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I am willing to and plan to adjust or hedge as required.. and manage as needed
If i dont know how or cannot do it or not willing to do it.. then i should NOT trade weather related seasonals
Myyrdin laid this out in his plan of what he is planning to do
Anyway SMCJB thanks for the comment.. as being realistic and honest.. sometimes can rub people the wrong way.. but best to have that and be ready than just HOPe and pray!!!
Now either I should not be in this trade or be willing to adjust as required (and keep reading agweb and farfutures and listen to Chip Flory daily to see when weather patterns could affect corn)
since i dont have all the weather data that large companies have
Can you help answer these questions from other members on NexusFi?
The problem regarding weather forecasts is that when we get the information it is already priced in. In my opinion, the only way to trade successfully during a weather market is to set up trades that make money in a large variety of weather developments, as I showed in an earlier post regarding corn and soybeans.
Tomorrow, Friday, at 11 am (Chicago Time) the USDA Report on grains & beans (& cotton) will be released. This report is well known for causing large moves, especially in the row crops.
From a seasonal point of view, KWZ-WZ looks promising. It should be strong until October.
The spread should get support from strong MW, and from the fact that it rarely goes below 0 at this time of the year. COT data us more bullish for KW than for W.
But remember to place a (mental) stop: In 2007 and 2015 the spread went down below -40.
Looks like that trade worked out well for you - nice job @myrrdin.
I know you look at COT data so I have to ask, are you worried at all about the record spec longs in KE? The wasde report already poured some cold water on the rally and unless there's a deterioration in the crop or some kind of supply disruption those record longs will be looking for an exit, no?
The MW trade was one of my best in 2017. I liquidated recently, and do not intend to re-enter. The future might move up to 9 $, but could move downwards as well. Options are very thin, and too expensive to buy, and too risky to sell.
The only trade I hold in the grains is a short position of WN8-WH9, sold at -18 some days ago. I intend to risk it to 0, as it has not been trading above for many years. In my opinion, the spread should move down to -50 or below before the expiry of the WN8.
Regarding the KW-W-spread, longs might be looking for an exit in W as well as in KW. But in some cases MW might be replaced by KW, and that could help the spread. I do not think there is a large potential for profit, and intend to exit between 12 and 15. Stop is quite close below the April low.
Today at 11 am (Chicago Time) / 18.00 (Central European Time) USDA will publish its August report. The report for this month is one that an move prices drastically, as it will show rather final figures for corn. Surprises are possible.
Even if figures are bearish prices could turn around sharply during the next couple of days. I do not hold any short options in grains or beans.
I suggest to keep positions moderate going into this report.
