bullish on it on a long term only to realize that my broker Saxobank is not offering options on it. On the other side I am aware that the liquidity on this commodity is low and even probably lower and lower (as Orange Juice?). I prefer to follow closely commodities that are both available in options and futures at my broker (and on CFD or mini-lots). So with regret I follow less but one day I will come to oats and return to palladium (probably in short direction on this latter)....
Particularly if there is a good opportunity...
PS By the way I a big fan of Nadal since he appeared the first time at RG...Thiem is playing very very well as well and he is a fantastic opponent (I watched a part of his semi-final...)


Last edited by Sagal; June 9th, 2019 at 09:07 AM.
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  #106 (permalink)
Market Wizard
Linz Austria
 
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Sagal View Post
Maybe it was an old post like the one on seasonality but I noticed that you were once involved in oats myrddin. Is is still the case?
I have an unachieved story with oats, I started to really like this commodity and invested a lot of time on it as I am bullish on it on a long term only to realize that my broker Saxobank is not offering options on it. On the other side I am aware that the liquidity on this commodity is low and even probably lower and lower (as Orange Juice?). I prefer to follow closely commodities that are both available in options and futures at my broker (and on CFD or mini-lots). So with regret I follow less but one day I will come to oats and return to palladium (probably in short direction on this latter)....
Particularly if there is a good opportunity...
PS By the way I a big fan of Nadal since he appeared the first time at RG...Thiem is playing very very well as well and he is a fantastic opponent (I watched a part of his semi-final...)

I trade Oats once in a while. Currently I am not invested.

Options can be traded with all brokers I worked with. But open Interest is very limited. According to the Interactive Brokers tool there are 600 - 700 options for the July contract and 3 (!) for the September contract. I do not intend to sell options for oats.

Best regards, Myrrdin

PS: As Austrian of course I have to support Dominic Thiem, who not only is an excellent tennis player, but also a very fair sportsman.

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  #107 (permalink)
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ZC

I see the WASDE report earlier this week hit corn hard.

I cannot help thinking the drop has been overdone. I'm not confident enough to go long corn, but this drop has resulted in a good spread becoming cheaper - I have just opened ZCN20-ZWN20. The seasonals are good, and the record over the last 10 years is good too.

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  #108 (permalink)
Market Wizard
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zxcv64 View Post
I see the WASDE report earlier this week hit corn hard.

I cannot help thinking the drop has been overdone. I'm not confident enough to go long corn, but this drop has resulted in a good spread becoming cheaper - I have just opened ZCN20-ZWN20. The seasonals are good, and the record over the last 10 years is good too.

The ZCN20-ZWN20 does not look cheap to me on the longterm chart.

There are two spread trades in Grains that I like at current level: The KW-C spread has not often been close to 0. And the KW-W spread has not often been at current level at this time of the year. I am long both spreads.

Additionally I recently sold the KEZ P4 options. A stronger corn price and the KE-C spread move in the "right" direction both would support KE.

Best regards, Myrrdin

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  #109 (permalink)
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myrrdin View Post
The ZCN20-ZWN20 does not look cheap to me on the longterm chart.

The KW-C spread has not often been close to 0. And the KW-W spread has not often been at current level at this time of the year.
.....

Additionally I recently sold the KEZ P4 options.

Best regards, Myrrdin

I totally understand the logic of selling KEZ P4's. The contract has only been at these levels once in Aug in the last 10 years.

As for the spreads you mentioned, whilst searching to see which months you meant, I came across the KEZ19-ZWZ19 - it's the lowest it's ever been in 10 years - the previous low was -20, and this spread is currently around -80. I haven't researched the fundamentals of this, but from a technical POV, it's worth looking into further. Would welcome your view on this.

Also, I simply couldn't find any KW-C spread close to zero. Will take a closer look tomorrow.

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  #110 (permalink)
Market Wizard
Linz Austria
 
Trading Experience: Advanced
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zxcv64 View Post
I totally understand the logic of selling KEZ P4's. The contract has only been at these levels once in Aug in the last 10 years.

As for the spreads you mentioned, whilst searching to see which months you meant, I came across the KEZ19-ZWZ19 - it's the lowest it's ever been in 10 years - the previous low was -20, and this spread is currently around -80. I haven't researched the fundamentals of this, but from a technical POV, it's worth looking into further. Would welcome your view on this.

Also, I simply couldn't find any KW-C spread close to zero. Will take a closer look tomorrow.

There are fundamental reasons for the pries of these spreads. But these reasons are known now, and should be included in the price.

Thus I entered these trades.

Best regards, Myrrdin

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