Trading Volatility in Agricultural Markets

April 4, 2018 9:27AM CDT

As of Wednesday morning, the soybean market is volatile yet again as the market focuses on a number of fundamental developments.  Front and center are US and China trade war concerns.  While we do note the Chinese purchases of soybeans from Brazil at a premium, also modifying their VAT to mitigate said premium, our desk also wonders if such trade war fears led to Chinese buying this morning and where else China must go other than Brazil and other competitors. 

While these are factors on the demand side, the market must also factor in the expectations for record crops and stocks to usage ratios amid a report that is consistently inconsistent when one looks back.

Looking to the chart below, we can see the moves made in the soybean market lately amid the USDA planting intentions report and this morning’s trade war developments.

While there are a number of ways to trade this market, our desk specializes in the way in which would work best for your account and objectives.  In addition to hedging farmers and speculating traders, we offer full service accounts, automated programs on soybeans and other markets, as well as monitoring a number of option and calendar spreads. Please contact me at your convenience to discuss your approach in this market and any other.

Soybeans May '18 240min Chart

soybeans_may18_240min_chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be 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 judgement 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.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.