KC Wheat possible long!KC Wheat could be forming a midterm bottom! Bullish divergences and reacting at key support levels. Set your alerts!
KEZ2024 trade ideas
KC Wheat possible long!KC Wheat could be forming a midterm bottom! Bullish divergences and reacting at key support levels. Set your alerts!
Just look at this!Kansas City Wheat and Live Cattle charts looking scary similar. Hope all you cowboys out their are hedging a few years out at these prices.
It’s trading wheaty (pretty) high now...Continuing the topic of spreads between related commodities, the Hard Red Winter Wheat – Soft Red Winter Wheat spread is another one trading at an extreme level now.
A brief explanation on the different types of wheat we are referring to here:
1) The Hard Red Winter Wheat (HRW) is the most widely grown class of wheat. A high protein product, used for breads, some types of Asian noodles and general-purpose flour.
2) The Soft Red Winter Wheat (SRW) is the third largest class of wheat variety grown in the US, lower protein wheat used in producing confectionary products such as cookies, crackers, and other bread products.
Generally, the HRW Wheat Futures (KE) trades at a premium to the SRW Wheat Futures (ZW) due to the higher protein content, however other factors such as production levels and supply demand dynamics may disrupt this spread, as seen from the wide range it has been trading since 1977.
Currently, this spread is trading close to 132 cents, with only one instance where it has traded higher, which was in March 2011 when this spread reached an all-time high of 164.
We attribute the spread trading at a high now due to the following 2 reasons:
1) The 2022 HRW production is currently the lowest on record since 1963, due to widespread droughts across many of the HRW production regions.
2) The average protein content of the 2022 yield is higher than last year, as well as the average of the past 5 years, resulting in a higher quality crop.
As a result, HRW is trading at a premium as supply shortage and a higher quality product pushes the price higher, while SRW sees average production and quality.
While it is challenging to assess the production levels and quality for the next season, from a risk reward perspective, we see an opportunity here. The past few spread peaks have been clearly marked out by Relative Strength Index (RSI) pointing oversold. With the 10-year average for the spread at 6.3 cents and the RSI now oversold, we lean bearish on the spread.
Referencing the average of the past 3 declines at 150 cents and lasting 511 days, we could set out trade levels.
If the historical pattern holds this time, a conservative target of 120 cents and a trade length of 500 days points us to the 15-cent level. We see the current set-up as an opportunistic one, with similar episodes in the past pointing lower. CME also has the synthetic KC HRW Wheat-Wheat Intercommodity Spread, which can be used to express the same view and is financially settled.
The charts above were generated using CME’s Real-Time data available on TradingView. Inspirante Trading Solutions is subscribed to both TradingView Premium and CME Real-time Market Data which allows us to identify trading set-ups in real-time and express our market opinions. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Disclaimer:
The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
Sources:
www.uswheat.org
www.cmegroup.com
www.cmegroup.com
www.usda.gov
KE! may have a little bullish momentum - Cryptoz18❶ Warning
Operations in the Blockchain or FX market represent a high risk. Cryptoz18 is a content creator who posts his ideas for viewers however he never provides an investment recommendation. I recommend to the reader a good risk management and knowledge regarding the environment. Thank you very much.
❷ Tutorials
➤ Here you can find a brief explanation of how the operations work in case you are interested in following them.
➤ Here you can find an explanation of how to track our ideas:
✔️ Our operations are taken with StopLoss and Take Profit of 15 minutes. However, we are looking to try and catch a 4H trend. So, once we touch the TPM according to your own analysis you should consider whether to close the trade or move StopLoss to entry.
❸ Summary
First I have to open my trades on Binance, if not then I don't have time. Sadly it took me a long time and a lot of the movement just happened, if it doesn't go back to that entry consider changing the setup settings.
❹ Operational Information
• Entry price: 879.750
• StopLoss: 838.500 (Loss 4.69%)
• TakeProfit Minimum: 919.625 (Win 4.53%)
• Recommended margin: 5% of the Futures account
• Recommended leverage: 1x.
• Temporality: 15Min - 4H
Lest we forgetHas the wheat market been forgotten? With wheat prices almost back to early February levels, right before the start of the Russian-Ukraine conflict, markets seemed to have erased all fears of a tightening wheat supply due to the conflict.
The recent selloff in wheat partially stemmed from the market belief that the situation in Ukraine is improving and that exports will be resuming. But with today’s news of missile strikes at Ukraine’s Odesa port, which serves as one of the main port for grains export, we think that the narrative for wheat is about to turn around with further fear and supply tightening on the horizon.
Looking at the chart, wheat is now sitting on a long-term resistance-turn-support level around the 850 mark. RSI recovered from deep oversold territory and is now grinding back upwards. On a shorter timeframe, we also see a falling wedge, which is seen as a bullish signal.
The combination of markets over-correcting to pre-conflict levels and bullish signals from current technical indicators provides a buying opportunity as we head into another period of uncertainty for wheat.
Entry at 842, stops at 752. Target at 1000.
Disclaimer:
The contents in this Idea are intended for information purpose only and do not constitute investment recommendation or advice. Nor are they used to promote any specific products or services. They serve as an integral part of a case study to demonstrate fundamental concepts in risk management under given market scenarios.
Buy July Kansas City wheat market 1st TP @12.30 Stop @11.18Buy July Kansas City wheat market 1st TP @12.30 Stop @11.18
**Trading commodity futures and options involves substantial risk of loss.
The recommendations contained in this letter is of opinion only and
does not guarantee any profits. These are risky markets and only
risk capital should be used. Past performance is not indicative of future results**
hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown. in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.
one of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. in addition, hypothetical trading does no involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. there are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results.
10 yr KC Wheat potential10yr KC Wheat outlook: Potential course of the KC Wheat market for the next 10 years. Overall the Wheat chart takes a more gradual incline up over the past 50 years but when the market gets spooked, prices can rally in a violant way. After this market tops, I feel the World’s supply and demand fundamentals of all Ag Commodities could support a more gradual transition lower for wheat if food security and shortages remain elevated. The market should remain very sensitive for another few years. Sensitive to world demand and production misses across the globe. There are many climate cycles coming ahead that could add to potential Ag production shortages. Wheat is used for food, Corn and beans have other purposes that could influence more volatile markets ahead for them…
**Not a prediction, something to watch**
KC Wheat Rate of Change PotentialKC Wheat – 3mo Continuous: Comparing our current Bull market with the previous major bull markets of the past 50 years. Currently the 24 mo ROC high was set in March at 225% with a price of 12.99. If KC Wheat is to match the 06-08 ROC of 275%, then that would project a price of $15.00
**Disclosure** Do not take this as trading advice. The potential is there for higher markets, but anything could keep us from getting above today’s High.
KC Wheat - Weekly continuousUsing the low to high retracements, KC Wheat is currently finding consolidation of support in the 10.20 area. Below 10.00, lower targets remain at 9.56 and 8.62. Volume based risk down at 8.07.
If we can confirm the recent low at 9.93 I will draw upside retracement targets. For now resistance above at 10.75 to 10.95.
KC Wheat Cont KC Wheat - Weekly: Some indecision the past few weeks with price action working above the Blue Tenkan and below the red Kijun lines. Upside targets remain at 8.75 to 8.92. A breakout above the 8.92 high has targets up to 9.84. Support is 7.43 with further retracements at 7.07 and 6.51.
$KE1! Wheat OVER $9 in March? Potential for $10?Hi Folks,
Wheat has entered a bull run with a 50/200 ema golden cross as well as a 100/200 ema bullish cross for the first time since 2010! The prior run was from 2010 to 2016. Bearish from 2016 until late 2020 where we first see some bullish crossings. These stages tend to last anywhere between 4-6 years so we should see some continuation.
As far as the technical movement goes, we can tell that wheat likes to flag into the 21-day ema and sometimes into the 50-day ema before continuing. Yesterday, price fell below the 21-day ema and today it reclaimed immediately; this is exactly what we wish to see in healthy upward movements.
Needless to say, at this point you can tell I am bullish on wheat (and commodities in general) for the foreseeable future. What say you?
Continuous KC WheatCont KC Wheat - Weekly: Retracements on the Left are from the 08’ High and the 19’ Low. Keep an eye on them on this trend up.
The current leg has us between the 8.92 pivot and the 7.81 pivot. A move lower will look for support at the red Kijun line around 7.35.
A move above the 8.92 high would next target a leg higher to 9.61…
Continuous KC WheatCont KC Wheat - Monthly: New highs recorded this week within .04 of a 38% retracement target off the 2008 high and the 2019 low. Should KC Wheat decide to move higher yet, the 50% target is a $1.50 higher at 8.87. WOW, it sure seems like a mile to get there but as you can see on the monthly chart, when wheat decides to move it usually does in quick regards.
Support is the blue Tenkan line at 6.70 with further risk down at 5.73
Continuous KC WheatCont KC Wheat - Weekly: The recent correction lower found support against the blue Tenkan line. Targets above can revisit previously filled objectives. A new high would push targets at 7.62, 7.85, 8.08 and 8.42….
Support at 6.70 and 6.55
Sep 21 KC WheatSep KC Wheat – Weekly: A bounce off the cloud last week and follow through to the upside so far this week. The first hurdle was the 24% retracement at 6.17. Resistance at the red Kijun line currently at 6.56 would line up with the 38% and 50% retracement targets. Plenty of volume in the 6.20 to 6.50 price range. This could offer support for a trading range for a few weeks, but there could be some buy stops above 6.70-6.80 area. A move above could offer a quick strike up to the first primary target at 7.26. Support will be the uptrending cloud and then down to the recent swing low at 5.78. Further risk would be 5.45, 5.16 and then 4.95
Continuous KC WheatKC Wheat – Weekly Cont: Currently led by the Sep contract. KC wheat slid hard after filling the Primary target at 7.41. Using the swing low at 5.78 to base updated targets from, 6.40 and 6.59 will be the initial hurdles to jump over in search of the 7.06 and 7.22 targets. Support is 5.78, 5.52, and 5.31
KE1! Continuous KC WheatKC Wheat – Weekly Cont: The primary target was filled at 7.41. Now the Sept KC wheat is leading the continuous chart lower.
The 5.53 swing low will be a key risk area moving forward. Resistance is at 6.47 and then 6.65
Long WheatReversal of trend...look to see if can b/o above .5 fib ret lvls
-stop loss @ 580'6
-long @ 586'4
July21 KC WheatJuly21 KC Wheat – Daily: Trend based extension Targets: Base low, to swing high, to swing low.
Volume increasing in the 5.95-6.12 target range.
Targets above at 6.30, 6.54, and 6.69.
Volume Profile is showing Point of control at 5.72 and will act as support. Risk below at 5.40
KE-ZW (Kansas-World Wheat) Spread; A Long for $0.60-$1.20!!This spread was a career-ender for many wheat brokers/traders - large and small(!!) - in the past 2 years!!
Throughout history, this reverted from -$0.40 right away but not this time and so even pros rode their entire account/capital into the ground, to $0 or worse! (Just a gentle reminder that futures trading does involve risk - in case anyone was still confused before this happened. :-)
One is likely looking at a major turn here, in progress, probably good for $0.60-$1.20 (or about +800%-1000% in 2-3 years).
Make this your 401K?!...
