Daily AMP Sample

This is an actual daily Ag Market Professional newsletter, chosen at random. Note that closed positions are not shown, but entry dates are shown for existing positions. No fuzzy "where did that come from" stuff. New recommendations for the current day are marked by both *** and red text so that you will notice them! The cumulative options positions may appear complicated, but they evolve slowly and are easy to understand when recommended. Short calls and puts are often held for 6-9 months in order to squeeze all the potential profit out of them.

The Ag Market Professional

Ag Market Professional

Brugler Marketing & Management LLC

Phone: (402) 697-3623

December 4, 2008

OUTSIDE MARKETS: The dollar is stronger, with the Bank of England lower interest rates to 2%, the lowest since 1939 for that country. The European Central Bank also cut rates. Gold is down $6.30 to around $766. Energy futures are lower by about a dollar in the crude, which is trading between $45 and $46. The major EU stock markets are up about 1% on the stimulus package. US stock futures are slightly lower.

OVERNIGHT GRAINS: Globex quotes are based on the last trade before suspension in the actively traded contracts. Dalian Chinese futures quotes are based on the highest volume contracts, and converted to US dollars and bushels.

Overnight Markets	Dalian $ Price	Dalian Change	Globex Change
Soybeans	11.78	-0.62	-7 ¼ to -11 ¼
Soybean Meal	321.68	-2.76	-1.50
Corn	5.59	0.00	-2 ½ to -3 ¼
Wheat			-2 ½ to -6 ¼

Chinese soy futures were sharply lower overnight. Cheaper imported beans are dragging down domestic prices, and sliding soy meal and bean oil prices continue to put pressure on crush margins.

CORN: Futures were steady to down ¾ cents on Wednesday. Stability in the ethanol futures helped, as they were down only 0.4 cents. Trade action this morning will be driven briefly by the Export Sales report, but continues to be focused on the US dollar and demand as represented by the world’s equity markets.

Chart Points: Weekly chart support is at $3.08. Overhead resistance is the old support at $3.60 ¼. These apply to the December 2008 contract until expiration. The lower Bollinger Band is minor support on the Dec 2008 chart at $3.20. The March corn daily chart is still in a down trending channel. The main support is at $2.92, with resistance at $4.61. The Bollinger Bands show closer BB support at $3.36 and moving average resistance at $3.76.….. December 2009 resistance is the 18-day moving average at $4.23. The August 2007 low is support at $3.86. The downside count from the triangle breakout is $3.55. We’ll have an SRR on this later today.

Corn Recommendations: 2008 Crop: ---You rolled the long January 380 puts vs. 45% of production to the January 360 strike price (11/25 @ $.26 and $.15 respectively, net of +$.14 on the 380’s). We are looking for a seasonal peak in basis to move additional cash corn protected by these hedges.

2009 Corn Crop: ---You rolled the short March 370 puts to the March 350 strike price (12/1 @ $.40 and $.30 respectively). This is a covered write vs. our long March 400 puts.

***Sell March 420 calls against 25% of expected 2009 production to increase the time decay profile and to help offset the now in-the-money short puts.

---Aggressive hedgers sold Dec 2009 futures vs. another 20% of production on a break below $4.10 (12/1 @ $4.04 open), looking for a retest of $4.00. That has now been met. The new objective is $3.86. *** Set a stop near $4.03.

Feed User Recommendations: None active.

SOYBEANS: Futures were 1 ¾ lower to 3 cents higher, with nearby January the standout bull. Meal futures were up $1.90/ton to support the market, while bean oil slipped 14 points. USDA shows weekly export sales of only 359,800 MT. These were the smallest since September 1, but also include the Thanksgiving holiday. China bought 298,000 MT, but 165,000 of that was a transfer from “unknown” and not a new sale. Meal exports were improved to 106,000 MT.

Chart Points: Weekly chart support at $8.25 was dented. Overhead resistance is the November high at $9.67. The January daily chart resistance is at $8.68, the topside of a descending triangle. Support is at $7.90 ¼, the life of contract low. November 2009 futures still have a downtrend resistance line at $8.88. Support is now the lower Bollinger Band at $8.33. The chart formation is a descending triangle. These usually break out to the downside, and this one appears to be doing so.

2008 Crop Soybean Recommendations: See the November 25 MPT. ---You reduced the short Jan 840 puts to 45% of production (not delta adjusted), matching the long put position (12/1 @ $.28).

---You rolled the remaining short Jan 840 puts to the Jan 800 strike price, leaving more room for the long Jan 860 puts (12/3 @ $.37 and $.19 respectively, net of -$.26 on the 840’s).

2009 Soybean Crop: See the MPT. *** Move your trailing buy stop on the short November futures down to $8.95.

---You bought Jan 840 puts vs. another 30% of expected 2009 production on the $8.45 price trigger (12/2 @ $.30). We now have forward contracts, short futures or a price floor on 100% of expected 2009 production.

Soy Meal: Resistance is at $264.40 for the January contract. Support is the October low at $238.80. No new recommendations.

WHEAT: Prices were lower at all three exchanges, with CHI down 8 to 10 ¼, KC off 8 to 15 ¾, and MPLS down ¾ to 6 ½ cents. The latter got a little help from a Chinese purchase of a cargo of spring wheat, which they do several times per year. The trade is looking for weekly export sales to be in the 350-500,000 MT range. Stats Canada is also due to be released this morning, with traders looking for a small increase in Canadian wheat and canola production vs. the previous report.

FLASH: Actual USDA Export net sales were 206,700 MT, well below the trade guesses and a marketing year low. A cancellation of 45,000 MT from Singapore dragged down the total.

KCBT HRW WHEAT: Weekly chart support is still $5.31-5.33, with the long term at $4.33. A 38% retracement of the sell off since August would be resistance, at $6.95. December futures support and resistance are the Bollinger Bands at $5.36 and $5.99. July futures have trendline resistance near $5.92. Limited support is at $5.62. The formation is now a descending triangle. Those usually break out to the downside.

KC Wheat Recommendations:

2008 Crop: *** Buy back the short Dec futures to get out of the delivery process and bank hedge (actually slightly overhedged) profits. ***Sell March futures vs. the 10% of remaining old crop production.

2009 Crop: We have short July futures vs. 50% of expected 2009 production. ***Exit half of the short July futures if prices appear likely to close above $6.00. Not triggered.

---You added short July futures vs. another 20% of production (12/3 @ $5.68 trigger). --- Cash only marketers increased forward contract sales another 5% on the same trigger (12/3 @ $5.68 July).

CBT SRW WHEAT: Weekly chart resistance is the November high at $5.87 3/4. Support is at $4.96, along with the round number at $5.00. The main thrust of the March downtrend (regression trend) is at $4.87. The 18-day moving average resistance is at $5.43.

CBT Wheat Recommendations: 2008 Crop: ---You sold March 700 calls vs. 30% of 2008 production as a light hedge against the remaining old crop (12/1 @ $.08).

***Cash only sellers should bump up sales to 90% via a March forward contract.

2009 Crop: See the MPT. ---You sold July futures against 30% of production (12/1 @ $5.54 or better). We’re short hedged on another 20% from October.

MGE HRS WHEAT: Weekly chart support is at $5.85 ½. The overhead gap at $7.02 is the resistance/upside target.

MGE Recommendations: 2008 Crop: ---You rolled the short December futures vs. 20% of production to the March futures (12/2 @ $5.87 ¼ and $5.89 ¼. The net gain was +$.52 ¾ on the Dec 2008 hedges).

2009 Crop: See the MPT. ***Buy March 580 puts vs. 20% of expected 2009 production on a Turnaround Tuesday bounce of 10-15 cents. This was not triggered on Wednesday.

LIVE CATTLE: The board continues to struggle, down $.875 to up $.10. The wholesale market turned ugly yesterday, losing $2.66 in the choice and $2.26 in the select.

Chart Points: Weekly chart support is at $83, last week’s low. Initial resistance is $87.85. Last week was a harami on the weekly candlestick chart. Only the Friday close will determine the outcome of the formation. December futures resistance is the 38% retracement at $87.50. Support is at $83. June is retesting the contract low at $81.70. Resistance is the recent high at $85.97.

Cattle Recommendations: ---You rolled the long June 90 puts vs. 50% of May-June sales down to the June 86 strike price, banking the profits while maintaining protection against a retest of the low. (11/25 @ $8.30 and $5.75 respectively, net of +$3.20 on the 90’s).

---You rolled the long Feb 94 and Feb 92 puts down to the Feb 90 strike price, maintaining a price floor while banking gains to date (12/1 @ $8.20 and $6.60 on the sell and $5.20 on the buy. Net of +$2.70 on the 94’s and +$3.00 on the 92’s).

***Roll the short April puts down to the April 82 strike price. There was no volume in the April 82’s.

Cattle Crush Spreads: See the MPT. Our only current position is for January placements.

FEEDER CATTLE: Lower cattle continued to weigh on feeders, which were down $.15 to $1.05. The CME Index dropped sharply to $92.29 from $94.36. This applies to January futures.

Chart Points: Weekly chart support is now $89, as the switch to the January 2009 contract took out the Jan 2007 low at $92.10. The weekly parabolic indicator is still bearish. March futures posted a new life of contract low yesterday.

Feeder Cattle Recommendations:

Feeder sellers: ---You rolled your long Jan 96 puts down to the Jan 92 strike price ($6.00 and $4.00 respectively, net of +$1.50 on the 96’s). ---You rolled the long March 96 puts down to the March 94 strike price to take some money off the table while maintaining the 3-way spread (12/1 @ $7.50 and $6.25 respectively. Net of +$2.50 on the 96 puts).

---You bought April 90 puts vs. 100% of expected April feeder sales (12/3 @ $5.50).

*** Now that you are in the puts, sell April 100 calls and April 80 puts against that position, creating a 3-way spread. There was no volume in these two strikes on Wednesday, so we can’t consider them active yet.

Feedlots: ***Buy Jan 92 calls vs. 100% of expected Jan placements not covered by the cattle crush spread, but only if the CME Jan futures appear likely to close above $91. Not triggered.

LEAN HOGS: The short covering party is clearly over for the moment. The CME was down $.80 to $1.40. The supply/demand balance in pork continues to be pretty good, with wholesale up another $1.32 yesterday to $60.96.

Chart Points: The 1/3 speedline is resistance for the weekly hog chart, at $59.75. $61.77 is a 50% retracement of the decline from September to November. Weekly chart support is at $53.90. June futures have resistance at $81.90, an overhead gap. Support is the 18-day moving average at 80.72, but if that fails a drop to the lower BB at $78.55 is in the cards.

Hog Recommendations:

---Aggressive hedgers bought December futures above $58 (11/26 @ $58.02). ---You were stopped out at $58.25 (12/2 @ $58.25, net of $+.23). ---You rolled the long Feb 68 puts down to the Feb 62 strike price (11/28 @ $3.50 and $1.20 respectively). ----You exited the short April 76 calls (11/26 @ $2.80, net of -$.70). ---You sold Dec 54 puts vs. 100% of expected marketings (12/1 @ $.025). This was not the price we had in mind, but we’re now out of the long Dec 54 puts and instead short vs. 50% of expected marketings.

*** Roll the long April 80 puts down to the April 70 strike price to bank hedge profits while maintaining downside coverage. There was no volume in the April 80 puts on Wednesday. Repeat for today.

---You sold June futures to hedge the first 25% of expected May-June hog marketings (12/3 @ $81.40 open). ***Add short June futures vs. another 25% if prices are below $80.45 after an hour or so of trading.

There is a substantial risk of loss in futures & options trading. Past results are not necessarily indicative of future results. Entry prices shown in the positions are actual trades as shown on an OptionVue 5 software platform that met the criteria of the advice, but must be considered hypothetical because not all readers may have been able to be filled at those prices. This information is from sources we believe to be reliable, but errors are possible. Actions taken based on this information are the responsibility of the reader. Call if you have questions!

THERE IS A RISK OF LOSS IN FUTURES AND OPTIONS TRADING. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INDIVIDUALS. ANYONE ACTING ON THIS INFORMATION IS DOING SO AT HIS/HER OWN RISK. CONSULT THE FUTURES AND OPTIONS RISK DISCLOSURE STATEMENTS YOU SIGNED WITH YOUR BROKER BEFORE TRADING. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.