Wasde — Trading Ideas on TradingView

Swing Long: Double Bottom + Higher Low + Up-Trending Channel Technical factors: Double bottom formed with a higher Low on the second retracement, which was also accompanied by volume accumulation. Long-term upward trend (view weekly chart). Up-trending channel in the medium-term. Well-defined risk. Low-volume node (LVN) that provides for an early/aggressive breakout entry (likely today). Fundamental Factors: WASDE yield estimates for beans this season are running high by more than two bushels per acre.

Is A Short-Covering Rally in Corn Imminent? There’s no beating around the bush - the fundamentals for corn remain bearish ahead of Thursday’s USDA report. Last month, USDA caught many by surprise revising ‘23 corn yields to record-highs of 177.3 bushels per acre. Since then, corn futures have continuously grinded lower. But, could a short-covering rally be in the offing soon? Per the last CFTC Commitments of Traders report, managed money funds have amassed a net-short position of 280,151 contracts (combined futures & options). That represents the largest net-short position in corn since 2019. While corn has continued making new lows, each of the last 4 contract lows have come in conjunction with less and less conviction - namely bullish divergence on the standard 14-day RSI. Moreover, the volume profile has gradually softened since the January USDA report. Thus, it's possible that all of the bears have already sold. The first step in a short-covering rally is getting bears to stop selling - and a friendly WASDE report on Thursday bares the potential to make that happen. Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers: CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Where is the bottom for soybeans? Soybean futures are off to a rough start in 2024. In the first week of trading, March soybeans were down nearly 42 cents on the back of beneficial rains sweeping Central Brazil. Selling pressure permeated into Monday’s session as well, with soybeans trading down into the mid 1230’s. So, the question now becomes, will March soybeans make new contract lows? Fundamental Snapshot : Monday’s lower price action is not all that surprising considering U.S. export inspections for soybeans were reported at 675k metric tons - below average trade estimates. Meanwhile, Brazil has been exporting both corn and soybeans at record paces each of the past two years, and is expected to have a record or near-record soybean crop this year as well. Wednesday, CONAB will release data pertaining to their estimations of corn and soybeans. Currently, they are less optimistic about the state of the Brazilian soybean crop than the USDA, and USDA will release their World Agricultural Supply and Demand Expectations report on Friday. If we see sweeping downward adjustments to production estimates from both CONAB and USDA, it may help soybeans find a bottom. However, if the market is disappointed in the data released this week, we may see soybeans test 1200 sooner rather than later. Technical Outlook : After last week’s precipitous drop, it was surprising that March beans failed to enter oversold territory. However, it did not take long to break into OS territory on Monday’s session. The head-and-shoulders pattern that’s developed over the past fiscal quarter has a difference of approximately $1.20/bu, which puts an operative price target between 1198 and 1208. That also happens to be the 78.6% retracement level between the mid-June lows and late-July highs. Markets can stay in overbought/oversold territory for extended periods of time, so if data disappoints this week, we may see the head-and-shoulders reach its price target. However, a positive reception to fundamental data this week may serve as a launching pad for soybeans to start moving higher. Check out CME Group real-time data plans available on TradingView here: www.tradingview.com Disclaimers: CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com *Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

Demystifying Corn Demand, Supply, and Seasonality Corn is a versatile crop. It is used in a variety of ways. Corn is a major source of food for humans and animals. It is also an input in industrial products, such as ethanol and plastics. According to the FAO, in the past year, over 1.1 billion tons of corn was produced worldwide. Gross production value stood at $192 billion, second only to sugarcane (1.8B tons) by volumes and to rice production ($332B) by value. Previously , we highlighted that a bumper US harvest is expected to send corn prices tumbling. This paper is a primer on Corn. It describes demand and supply dynamics and delves into the usage of the crop, its price behaviour and seasonality, among others. Corn is an integral part of human diet. It is consumed both as staple food and in processed products. It is also an important animal feed source. Corn is used in the production of ethanol fuel, plastics, adhesives, and pharmaceutical products. It is also a primary ingredient in alcoholic beverages. SEASONALITY IN CORN PRICES The world’s largest corn producer is the US, representing 32% of production, followed by China with 23%. In October, harvest season in the US overlaps that in China, pushing corn prices to their lowest during the year. Based on data observed over the last 17-years, the seasonal impact of harvest in the US and Chinese on corn prices is clear. Corn price pop through the first half of the year and then plunge through Q3 until start of Q4 when the crops in the US, China, and Brazil commence harvesting. Based on front-month corn futures, the average prices of corn have ranged between 200 USc/bushel to 800 USc/bushel. Over the last 17-years, with the exceptions of six years (2008, 2010, 2012, 2013, 2021 and 2022), Corn prices tend to be stable through the year underpinned by stable demand and robust steady supply. However, external shocks such as the global financial crisis, pandemic, and the adverse weather conditions cause outsized impact leading to large price volatility. Based on CME front month corn futures prices, the heat map below shows an upward trend in corn prices from December until May which is the period immediately after US and China harvesting seasons. This phase also represents the corn planting season. As harvesting begins, corn prices tend to plunge from June until September before starting to recover. On average, based on the analysis into corn prices during the last 17 years, February, October, December, and April are months when corn prices turn bullish. While corn prices are most bearish during the months of June, July, and March. As corn is a hard crop which can grow in various climatic conditions, most countries have ample domestic production to match their needs with few relying on imports. Consequently, marginal demand from importers can have an outsized impact on prices. China is the largest importer despite huge domestic production. Other major importers include Brazil, Mexico, North Africa, European Union, Japan, South Korea, and Vietnam. WHAT DRIVES CORN DEMAND? Demand for corn is chiefly from animal feed followed by food and industrial use. Corn’s high protein and carbohydrate content makes it suitable animal feed for cattle, pigs, and chickens. Unsurprisingly, the US, representing 26% of global consumption, and China, representing 25% of global consumption, are also the largest consumers of corn due to their large livestock populations. The quantity of corn used for feed has remained largely unchanged ~5 billion bushels, since the late 2000’s. Another major demand driver is Ethanol production. Ethanol has many industrial uses, the foremost of which is gasoline blending. Ethanol complements gasoline as they are mixed to create a cleaner burning and higher performing transportation fuel. The demand for corn-ethanol mirrors gasoline demand. This year, the IEA expects 2% higher demand for Crude Oil and its by-products. Consequently, the USDA expects ethanol production to rise by the same margin. Corn supply used for Ethanol production rose sharply in the late 2000’s but has since plateaued around 40%. At the same time, share of corn consumption for feed declined from 60% to 40%. This was accommodated through higher corn production. Although not as significant as feed and ethanol, demand for human consumption of corn is another major contributor. Humans consume corn directly as cereal and in its processed forms. Corn can be processed into multiple by-products including Corn Flour, Corn Starch, Corn Syrup, Corn Oil, and Dextrose. Corn is present in most foods consumed by humans in one form or another. Corn flour like wheat flour is used for cooking and baking. Corn Starch is used as a thickening agent and binder for food and pharmaceutical production. Corn Syrup (also high-fructose corn syrup) is a cheap and effective sweetener created from corn starch used in the production of processed food as well as beverages such as Coca Cola. Dextrose is a sugar substitute used as an artificial sweetener and preservative. CORN INVENTORIES ENSURE SUPPLY YEAR ROUND Although corn supply is cyclical based on harvest levels, demand remains strong year-round. Corn inventories play a huge role in ensuring availability even months after the harvest. Excess corn that is not consumed in the year is carried over to the next to ensure that a baseline supply is always available. These carryover stocks are managed carefully by the USDA using regular demand and supply estimates that it publishes in a monthly WASDE report. Changes in carryover stock mirror supply-demand trends. The USDA generally maintains carryover stocks between 1-2 billion bushels. Last year, the US ended the year with 1.2 billion bushels of corn, sharply lower from the 1.9 billion bushels in 2020-21. However, a bumper harvest this year signals that carryover stocks from the current harvest season and marketing year are expected to surge 56% to 2.2 billion bushels. CORN SUPPLY, PRODUCTION, DEMAND AND PRICES IN 2023 Corn prices in 2023 have broken their seasonal trend with bumper harvest expected. In their general seasonal trend, as seen over the past 15 years, corn prices rise during the first half of the year as supplies from the previous year’s harvest start to get depleted. Prices fall sharply following the start of harvest season. However, corn’s price since the start of 2023 shows a divergence from this seasonal trend. Prices are sharply (-12%) lower YTD. This is due to strong planting in the US as well as weak import demand. USDA expects a record US corn harvest of 15.3 billion bushels this year. This is expected to lead to the highest levels of carryover stock since 2016-17. China’s imports and domestic production is expected to rebound sharply but is largely expected to be compensated for by huge carryover stocks in Brazil. Brazil is expected to be the largest corn exporter followed by the US. As such, harvests in both countries should be closely watched to identify shifts in projections. In case harvest in either country is lower than expected, it would not be able to match import demand from China which would lead to higher prices. Overall, USDA expects 27% lower average price for corn in 2023 at USc 480/bushel. This will lead to far higher global trade and consequently higher trading volumes in Corn futures. USDA’s WASDE REPORT IS AN IMPORANT RESOURCE FOR CORN TRADERS As stated, the USDA’s WASDE report is a critically important resource for investors. Specifically, the May WASDE report is vital for Corn as this is the start of the planting season and estimates in this report form the basis for the next marketing year’s outlook for major crops such as Wheat, Corn, and Soybeans. WASDE includes an outlook summary for each crop as well as statistics measuring the estimated demand, supply, exports, and carryover stocks for major countries as well as different regions within the US . The 2023 May WASDE report showed expectations of record global corn production as well as consumption. However, consumption is expected to lag production leading to larger ending stocks compared to last year. With higher ending stocks, supply of corn is expected to remain stable year-round. This is bearish for corn prices. Understanding the supply-demand characteristics in the WASDE report can equip investors with a long-term price outlook. Still, it is equally important to keep track of the market on an ongoing basis due to the myriad of factors affecting price as highlighted above. A summary of these is also given below. SIX KEY TAKEAWAYS In conclusion, the following key takeaways summarise this primer: 1. Corn is a versatile crop. It is a major source of food for humans and animals. 2. Gross production value of corn stood at $192 billion, second only to sugarcane (1.8B tons) by volumes and to rice production ($332B) by value. 3. US and China are the world's largest corn producers and consumers, representing over half of global corn production & consumption. 4. Corn prices are heavily influenced by the harvest season in US and China which overlaps between September and October. 5. Major demand sources for corn are animal feed, industrial use (especially ethanol production), and human consumption . 6. May WASDE report showed expectations of record production and consumption of corn and higher ending stocks, leading to lower prices. MARKET DATA CME Real-time Market Data helps identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER This case study is for educational purposes only and does not constitute investment recommendations or advice. Nor are they used to promote any specific products, or services. Trading or investment ideas cited here are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management or trading under the market scenarios being discussed. Please read the FULL DISCLAIMER the link to which is provided in our profile description.

September Commodity Trading at a Glance Summary of the last September WASDE Report: ***WHEAT*** – U.S. wheat outlook for supply and use is unchanged this month – Global wheat outlook raises supplies, consumption, exports, and ending stocks this month, as production increases for Russia and Ukraine, more than offset a decline in beginning stocks. Area harvested, yield, and production for Russia will all reach record highs. The Ukraine production forecast is increased as higher yields in the Forest and Forest-Steppe zones ***CORN*** – U.S. corn outlook is for lower supplies, reduced exports and corn used for ethanol as on reductions to harvested area and yield – Foreign corn production is forecast higher with increases for China, Ukraine, Canada, and Mozambique more than offsetting reductions for the EU and Serbia. China corn production is raised as abundant rainfall ***RICE*** – U.S. rice this month is for lower supplies. Lowest U.S. rice production since 1993/94 – global outlook is for lower supplies, higher consumption, reduced trade, and lower stocks. ***SOYBEANS*** – US Soybean production is projected down with lower harvested area and yield. Higher cottonseed production. – Worldwide, Ukraine’s soybean production is raised on higher area. China soybean imports for 2022/23 are lowered. Global soybean ending stocks are down mainly on lower U.S. and China stocks. EU soybean imports are lowered with higher supplies of other oilseeds. ***SUGAR*** – U.S. sugar stocks are reduced as combined lower production and imports are only partially offset by lower use. Deliveries for human consumption are reduced. ***LIVESTOCK*** – Beef production is raised for the second half of the year with higher expected slaughter for the period. Cattle price forecasts for 2022 are raised on current strength in demand, but forecasts for 2023 are unchanged. ***COTTON*** – U.S. cotton projections include higher beginning stocks, production, exports, and ending stocks this month. – The 2022/23 world cotton projections include higher production and ending stocks relative to last month, and lower consumption.

$WHEAT - Descending Scallop & USDA Reports.Actually it is nothing to write. We are waiting for tomorrow's reports. Magazines are full of wheat. Prayer for the severe winter is ... greatly appreciated. thepatternsite.com