Play Turner’s Take Podcast Episode 202

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New Podcast!

We just put out a new podcast.  First we take a look at the sell off in the stock market as the traders fret about slower growth, the trade war, and the President’s possible impeachment.  Then we go over the bullish Quarterly Stocks Report and how it changes our thoughts on possible price ranges for the rest of 2019.  Finally we talk livestock and why we still like cattle for the next 4 or 5 months.  Make sure you take a listen to Turner’s Take Podcast!

Macro Markets

The Dow is down 800 points in just two days as the market worries about slower growth.  The stock market is down about 5% from the highs this year.  A drop to the first blue support line around 2815 is about a 7% correct.  A decline to the last blue support line at 2740 is about a 10% correct.  I still like the stock market and I am going to get into a small position here and I’m willing to add on at those other two support levels.  If the Emini S&P 500 is too big for your account, take a look at the Micro ES.  It is 1/10th of the size and a good way to build positions like this.

Continuous Emini S&P 500

Grains & Oilseeds

The Quarterly Stocks Report was a bullish surprise for both corn and soybeans.  By reducing stocks by over 300mm for corn and 100mm for soybeans, new crop carryout for both needs to come down significantly.  New crop corn carryout could be 1.8 billion without the USDA changing production in next weeks WASDE report.  Soybean new crop carryout could be 550!  At those ending stock estimates and the crop still maturing in the fields, Dec Corn should hold $3.80 and Nov 19 Soybeans $9.00.  For corn to break out above $3.90 and soybeans above $9.20 we need to see the USDA reduce production and carryout in the WASDE

I think both corn and soybean production is going to come down.  We like buying calls and then selling some premium to help finance.  I like buying the March $4.00/$4.50 corn spread for 12 cents or less.  You can also sell the $3.80 put for 7 cents and do it all for a nickel. Margin would start out around $800.

For soybeans I like buying the March Soybean $9.40/$10.00 call spread and selling the $9.00/$8.40 put spread for a 6 cent debit ($300).  Margin for this starts of around $900.

Continuous Corn

Continuous Soybeans

Livestock

We still like live cattle but it is due for a little bit of a correction.  Dec LC has rallied $12 in a month.  We expected cattle to consolidate before making a run at 114, the 200 day moving average.  Cattle held up great today as it was up for the week. This was in the face of a 500 pt decline in the Dow and many other commodities selling off.  Cattle had a strong close which is usually the sign of fund buying.

Dec Live Cattle

 

About Turner’s Take Podcast and Newsletter

If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes!

Craig Turner – Commodity Futures Broker

Turner’s Take Ag Marketing: https://www.turnerstakeag.com

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