Index and grain option expiration totally acted manipulated and fixed.
Grains "HAD" to fall to the next lowest strike to wipe out recent buyers.
Index "HAD" to do nothing to likewise wipe out Thursday buyers.
JUST wished I had the power to black swan those bas....
Our grain originator wanted us to get out of our long positions today.
I decided to ride the weekend out, might not be the right thing.
tjc,
I know that one of your preferred vehicles for trading is being long options, especially call options but to make money consistently by just buying options, you must be an even better trader to much better trader than somebody that just trades futures and much MUCH better trader than somebody that sells options.
Just using statistical studies, all of them provide the compelling evidence of this:
https://www.investopedia.com/articles/optioninvestor/03/100103.asp
"Three key patterns emerge from this study: (1) on average, three out of every four options held to expiration end up worthless; (2) the share of puts and calls that expired worthless is influenced by the primary trend of the underlying; and (3) option sellers still come out ahead even when the seller is going against the trend"
I know that you guys, especially tjc who is an authority, understand options but here's an article explaining them to newbies:
https://www.thebalance.com/should-you-trade-futures-contracts-or-options-809157
tjc,
You have a knack for picking market turns, especially bottoms in markets with skill.
I realize that there is great risk in putting on a position like this, especially when its one that is based on a trend change, involves greater risk than usual vs following the trend but days like today, as you alluded, are not unusual...........options expiring at the price that causes the greatest amount of them to expire worthless.
Often with spikes up to make a huge amount of puts worthless or especially down, to make calls worthless, like today...............then bouncing back the next trading session in a move that would have netted the the holders of those options(long) a nice profit if they had not just expired.
Very frustrating for those long options, very profitable for those short options.
The frustration is picking darn near the optimum time, 840 cst Thursday, purchase the calls, then have a superb close, then "magically" forces press market gradually lower all day option expiration day.
I hope their legs grow together.
NO DOUBT HIGHER SUNDAY NIGHT
If it is higher on Sunday Night, it won't be from the weather.
The weather is bearish.
A new pattern is taking shape right now and will be in force this week, into the following week.
1. Excessive rains will be over
2. Wettest areas will have net drying(not completely dry)
3. There will still be rains from average to above in most areas............a pattern that shuts off the rains completely will turn bullish real fast..............this is not such a pattern but there is a chance that the modest heat ridge in the N.Plains could morph into something like that.
4. It's been too cool for much of the Midwest to catch up on growing degree days..........temps will
be above average to average the next 2 weeks but no extreme heat.......almost perfect.
5. Unusually cool weather could be construed as bullish if the market wanted to spin that as slowing down development.............there is no unusually cool weather in this forecast.
There isn't even 1 bullish weather item in the forecast above. If the market wants to rally on old bullish news from planting issues, it has plenty of ammo but there is no new bullish weather news.
If planted acres are way, way below what the market is trading, it can still go higher without new bullish weather news. This is unprecedented, so making assumptions on previous weather and previous markets could mislead.
I just can't be long when the weather is flat out bearish.
WIth regards to beans, drying out will still allow more beans to get planted.
Tomorrows crop condition report is going to be another huge one. It might be more important than the weather forecast. Still alot of beans are not planted in the Eastern Cornbelt and MO/KS. . Then the USDA report on Friday that gives us acreage estimates. A surprise in one direction could give us a lock limit move.
This is not your typical............just go with the weather forecast in late June market.
We filled some gaps higher last week that almost always suggests they were exhaustion gaps, so technically this is a sign that the highs are in.
However, we also broke out to the upside on other indicators and funds have decided that they want to be long corn, so they could keep things going higher without much trouble now, since alot of the hedging/selling pressure from producer selling was gobbled up over the last month.
Another question is if we have completely killed demand at these prices. We have not been selling any corn this month.
https://apps.fas.usda.gov/export-sales/highlite.htm
If the rest of the world has corn prices much cheaper than us, prices will struggle with no demand.
Also, cash prices in the Eastern Cornbelt are at record high basis levels because of the disaster crop there. Will much higher cash prices there pull up the July as it approaches expiration???
We opened lower on bearish upcoming weather, which was also traded on Friday, I will guess but held key support and have had good strength the last several hours in both corn and beans from the underlying bullish supply situation and permanent losses that can't be reversed(but won't get worse from the bearish weather ahead).