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July Corn:

I've been bullish since late march and think the price of grains are going higher. Since the break out to of three month trading rang yesterday the market has had short covering that propelled July Corn above $3.90. Open interest has dropped significantly this week (Typcially Bearish). The real question is are these levels going to be maintained? Tomorrow at 11 A.M. there are key reports coming out. Will the Funds defend there net short position or cover up. Either way there will be moving markets. If your trading form the long side look for $4.05 and the short side $3.69.

From my experience for the market to move higher there will need to be three waves up. In my option the First wave is before the report quite volume some buying thinking its a bullish report (Funds will Sell), Second wave 11 A.M-11:30 A.M. more buying (Funds will sell more), Third Wave 1 P.M.- 1:15 P.M. (the close) if the market is good we will close making new highs (Funds getting jammed and are covering up). Sunday night we gap higher and dont look back.

If the funds decide to cover up most of there short positions before/after the report there will a small chance we lock. They hold a massive short position. It is possible the men in the white hats ride in and the funds lose. Managed money does not always win and when they lose they lose big.

With that being said there is a lot of corn globally and the U.S. still has roughly 25% of last years crop unsold. If prices get to 4.10 farmers will sell. What does that mean? In the short terms its bearish but long term extremely bullish. When the prices of corn is at the highs there is very corn in the bins.

Trade with a tight Stop going into the report we should never trade lower after the report if the market is good.


July Soybeans:

On 5/30 I recommended buying July $9.20 calls for 12 cents. The seasonal play was from 5/30 to 5/9. One should look to roll the positions tomorrow after the report DO NOT work any orders to get out. What I wrote about corn is also true for beans. Did we buy the low on 5/30 I believe so.

"Thats a Bold statement Cotton lets if it pans out for them."

Call or Email me with any Questions.

Cody Hoffman

(312)474-7853

Cody.Hoffman@SystraAssetManagement.com

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About the author


I started in the industry with BB&L Farms Research based out of Boon Iowa. There I learned the in's and out's of the grain and livestock markets.

 

Understanding what some of the driving factors in the commodity markets are. I was then offered a position at BRICS Global Markets based out of Chicago as a order desk clerk.

 

At this point I started developing personal relationships with farmers. Icon Alternatives then offered me a job with the opportunity to become a Futures Broker. Here I teamed up with Russell Tanner and started developing private clientele. In the last few months we, as a team have transferred companies to Systra Asset Management.

 

The company is based out of Dusseldorf Germany with the main headquarters in Chicago.

Cody.Hoffman@SystraAssetManagement.com

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