Common Sense Pattern Report

Common Sense Pattern Report

For: Thursday, May 16, 2008 .....Last updated: May 15, 4:30 P.M. EDT...more to follow
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-BROKERS CHOICE-

The Brokers Choice may or may not abide by all the rules laid out within the CSC course. Any suggested trades are drawn from the experience of the brokers. C$C takes no responsibility for changes made to trades if you are not a C$C client.

Buy Dec Minneapolis / Sell Dec Kansas City Wheat - WINNER

Thursday May 15, Settled at 30 1/4. We took a nice 15 cent profit at 30 today.

Entry: 15 or better

First target: 30

Risk: 7 SCO not held

Margin: $2573 initial / $1950 maintenance

Rationale: Improved weather conditions should get some moisture in some of the dry areas of the hard wheat belt and later harvest pressure should allow spring wheat to gain ground over hard red winter wheat.

The entry, target, and risk prices are subject to revision before the grain markets open on May 1st. We reserse the right to hold off, cancel, or exit this trade for any reason.

Bull spread soybeans - Buy Nov '08 soybeans / Sell Nov '09 soybeans

Thursday May 15, Settled at 28. This spread approached our initial target just yesterday. We had an opportunity to enter at 25 today but given today's price action we're holding off.

Friday May 9, Entry: 25 or better
1st target: 45
2nd target: 55 to 65 or better
Risk: 6 cents not held
Margin: $2025 initial / $1500 maintenance
Rationale: Shrinking global soybean stocks, strong crude prices, weather risk, and the recent tendency of the USDA to underestimate final US soybean demand. are also supportive. '08 beans should gain ground over '09 beans. We reserve to right to hold off, cancel, or exit this trade early for any reason.

Corn / Wheat spread

Thursday May 15, Dec wheat settled at 803 1/2 up 4 1/4.

Wednesday May 14, Dec wheat closed at 799 3/4 down 31. We have a stop in at 826 on the short December wheat.

Tuesday May 13, We exited December corn at today's opening and effectively exited this spread at -209 1/4 or so. This represents a profit of 67 1/4 cents or $3362.50 per spread. The Dec corn 700 call settled at 50 1/4 while the Dec wheat 1300 call settled at 12 for a net gain of 31 1/4 cents

Monday April 21 - The Dec corn 700 call settled at 50 while the Dec wheat 1300 call settled at 32 1/2 for a difference of 17 1/2 cents. This afternoon's planting progress report shows corn significantly behind pace. We've revised our entry, risk, and target prices for the corn / wheat spread.
Thursday April 10 - In early trading we bought the Dec corn 700 call at 50 and sold the wheat wheat 1300 call at 43 for a net debit of 7 cents. Previous strategy: Synthetic corn / wheat spread: buy Dec corn 700 call / sell Dec wheat 1300 call; Entry: 10 cent debit or better; Target 50 cents
Buy Dec corn / sell Dec wheat
Margin: $5670 / $4200
Entry: -276 or better
Target: -150
Risk: -320 not held
Revised rationale: Although corn has gained a lot of ground against wheat in recent weeks, wheat is still trading at far above historical norms. Wet weather has put corn behind it usual planting pace we feel that corn will continue to gain ground against wheat. For space considerations the charts will be presented in the Radar Screen below. We reserve the right to cancel, hold-off, or exit this spread early for any reason

Long Dec / Short July cotton

Thursday May 15, An interrupted session settled at 8.72 today.

Entry: 7.25 or better
First Target: 10 (This represents a gain of $1375 from an entry at 7.25.)
Second Target: 13 (This represents a gain of $2875 from an entry at 7.25.)
Risk: 6.31 on a not held basis (This represents a risk of $470 from an entry at 7.25.)
Margin: $420 initial / $300 maintenance
Rationale: July cotton tends to be seasonally weak during April. The recent US prospective planting intentions report suggests that cotton isn't going to loss many acres to corn or soybeans. However, record prices for rice could still reduce Chinese cotton acres. This could be supportive for deferred cotton. The seasonal tendency of this spread suggests that it should widen out over the next couple of months. This should be a slow moving, low margin spread that could work well in the "background" of your commodity investment portfolio. We reserve the right to cancel, hold-off, or exit this spread early for any reason.

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