Watchlist

Seasonal spreads are looking a little on the sleepy side at the moment. Grains are really getting very volatile at the moment as concerns over cold weather causing planting delays in corn and frost hurting wheat yields, seem to be dictating the action.

I've been heavily into energies recently with classic seasonal trades going into the traditional shoulder months for energy use and also increased gasoline demand headed into the driving season.

For now I'm just watching some more technical plays. Sometimes spreads can drift and get a jump as they head toward the end of a seasonal window.

Live Cattle/Lean Hogs

I'm somewhat bullish fundamentally on Hogs at the moment but like I said this as more of a technical trade.

Cotton

Cotton is generally quite a wild one to trade so it's best to work an order rather than chase. That said I like parity as a kind of pseudo support level and this one seems to be nicely positioned for a potential move in this bear spread. Fundamentally we need to be a little careful as weather is again playing its part. Plantings are currently at 14% compared to 20% traditionally on the back of weather issues. Again this was very much a technical trade.

Live Cattle

We were watching this one the other day and literally the following session saw a move our way. I felt working an order at 1.0 was a good play but it never traded at our price.

Soybean Meal/Oil

This one is more of a fundamental play. Soybean meal has taken off over the last week and we have seen some real strength. Soybeans look to be turning a corner as crush margins improve and supplies continue to be tight. I like this one if we can grab it on a pullback.

The market is watching a couple of key factors this week which really dictate the action. There's a Kansas grain tour that will be happening from Tuesday that will be giving traders a better indication as to any recent frost damage in wheat. And all eyes are on the weather regarding corn plantings. The consensus is that May 10th is the cut off date to have crops in the ground before we start seeing yield losses. If cold wet weather persists farmers are likely to switch more acres to soybeans which are able to be planted later.

It certainly looks like a big week in the grains.