China Boosts Soybean Prices - 3 Commodity Trades To Watch

Philip Davis profile picture
Philip Davis
66.56K Followers

Summary

  • Our May 10th Soybean trade gained $3,1750 per contract for our SA readers - you're welcome!
  • Our ETF play is only up 400% and can still make 86% more by November.
  • Two more commodities we like going forward.

Trade on!

That's right, now Donald Trump claims he was "surprised" when Treasury Secretary Steve Mnuchin asked China's trade delegation to cancel a scheduled US Farm Tour. That was the cause of Friday's sell-off as the Chinese delegation packed up their toys and went home early and was taken as a sign that negotiations had broken down but now the Administration says that's not the case and that the Chinese were rushed home so they could buy our agricultural products rather than visiting the farms first.

Despite all the BS, we couldn't be more thrilled as we called Soybeans (/ZSU19) Sept Futures a long way back in our May 10th Morning Report at $825 (published at Seeking Alpha) and those contracts popped to 888.50 and October Soybean contracts are now $895.50. Soybean contracts pay $50 per $1 move so $63.50 for our 10 September longs is a lovely $31,750 gain - you're welcome!

For the Futures Impaired, we also had the following trade idea on the Soybean ETF (NYSEARCA:SOYB) that runs into November:

As to SOYB, it hasn't been this low since, well, ever - as the contract began in 2012 at $25 and never really went below $17.50 until the trade war began so $14.50 is quite a bargain and, as much as I hate to bet on Trump doing anything right, it's POSSIBLE we get a trade deal and that will hurt our hedges in the Short-Term Portfolio so, in order to hedge the hedges, a bullish bet on SOYB makes sense. For the STP, we can:

  • Buy 50 Nov $14 calls for $1.10 ($5,500)
  • Sell 50 Nov $15 puts for 0.95 ($4,750)

That's net $750 and, if SOYB goes back to $16 on a trade deal, those options will be worth $1.50 each for $7,500 on 50 100-unit contracts, which would be a

This article was written by

Philip Davis profile picture
66.56K Followers
Philstockworld.com is the fastest growing stock and option newsletter on the Web. "High Finance for Real People - Fun and Profits" is our motto and our Basic and Premium Chat Sessions offer readers a chance to speak to Phil live during the trading day as well as authors like Optrader, Sabrient, Income Trader and Trend Trader - who send out Alerts during the market sessions and discuss trade ideas live with Members. We even have a new low-cost "Trend Watcher" Membership that lets readers view our chat sessions without directly participating a great solution for people who want to test-drive the site and profit from our experience! Trend Watchers get to view all of our Chat Archives, weekly Webinars - as well as the amazing PSW Wiki, which gives you Phil's recent opinions and trade ideas as well as technical and fundamental analysis of hundreds of stocks that we follow. Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

Disclosure: I am/we are long SOYB, JO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Positions as indicated but subject to RAPIDLY change (currently mainly cash and an otherwise slightly bearish mix of long and short positions - see previous posts for other trade ideas). Positions mentioned here have been previously discussed at http://www.Philstockworld.com - a Membership site teaching winning stock, options & futures trading, portfolio management skills and income-producing strategies to investors like you.

Recommended For You

Comments (9)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.