commodity market update

Reward the markets on the uptick…don’t know how long they will last.

Grain markets are rebounding today- Next Thursday is the quarterly stocks report and there is guaranteed to be some surprises.
Most firms are lowering the yield for corn again and this will keep a firm tone to the market.
Harvest pressure dips will be met with commercial /enduser buying. more price protection can be taken by buying puts only- hope the weather dries out and harvest can begin in earnest.

The monthly crop report will be out tomorrow morning
average guesses are for lower corn yeilds- is this already in the market??
we are at the top of our expected price range- either this report will comfirm the top or we will blow through it. Flip a coin. The only thing we know for sure is that $4.65 is a good futures price- time to reward the market and sell some bushels. We can always buy some call spreads if it blows out through the top.
Bean yeilds aren’t projected to be lower- the price is also at the top of the range and harvest is upon us- farmers will likely be willing sellers at harvest to make room to store the corn crop.
Hang on to your hats over these government reports – there is bound to be some surprises
We will send a blog tomorrow after the report

We are in the midst of a mid July weather rally- we haven’t seen one of these for the past sereravl years!

the USDA stocks report a couple of weeks ago started the recovery and the weather( both here and in Europe) has taken over. There were alot of shorts in the wheat market and they are jumping ship.

This is an excellent opportunity for those producers who need to make some sales for harvest to get caught up

we are glad we did some of the sales using the options as we have upside potential.

Wheat is back above $6.00- the basis remains terrible-sell between $6.50 and $7.00

Corn is back above $4.00 ( a 60 cent rally in 2 weeks with great crop ratings)

sell some at $4.15 and again at $4.30

Beans could suffer the most if hot/ dry forecast comes true

buy 1 $9.80 put and sell 1 $11.00 call for 20 cent cost

Enter your blog post here…

  The June planted acres report did indeed contain some surprises

Acres planted to Corn were down .92 million acres at 87.87 million -from the March report– the trade was looking for an increase— this is still up 1.39 million from 2009

Bean acres were pegged at 78.86 UP .77 million from March and up 1.41 million from 2009- again a  surprise as the trade had bean acres down

Wheat acre were 53.30 million up from 53.82 in March

the stocks report showed 4% less beans on hand than expexcted

corn stocks were 6% less than expected

wheat stocks were 4% more than expected

We have had 7 days down in a row in corn– this report should be enough to give us a nice rebound- we dropped over 40 cents so we’ll need to look at selling a 20 cent retracement- remember the crop ratings are wonderful and no stressful weather on the horizon.

Buy puts and sell 2 calls when Dec corn gets to $3.65 or higher

beans may rally on the strength of the corn number — sell Nov beans at $9.40 or higher

we will probably get 1 more down leg into late summer–early fall – with the potential to get Dec futures to $3.00

Enter your blog post here…

interesting seasonal coming up for corn

in the last 15 years from June18- July 27 corn has dropped 13 out of 15 years- an average of 44 cents

in the last 3 years it has dropped an average of $1.21!!

we have rallied in the last week into this time period and the corn crop is rated the highest at 77% good

there is also about 25% of last years crop still out there to be sold

perhaps this would be a good rally to sell something!!

Enter your blog post here…

Planting delays in Canada’s wheat and oat areas is prompting a short covering rally- 8-12 million acrea are affected

1st resistance in Dec 2010 corn is $3.74 then $3.88— if we get a rally back to 3.88 sell another 10%

if Dec 2011 corn gets back to $4.20 – sell another 10%

the crop ratings are still exceptional at 77%

Nov soybean resistance is $9.25 then 9.36—–beans are rated 73% good

sell another 10% if we get back above 9.30

you could also do the option stradegies at these resistance areas

Enter your blog post here…

the USDA report was somewhat friendly for Corn- they lowered the projected ending stocks for fall to 1.573 Billion – down 245 million  – they lowered the carry-in from last year and raised the corn used for ethanol

we need to use this rally to get the option fences on

Dec 2010  $3.70 puts and selling 2 $4.00 calls should be at even money

Dec 2011  $4.00 puts and selling 2 $5.00 calls should be at even money

the Bean carryover was only lowered 5 million bushels and should have a small effect

Sell something on this rally!!

Enter your blog post here…

   Crop ratings are excellent

we have violated support in both the corn and beans

there is considerable downside risk in these markets- we need to extend coverage as there is at least 50 cents of downside in the corn and $1.00 in the beans

Dec 2010 corn $3.60 puts are 30 cents and selling 2- $4.00 calls for 15 cent for no premium cost

for Nov 2010 beans you can buy 1 $9.00 put and sell 2 -$10.00 calls for less than 10 cents cost

we can still buy 1 dec 2011 $3.90 put and sell 2- 4.90 calls for even money

we can buy 1 Nov. 2011 $9.20 put and sell 2- $10.80 calls for even money

or sell any 10- 15 cents rally in corn and any 20-30 cent rally in beans

Enter your blog post here…