The latest commentary on the recently released jobs report from John Payne, Senior Futures & Options Broker with Daniels Trading in Chicago.
Q1 2021 hedge fund letters, conferences and more
April's Jobs Report: A Huge Miss
"Payrolls data was just released, and it was a huge miss. Traders were expecting nearly 1 million jobs created, and we got 267k. Something is afoot. The good news for bulls is that this kind of data gives the FOMC the green light to keep policy easy. This is also bullish commodities."
"We are back in a world (2009-2012) where good economic news is going to spook folks in risk assets into believing the cost of capital is going up and/or the possibility this infrastructure package is not needed. So, if you are bullish tech stocks and crypto, you are in the camp that is rooting for bad data."
"Treasury Secretary Janet Yellen will give a press conference with the White House press secretary today at 11:30 a.m. EST. I don't think it matters much for grains and oilseeds, but macro-driven risk markets should react as they did a few days back if Yellen would mention anything about interest rate hikes."
"USDA WASDE will be released next week. Given the parabolic nature of the Dec. 21 corn markets, producers and novice board users (experts as well) should be looking at puts. Obviously the news flow is bullish, weather is supportive and momentum is up. But the USDA has been known to pull rabbits out of its hat, and no one should be shocked if they do it again this time. Nothing they do must make sense."
Strategies For December Corn Futures
"There are two strategies I would look at as a novice, a put or a put spread. If you are more sophisticated and/or open to more risk there are many more. But lets focus just on the strategies you can put on and walk away without any fear of margin call. These strategies apply for all markets, but I just focus on corn."
"The CME offers different time frames for December corn futures for folks who do not wish to buy as much time, through Short Dated New crop options. These exist in beans and wheat as well. Remember, these options are basically insurance contracts on price. Just like in any insurance contract, you pay more for more time."
"Drought remains a concern out west. Producers in the Ohio and Tennessee River Valleys are dealing with too much rain and planting delays are starting to concern. This is where early soybeans would come from."
"With December corn carving through 6 and new crop 2022 through 5, Dec 2021 and Dec 2022 cotton are cheap. I think you must be buying calls or outright spec longs given the weather."
