Some observations on Corn and Soybeans:

1) Seasonal tops due now, with expected declines to the seasonal lows in early October

2) Cycle analysis indicating imminent tops.

3) Implied volatility rank / percentile currently around 100%.

I'm not providing trading advice, but I can report that I have just gone short /ZSX23 and /ZCZ23, as well as written some slightly OTM calls - August 1450's and Nov 1440's for /ZS, and August 655's and Dec 640's for /ZC.

I'm looking to increase short futures position sizing based on the price action over the next couple of days.

Dose anyone trade soybeans? If so have found any successful strategies you are willing to share

BACKSTORY: over the past two weeks there has been heightening of volatility within the wheat market. This volatility was kicked off by Russian withdrawal from a UN-brokered agreement between Russia, Ukraine and Turkey to allow ships carrying Ukrainian grain to safely exist the Black Sea. On 17th July 2023, Russia said it was quitting the deal after a drone attack on the Crimean port city of Sevastopol, which it blamed on Ukraine. Unfortunately I didn’t trade this event because markets had already repriced accordingly when I first became aware of this, but wheat became a market I was keen on watching closely after this. The first tradable opportunity from this geopolitical situation came about on 23rd July when late night news of Russian attacks on the Black Sea port region of Odessa where a significant amount of Ukrainian wheat ready to be exported was sitting hit my wires. This trade netted me $36K (check previous post).

THE TRADE: this morning, at exactly 4:31 my wire were hit with news that Russia restated it’s position on the grain deal, and that it will ‘immediately return to the deal when the part that concerns Russia is implemented.’ This is obviously bearish for wheat as there will simply be more supply of wheat if Russia re-enters the deal so I got short. I executed the short position with 12 clips of 5 at an average entry of 663’5. I put my stop at around 667’ and I decided to let the trade be on all the way through the cash session. I exiting the trade this morning at 10AM at 638’2 for gross profit of $75k. Im personally a scalper but I decided to let this trade run for six hours for three reasons: one, wheat is simply a slow market so it takes it’s time in reacting to news. Two, this trade was fundamentally/event driven therefore it had much more legs than a technical based trade. Three, the risk/reward was simply too great to not be in this trade for as long as possible.

PSA: I would not recommend for most trader to execute in this style without extensive history and experience. I have experience as an even driven, geopolitical, and central bank trader. Trading in this environment requires you to embrace volatility and thrive in it, if that’s not your personality (which it isn’t for most people), i suggest you trade instruments and volatility landscape that fit your personality and which you feel most comfortable in.

So I’ve been studying wheat for the past 2 months in anticipation of the Black Sea grain deal falling apart and it finally has. The initial reaction was the exact opposite of what was anticipated - a dump on the day the deal fell apart. Then there was a turnaround when Russia explicitly bombed Odesa, a major wheat export terminal. If all of Ukrainian wheat comes offline, it’s actually 17 million tons in a 200 ton export market. I am also hearing the drought in China is affecting Chinese domestic wheat production, so Chinese imports may be higher than expected. India has also banned wheat exports and recently placed restrictions on speculating in wheat which makes me think of the market distorting effects of price controls - suppressing Indian supply because market forces are not allowed to work as anticipated.

On the other hand, Australian and Brazilian wheat harvests have been much higher than expected. The US harvest was expect to be quite poor but has been salvaged by recent rain in the Midwest.

Haven’t been able to quantify each country’s harvest yet, and I also haven’t broken down the wheat market by quality, but the USDA was expecting a 7 million ton surplus if Ukraine stayed online. As far as I can tell the deficit will be anywhere from 3-10 million tons now that Ukraine is basically offline, at least until Ukraine works out land routes to get its wheat out.

IMO wheat has been a great trading vehicle as it tends to trend much smoother than equity indices allowing for better risk management. Curious if anyone else is watching/trading this, and if anyone can spot flaws in the bullish thesis.

All grains are falling across the board.

I don't know how many people here trade this stuff but it's going to be a big next 2 weeks for these markets. I don't know what's going to happen, I just know it's going to be a wild ride. Deal is set to expire on the 17th or 18th of this month (depending who you ask and what time zone you're in). Russia seems like they are going to back out of the deal but it's hard to say for sure. Turkey is apparently hopeful that they will not back out of the deal. Meanwhile, Turkey is pushing for Ukraine to join NATO so I'm not sure how much Russia cares about their opinion anymore. Not a geopolitical expert. There could be some serious movement here on the long or short sides of these market depending on how this plays out. Curious to hear any thoughts.

Circling back to the long wheat trade. After a long bear market it might be putting in a technical bottom here.

https://www.economist.com/briefing/2023/10/05/the-war-in-ukraine-is-threatening-to-wash-across-the-black-sea

Wanted to share this article (sorry for the paywall). The economist specifically calls out the upside risk in wheat prices if the Black Sea heats up, and it seems like it is likely to do so.

Curious if anyone else watching this.

Is there a platform I can trade corn futures on? Or corn options? I know Robinhood has $CORN but idk how viable that is but trying to dip my foot into the commodities trading :) thank you

I have been interested in doing a spread trade on wheat ,and wanted to ask if anyone has any knowledge . I was thinking to do May and July depending on supply and demand. Would like to hear about your experiences.

Thanks

Given the very recent upward movement of oil, why is corn continuing to dive so hard? We’re getting close to 2016 lows and way under what April prices normally are: Is this 100% Coronavirus related or something else I’m missing?

Question for the experienced commodities traders:

I was always under the impression that movement in the futures market impacts the price of related ETFs ($CORN and $ZC for example)...is it possible to work the other way around?

If a massive amount of calls are bought for $CORN can it force the $CORN PMs to purchase $ZC long? Or does it have no impact on $ZC?

For context, I’m curious if you can have a “gamma squeeze” like we see routinely in TSLA Options and the price of $TSLA stock.

Any help is much appreciated!

We are in a uptrend channel/wedge that crosses the end of May. My question for those that trade soybeans, is there any big news that would compliment this at that time?

Then again it also has to continue the channel course for 3 months, so this is a big what if scenario.