CBOT Wheat Futures

[BTO780]

Just give $18 for my wheat and call it a day.

[wheatking16]

For those so inclined I do think the timing is right. In Chicago, the 60 min chart gave a nice bull buy (that I watch for) on the recent correction. It has an initial target of $8.33/bu (7.82 currently). That goes with a buy on the daily chart with a target of $8.53 and a buy on the weekly chart with a target of $8.70. The real potential lies in the saucer on the monthly chart, suggesting a much more significant rally may lie ahead.

As for the mechanics, that is more risk tolerance and personal preference. If using futures and intending on holding the position for some time (unless the market tells you not to), you may as well go directly to the March 22 Chicago contract. The trade will start to roll from Dec to March soon anyway.

If you prefer the limited risk of options and are willing to lose some time value, Dec 21 call options may be an interesting play if the timing works out. They expire Nov 26th so there isn't much time value left. One can be purchased near the money for likely less than what would be risked on a stop. Then re-asses in a couple of weeks.

It is worth noting that the Minneapolis contract is the proper replacement for our hard red spring wheat but it is already about a $2.50/bu US premium to Chicago. One should always try to buy the strongest market (or sell the weakest) but in this case given the premium already in place and the greater liquidity in Chicago, I would suggest the Chicago route is the less risky trade.

Hope that's helpful.

This is gold.

[wheatking16]

I typically use the Daily chart for idea generation and then break it down to lower timeframes for my entry and initial stop identification.

Using a lower timeframe that breaks into equal increments of the market hours, as TechAnalyst did with the 60-minute chart, is a solid practice.

The weekly chart was chosen for my idea as I assumed that is applicable to the producer timeframe.

I did, however, use the Daily chart for my entry identification using both the recent relevant low and the Anchored VWAP for my initial stop.

They both lined up well on the Weekly, hence the decision to chart that timeframe.

As the trade progresses, I will move to a lower timeframe, ie, Daily or 1-hour, to raise my stop.

The Daily chart below illustrates that the trade idea was triggered.

Now we are presented with the challenge of maximizing profit while protecting gains.

When and where do we raise our stop?




Exploring the lower timeframe 1-hr chart below, I added the purple Anchored VWAP from the recent low.

Now it gets tricky,

Does one raise their stop to breakeven, increasing the chance of getting stopped out early and missing a larger move?

Does one retain the same stop for the time being providing more opportunity for this trade to work out?

Does one use a lower timeframe and raise their stop below the purple VWAP?

This is the art of trading where the Mona Lisa can quickly turn into a stick man.






The Klarenbach Report
https://klarenbach.substack.com/

Klarenbach Research Telegram Group
https://t.me/klarenbachresearch

[farming101]

Depends how much you dislike margin calls and how far you are okay with going into the red before you bail.
To preserve sanity it may be wise to protect your capital on an initial trade from too much damage. So placing a moderate stop after a favorable gain is wise. Live to trade another day
Percentage or dollar value, something so you have a clear view of your loss limits.

Studying the chart history and analyzing potential will likely reveal what a reasonable exit point could be. Some day traders are content to get out after their objective is reached, no regrets.

A trailing stop that protects a rising percentage of your initial margin, for example, 1.5%, 3%, 5%, 8% and so on can really help take the emotion out of the trade.

Putting on a hedge and lifting a hedge takes a whole different set of rules. Protecting an initial margin is fine but if it is a pure hedge there is a much greater incentive to let losses and gains run. The objective is to set a floor price for your grain in the bin.

Oh and 8.70 basis March should be written down somewhere. It looks like an objective goal. When and if that is reached the world will have changed again

[wheatking16]

I typically use the Daily chart for idea generation and then break it down to lower timeframes for my entry and initial stop identification.

Using a lower timeframe that breaks into equal increments of the market hours, as TechAnalyst did with the 60-minute chart, is a solid practice.

The weekly chart was chosen for my idea as I assumed that is applicable to the producer timeframe.

I did, however, use the Daily chart for my entry identification using both the recent relevant low and the Anchored VWAP for my initial stop.

They both lined up well on the Weekly, hence the decision to chart that timeframe.

As the trade progresses, I will move to a lower timeframe, ie, Daily or 1-hour, to raise my stop.

The Daily chart below illustrates that the trade idea was triggered.

Now we are presented with the challenge of maximizing profit while protecting gains.

When and where do we raise our stop?

[ATTACH]9149[/ATTACH]


Exploring the lower timeframe 1-hr chart below, I added the purple Anchored VWAP from the recent low.

Now it gets tricky,

Does one raise their stop to breakeven, increasing the chance of getting stopped out early and missing a larger move?

Does one retain the same stop for the time being providing more opportunity for this trade to work out?

Does one use a lower timeframe and raise their stop below the purple VWAP?

This is the art of trading where the Mona Lisa can quickly turn into a stick man.




[ATTACH]9150[/ATTACH]

The Klarenbach Report
https://klarenbach.substack.com/

Klarenbach Research Telegram Group
https://t.me/klarenbachresearch

It is nice when they work out.

Up 3%

The stop is raised.

There is no reason to lose money now.

[dalek]

With probably only 30-35% of expected winter wheat acres going in in Ontario due to moisture I think we’ve gained even more on strengthening basis than we have on the board. Glad I got mine all in

[farming101]

It is nice when they work out.

Up 3%

The stop is raised.

There is no reason to lose money now.

Steady as she goes....

[wheatking16]

The purple and blue VWAPs are logical places for buyers to step in.

I like to consider the VWAPs for support and resistance levels.

[Oliver88]

Chicago wheat retraced and now getting a bounce off of the previous resistance.

I anticipate that this will go much higher.

What was once resistance often acts as support.


[ATTACH]9139[/ATTACH]

The Klarenbach Report
https://klarenbach.substack.com/

Klarenbach Research Telegram Group
https://t.me/klarenbachresearch

What’s your definition of “much higher” ?

[wheatking16]

What’s your definition of “much higher” ?

I have levels of interest at

867 13% above original price target

945 23%

981 28%

[Oliver88]

I have levels of interest at

867 13% above original price target

945 23%

981 28%

Assuming Minneapolis goes up with CBOT, a 23% increase in the futures could put HRS above $15.

It should be though considering prices of other crops.

[wheatking16]

Assuming Minneapolis goes up with CBOT, a 23% increase in the futures could put HRS above $15.

It should be though considering prices of other crops.

The Weekly chart of the MGEX and CBOT spread has recently broken the blue trendline from May 2021 and is now below a declining red 10-week moving average (Similar to the 50-DMA on the Daily chart).

While the spread is still in an intermediate and long-term uptrend, the short-term trend has changed.

Will this continue into the longer term?