Oat Futures Sell Signal

[shtferbrains]

I Don't follow oats. But over at NewAgTalk, there is a thread asking what oats knows.

This was one of the responses:
I could argue oats doesn't even know oats. The cash price has actually gone up while the futures price dropped a dollar.

Definently putting a little of the fear element into the market of late.

I guess that would be fear of bears?

[errolanderson]

In the old 'open outcry days' of Chicago grain trading and price discovery, floor traders paid attention to a sudden change in oat futures by the one (1) oat trader standing between two rails on the CBOT floor.

Oats is generally devoid of speculators, a true cash market indication. A canary in the coalmine, so-to-say.

[LWeber]

In the old 'open outcry days' of Chicago grain trading and price discovery, floor traders paid attention to a sudden change in oat futures by the one (1) oat trader standing between two rails on the CBOT floor.

Oats is generally devoid of speculators, a true cash market indication. A canary in the coalmine, so-to-say.

That one oat trader owned a Lear Jet and he didn't stand - he sat off to the side in a chair with hsi arms crossed from 9:25 to 1:20. There were never more than 5-10 oat traders in the open outcry pit and a good chance half of them were carrying his orders. That was then - this is now...

If you believe that Oat futures are indicative of the cash market; what companies use CME Oat futures to price their cash bids?

[LWeber]

Oats is generally devoid of speculators, a true cash market indication. .

May 04, 2021 - Money Managers owned 26.25% of the oats Open interest.

One in four positions were speculative or maybe grain companies hire money managers to hedge their cash oats and export sales ...

[farming101]

There are a large amount of non-reportables positions on in the oats pit

While it is always a bit of a mystery as to who these are because it depends on how you are described in your application to trade they are generally termed as those who hold positions below the level that is required to report to the CFTC and are often small speculators
Also of note is that 4 or less entities hold a significant amount of the positions in the oats pit
That usually means that whenever there is someone who bids a three lot the large holders know who is picking up the tab that evening
Below, Legacy, futures only report from Dec 28. Not sure where the Jan 4 report is?

[Guest]

I took some april $10.75 this morning
It is enough

[LWeber]

There are a large amount of non-reportables positions on in the oats pit

While it is always a bit of a mystery as to who these are because it depends on how you are described in your application to trade they are generally termed as those who hold positions below the level that is required to report to the CFTC and are often small speculators
Also of note is that 4 or less entities hold a significant amount of the positions in the oats pit
That usually means that whenever there is someone who bids a three lot the large holders know who is picking up the tab that evening
Below, Legacy, futures only report from Dec 28. Not sure where the Jan 4 report is?
[ATTACH]9631[/ATTACH]

From a CBOT floor trader circa 1995...
"Gentlemen don't trade wheat
W h ores don't trade oats"

[AlbertaFarmer5]

Thank you to Errol and Larry, and 101, Wheatking, Tech etc. for contributions to a great thread such as this. Real experience, and different perspectives, analysis, all make this site worthwhile.

This is why I come here for. Picking on blowhards like Chuck in other threads is just entertainment to fill in the voids.

[LWeber]

Thank you to Errol and Larry, and 101, Wheatking, Tech etc. for contributions to a great thread such as this. Real experience, and different perspectives, analysis, all make this site worthwhile.

This is why I come here for. Picking on blowhards like Chuck in other threads is just entertainment to fill in the voids.

A little more on the storied oat trader in Chicago...

Jay Homan was a frikkin legend. It is said that if not for him; electronic trade would have occurred 10 years sooner. I was introduced to him by Scott Early, former legal counsel to the CBOT and at the time with the law firm of Foley & Lardner. Scott was still on a retainer at CBOT and KCBOT. If not for Scott, Jay wouldn't have given me the time of day. We had lunch at the CBOT - but in a location where Jay could see the board and the floor. Here are some news clip...google him for more - he was Trading Places long before the movie ever came out.
__________________________________________________ ___________________________________
Jay Homan, a veteran CBOT trader and member, said: “It just feels good to be wanted. It presents one with choices.” - said during bidding war between ICE and CME.

Just days after the CBOT introduced side-by-side trading in its storied grain complex, electronic trading of those contracts, as well as in financial and metals futures, was halted by technical problems, triggering electronic shutdowns at exchanges in Kansas City, Minneapolis and Winnipeg on Aug. 4. “We just kept on trading,” says Jay Homan, a market maker in the CBOT oats pit. Traders were able to use the pit open outcry trading platform at the CBOT, Kansas City Board of Trade (KCBT) and Minneapolis Grain Exchange (MGEX) to execute orders. By offering multiple ways to trade grains, the CBOT has increased security. “We had seamless trade,” Homan says. “Anything mechanical is going to break. It has been a tremendously dependable platform. Those things are going to happen.”

Jay Homan, a CBOT pit broker in the oats market, knows change is coming, But he says he has no plans to become a screen trader. “Guys like me who’ve been down here for 35 years, it’s been a gift from God. We know the markets are changing,” he said. “We’re probably too old to look for a niche. So we’re going to look for a way to exit gracefully and say ‘thank you.’ There are others who are looking ahead to reinventing themselves, finding ways to fit into the new paradigm.”

Because the market is having an extraordinary year like most feedgrains, farmers with cash oats are urged to reward the market. Jay Homan, a independent CBOT oats trader, says normally oats are a $1.50 per bushel crop. On Friday, the CBOT Dec '08 futures contract traded at $4.07 ½. At this time last year, CBOT oats traded around $2.56 per bushel. Homan says the corn market could determine the near-term oats price. CHICAGO, Illinois (Agriculture Online)--Because the market is having an extraordinary year like most feedgrains, farmers with cash oats are urged to reward the market.

Nearby is Jay Homan, an oat broker who hasn't missed a day of work in 26 years--hasn't even taken a vacation. Lately, King and Homan have both started using an electronic routing system to receive orders from trading desks. Though neither cares much for the idea of electronic trading, both admit that more people need to use the so-called electronic clerks if they are to stay in business. A few minutes before the opening bell in the grain room, however, the public-address system announces that the electronic router has broken down: "We have converted all of our firms to paper.... The decision has been made to delay trading until 10 A.M." A few people cheer. "

Best one liners at CBOT: Sending a new runner into the oat pit to ask Jay Homan what the Dec oat/meal spread is.
__________________________________________________ ___________________________________

[errolanderson]

Just reminishing, but if we are talking about characters on the CBOT floor, a standout was floor runner Chris Farley.

His days on the floor weren’t long between working the telephone and hand signaling into the pit and calling brokers back with fills, then working his second job at the 2nd City Comedy troop in the afternoon.

Those were amazing times . . . .

[wheatking16]

A little more on the storied oat trader in Chicago...

Jay Homan was a frikkin legend. It is said that if not for him; electronic trade would have occurred 10 years sooner. I was introduced to him by Scott Early, former legal counsel to the CBOT and at the time with the law firm of Foley & Lardner. Scott was still on a retainer at CBOT and KCBOT. If not for Scott, Jay wouldn't have given me the time of day. We had lunch at the CBOT - but in a location where Jay could see the board and the floor. Here are some news clip...google him for more - he was Trading Places long before the movie ever came out.
__________________________________________________ ___________________________________
Jay Homan, a veteran CBOT trader and member, said: “It just feels good to be wanted. It presents one with choices.” - said during bidding war between ICE and CME.

Just days after the CBOT introduced side-by-side trading in its storied grain complex, electronic trading of those contracts, as well as in financial and metals futures, was halted by technical problems, triggering electronic shutdowns at exchanges in Kansas City, Minneapolis and Winnipeg on Aug. 4. “We just kept on trading,” says Jay Homan, a market maker in the CBOT oats pit. Traders were able to use the pit open outcry trading platform at the CBOT, Kansas City Board of Trade (KCBT) and Minneapolis Grain Exchange (MGEX) to execute orders. By offering multiple ways to trade grains, the CBOT has increased security. “We had seamless trade,” Homan says. “Anything mechanical is going to break. It has been a tremendously dependable platform. Those things are going to happen.”

Jay Homan, a CBOT pit broker in the oats market, knows change is coming, But he says he has no plans to become a screen trader. “Guys like me who’ve been down here for 35 years, it’s been a gift from God. We know the markets are changing,” he said. “We’re probably too old to look for a niche. So we’re going to look for a way to exit gracefully and say ‘thank you.’ There are others who are looking ahead to reinventing themselves, finding ways to fit into the new paradigm.”

Because the market is having an extraordinary year like most feedgrains, farmers with cash oats are urged to reward the market. Jay Homan, a independent CBOT oats trader, says normally oats are a $1.50 per bushel crop. On Friday, the CBOT Dec '08 futures contract traded at $4.07 ½. At this time last year, CBOT oats traded around $2.56 per bushel. Homan says the corn market could determine the near-term oats price. CHICAGO, Illinois (Agriculture Online)--Because the market is having an extraordinary year like most feedgrains, farmers with cash oats are urged to reward the market.

Nearby is Jay Homan, an oat broker who hasn't missed a day of work in 26 years--hasn't even taken a vacation. Lately, King and Homan have both started using an electronic routing system to receive orders from trading desks. Though neither cares much for the idea of electronic trading, both admit that more people need to use the so-called electronic clerks if they are to stay in business. A few minutes before the opening bell in the grain room, however, the public-address system announces that the electronic router has broken down: "We have converted all of our firms to paper.... The decision has been made to delay trading until 10 A.M." A few people cheer. "

Best one liners at CBOT: Sending a new runner into the oat pit to ask Jay Homan what the Dec oat/meal spread is.
__________________________________________________ ___________________________________

This is great.

Thanks for sharing, Larry

[farming101]

Oats continuous chart hit 715 overnight.
Area of interest mentioned by Wheatking16