Soybean Planting Season Opens Door for Option Writers




Soybean Planting Season Opens Door for Option Writers

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(Video Transcript)

May 5, 2017 Update

James Cordier

Good afternoon. This is James Cordier of with a market update for May 5th. Coming into 2017, we were slightly over-weighted in precious metals, energies, and short coffee. Both seasonal factors and fundamental factors that we’ve been following, especially a slight weakening out of China, has caused these trades to go quite well for portfolios, so far, in the beginning of 2017. We have a bit of a rotation right now.

As you look at your accounts and your positions that we send you once a month, you’re going to notice that our precious metal position has now dwindled because of a great decay on options that we were hoping for. Likewise in crude oil and in coffee. The rotation in May and June is going to be more of a short position in grains. Anyone who has followed seasonal factors that we talk about from time to time, the grain market usually rallies in May and June only to look at plentiful supplies in September and October.

Argentina and Brazil are in the process of producing record amounts of soybeans and, here in the United States, we’re going to be doing the same. We recently rotated out of some of our positions that have done extremely well for us so far in 2017. Into a short position in soybeans, we think that there will be plentiful supplies come this fall and we think that the calls we’ve sold quite highly recently are going to do very well.

Natural gas is another market that we’ve been rotating into. Natural gas, of course, the supplies are plentiful. The market right now is trading around $3.00-$3.50. Here in the United States, the Permian Basin is producing record amounts of natural gas each and every single month. They’re producing natural gas for about $0.90 per million BTUs. We are short that market from approximately $6.50. We think we rotated into the correct market.

We hope to see good returns both in the second and third quarter of this year. We see very good opportunities that we’re into right now and expected to be in coming in the next 30-60 days. We hope to see nice profits and potential return from the positions we’re in going through the rest of the second and third quarter.

Anyone wanting more information from can visit our website. If you’re not already a client and wish to become one, you can contact Rosemary at our headquarters in Tampa about becoming one. As always, it’s a pleasure speaking with you and looking forward to doing so again in 2 weeks. Thank you.

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