RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Agricultural

Trading Volatility in Agricultural Markets

Posted 04/04/2018 9:27AM CT | Michael O'Donnell

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

Michael O'Donnell

Mike started his career in the markets on the floor of the Chicago Board of Trade as a trade checker for a local market maker in the Dow Futures pit. This led to interning with an independent introducing broker and going on to work with a number of market participants including: speculating clients, hedge clients, introducing brokers, futures commission merchants, commodity trading advisors, proprietary traders, trading educators, system creators, and a number of international financial market participants.