Time to Buy Corn?

Featuring Shawn Hackett

Shawn Hackett, president of Hackett Financial Advisors, discusses why he’s bullish on corn futures. He explains the technical and fundamental catalysts behind the trade in this interview with Justine Underhill. Filmed on June 4, 2018.

Published on
7 June, 2018
Topic
Food agriculture, Commodities
Duration
8 minutes
Asset class
Commodities
Rating
11

Comments

  • JM

    Jason M.

    12 6 2018 05:46

    2       0

    Shawn is smart and experienced. Learned from John Roach - famous in the US farming and grain trading community. Corn is a crowded trade and the catalyst here is not near-term. Hence, his recommendation for Dec 2019. Like the idea in general but I think you can get these cheaper down the road. China still drawing down huge inventory. US production more than fine this year. South American currency devaluations not helping making beans cheaper than norm.....if u are entering here (around 410) you better hope for a major USD drop or Russian wheat weather disaster causing chain reaction across the grains. the fact we have 200+ punters with there thumbs up and 10 down shows you where we are in risk tolerance in markets. Corn futures are 13:1 leverage people. The CORN ETF is going to kill you on roll and so a move to 5 won't get you as much as you fast money guys all expect.

    • JM

      Jason M.

      19 6 2018 04:38

      2       0

      Did more work on the China import story. They are backing off of ethanol time-line and possibly shrinking the objective. They did draw down stocks somewhat but this idea has to be modelled with modest ethanol assumptions and then looking at the feed demand in China vs. their crop output. corn is double the price in China vs US even now after falling somewhat. you would think this would still incentivize plenty of supply?

  • SB

    Soham B.

    11 6 2018 03:44

    4       0

    bring the old music back please (we loved to hate it)

  • KB

    Kirk B.

    8 6 2018 19:54

    4       0

    Thanks RV for the concise segment on an ag commodity, corn. It would be great to have a Deep Dive interview with a knowledgeable investor in ag commodities. With stock and bond financial markets at highs, it would seem wise for investors to learn more about alternative real Investments, such as agricultural commodity markets.

  • MM

    Michael M.

    8 6 2018 08:29

    0       0

    stop loss is too tight

  • SH

    Syed H.

    8 6 2018 05:03

    3       0

    CORN is $17 + ! Now what?
    Nice intro. Great content.
    Underhill rocks.

  • CH

    Colin H.

    7 6 2018 23:56

    0       0

    I'm long corn but also short oil right now.

  • JW

    Joel W.

    7 6 2018 20:05

    6       0

    I’ve gotten so used to skipping the first 30 seconds of these videos (because of the music) that I had to go back for a listen after reading the comments!

    ThankYouThankYouThankYou team RV for changing the intro music. Now I can just hit play and focus on the content.

    Oh, and thumbs-up for the content too.

  • KA

    Kristian A.

    7 6 2018 18:39

    8       0

    Great new trade ideas intro and format. Justine remains divine.

  • EA

    Eddie A.

    7 6 2018 18:34

    1       0

    Loving this new intro!

  • PR

    Peter R.

    7 6 2018 17:13

    6       1

    New intro is much better. Like the wrap up at the end as well. Justine is wonderful. She asks relevant questions, shows the depth of her knowledge and doesn't ask repeat questions like some of the other interviewers. Nice Improvements RV.

  • MF

    Miguel F.

    7 6 2018 15:32

    2       5

    I loved the past intro. There was a problem with the volume, but that was all. The past intro was much more exciting.

  • DL

    Dan L.

    7 6 2018 14:26

    1       0

    Forgive my inexperience with the Futures market; I'm trying to learn how it works after watching this video.

    When I go to look at "December 2019 CORN Futures" the ticker I see available through both Barchart and TradingView is ZCZ2019. But both sites list the quote at "413'0" - what does this mean, what currency is this? I know how to use margin, buy stocks, set stop-losses, etc, using stocks. But I've never traded futures before. Anyone that has a simple explanation of how to bridge what is being presented here with how we see the quote?

    Thanks!

    • DL

      Dan L.

      7 6 2018 15:47

      0       0

      Reply to my own comment - correct me if I'm wrong...
      Ticker: ZC
      Contract Size: 5000 Bushels
      Each tick moves $.0025/bushel, which equates to $12.50/contract
      Initial Margin is approximately 11%.
      Notional Value through my brokerage is looking like $18,862.50 (as of 11:44am New York time)
      Contract Months: H, K, N, U, Z ( Mar, May, Jul, Sep, Dec )

      So, to post margin on one contract it looks like $2,074.88?
      (...further analysis would go into maintenance requirements, etc)

      Let me know if I'm on the right route here - I'm not a pro at this stuff, trying to learn.

    • DW

      Daniel W.

      7 6 2018 15:49

      1       0

      Google for "Daniels trading futures specifications". It is a good way to start. 1 contract of ZC is 5000 bushels. The price for 1 bushel in your example is 4.13 USD. Be aware that the current contract is 3.8 USD. If the contango/backwardation does not change you pay a "premium" of 0.34 USD per bushel. You need to make that back in the future. Also ZC is quite cyclical. You should definitively look at "corn seasonal chart" to get an idea of where we are in the cycle.

    • DL

      Dan L.

      7 6 2018 16:05

      0       0

      Thanks for the reply Daniel - I just watched CME's video on the June, July, August cyclical peak when volume picks up. It looks like technically we have dropped about 8% during the week and are getting close to the stop-loss mentioned in the video.

    • bm

      brian m.

      9 6 2018 04:11

      0       0

      I have a Derivatives account which allows me to buy Dec 19 Corn on Various exchanges.,As far as I Know the price is quoted in Cents and the minimum fluctuation is 0.25 cents.(but this figure seems to be expressed in eighths)....so 413'0" means $4.13 and zero eighths of a cent...and 413"6'. means $4.13 and six eighths...Correct me if I am wrong..Regarding futures and how that market works I recommend "Andrew Lo" on youtube

  • KJ

    Kulbir J.

    7 6 2018 13:57

    13       0

    Thank God, Real Vision listened and changed the music!

  • BF

    Brad F.

    7 6 2018 13:31

    3       0

    I really like the new shorter intro. And the trade idea :-)

  • CO

    Craig O.

    7 6 2018 13:19

    4       1

    Hoping for more educational content in the future, in line with Raoul's recent comments. We keep hearing contributors refer, in passing, to the commodity ETNs (like CORN) as another way to play trade ideas like these. I know little about trading futures, mostly what I've gleaned from follwing Peter Brandt since becoming an RV member a year ago. But from what I understand, there is bound to be significant decay in the CORN ETN during this 18 month time horizon. Is it plausible that the upside in corn futures (Dec 2019) would translate into a profitable trade in the ETN over that time period? If so I would like to understand how to estimate the decay from rolling contracts and contrast against potential upside in price. If not I think it's misleading for these futures traders to throw the idea out there w/out qualifying the recommendation.

    • DM

      Dan M.

      8 6 2018 03:56

      0       0

      Respectfully, it is a trade idea. A bit much to expect a trading education as well. Do some research, perhaps try calling the ETN sponsor. Also, make sure you understand the risks of the ETN. Very different from an ETF.

  • CM

    Carlos M.

    7 6 2018 10:13

    3       0

    I like the agro play for other reasons, but I only wonder if what he is saying is true, why would China play into the US hands ( specially with the current state of affairs ) and take a direction that will give the US leverage over them( if as he says US is the only country that can supply that amount of corn)?

    • DM

      Dan M.

      8 6 2018 03:48

      0       0

      They are not playing into US hands. It is the opposite. They badly need the corn for their own domestic needs while at the same time they can use these increased imports of US goods to reduce trade pressures from the US.

    • CM

      Carlos M.

      8 6 2018 14:32

      0       0

      Dan M. I guess the key word is badly, how do you negotiate tariff etc when you badly need something?

  • JM

    Johann M.

    7 6 2018 09:30

    5       0

    Like the new music!!! Really liking the agriculture play, just waiting for lift off... DBA also still bounching around

    • SI

      Sundar I.

      7 6 2018 10:08

      0       0

      Mm