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Will Soybeans Provide a Marketing Opportunity This Spring?

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With trade talks continuing to drag out between the US and China (and not without any new hope), the market has likely shrugged off any hopes for a massive (near term) purchase of any US products and is likely turning its attentions to weather events for 2019. Spread markets reflect this idea and continue to show a bearish hand for outright soybean prices, with much of the cost of carry matrix trading at or near 80-90% full carry levels (in front month spread). When calendar spreads are trading at or near full carry levels (like front month beans spreads are now), they offer a rare opportunity to bull spread against the arbitraged fully carry level; however, they also represent well supplied and generally bearish price scenario for outright commodity prices.

This weeks Commitments of Traders report is showing non-commercial participants also net short soybeans by -46k (down from -51k last week). This is still a way off from the all-time largest non-commercial short position of -113k (6/27/2017) for soybean futures the US futures market has plenty of room to add to that short sentiment. It is impressive that even in the face of the May 19 contract rollover, neither front month calendar spread prices nor outright price seems to be...

Dan's full "Spread Outlook" is available for download, including an indepth look into the most liquid spreads and market conditions that might present opportunities for spreading! Complete with charts and cost of carry calculations!

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About the author

Dan began his career in 2006 as an arbitrage and clearing clerk for Spyglass Options in the Eurodollar futures options pit on the floor of the Chicago Mercantile Exchange. Taking his employing brokers advice, Dan soon left the floor to pursue a career “behind the screens upstairs”, as there was an inherent lack of opportunity for market making in open outcry pits. After graduating from the University of Notre Dame in 2009 (and for the subsequent 10 years), Dan leveraged his IT background in networking and computer programing to begin developing computerized trading algorithms and trading systems for multiple private equity firms and his own account. He eventually found his specialization in trading carry trade dynamics in currency and interest rate futures; while simultaneously building his experience in trading both inter-market and intra-market spreads. His trading experience later expanded to include most commodity spreads, with an emphasis on carry trade economics in agricultural commodities. In 2016 Dan decided to take his career full circle by becoming a series 3 and 34 licensed broker; and expanded his outreach to the agriculture production community. In 2018, he joined Zaner Financial Services Ag Hedge division, bringing his knowledge and expertise of carry trade economics and continues expanding exposure to spread markets. Dan can be reached at (312)277-0110 by phone, @DanielHusseyJr on twitter, and emailed at
Contributing author since 2/15/2019 

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