Market update 07/20/2020

Monday July 20, 2020

US$ was down .72 at 95.87



Corn futures lost 4 cents last week, so the trend continues lower along with today’s trade touching 7 lower.  It is all weather folks.  Even after crop conditions did drop a week ago traders felt like we still have plenty of corn and the threat of rationing corn is ridiculous at this moment in time.  One would think that the giant export sales of corn to China and elsewhere could stimulate or at least support the corn market but not so at this time.  Because getting this market back anywhere near the insurance levels set on the December corn there is little incentive to do anything.  Sadly, the lower the market goes could actually benefit the producer.  Stay tuned for the crop condition report today at 3pm.  Right now it is the only game in town.  By the way, the near term radar looks to increase production. Does anyone care that the soybean/corn ratio is at 3 this morning?


Soybeans gained 11 cents last week, let’s have a parade.  It looks to me like that traders are saying wow, China is buying record amounts of soybeans and the weather will remain critical well into August.  However, here we are at the 900 November futures level and what did I say last week, “be defensive”.  The 890 September put options are 12 cents and the 900 September short dated options are 17 cents, food for thought.  Perhaps the crop condition of the soybeans today will be slightly more important than the corn as the corn crop will be considered “made” sooner than later.  


August live cattle gained 327 last week.  Opportunity lost as that contract is near 200 lower this morning.  That run up was too fast too high.  The cash trade increased about a dollar if you use your imagination and that was not near enough to entice traders to keep buying.  Sure, the boxed beef prices have found support again if you use your imagination and they better stay that way.  I am thinking that it’s “the economy stupid” or “stupid economy”.  Either way think about no school lunches and more unemployment and of course prospects of record small business bankruptcy.  My thought is that it may not be too late to consider October and/or December price protection considering the cash at 96 and the futures at 101 something.???

Any statements of fact herein contained are derived from sources believed to be reliable, but do not purport to be complete.  No responsibility is assumed with respect to any such statement, nor with respect to any expression of opinion herein contained.  Futures trading is speculative and a substantial risk of loss exists.  The prices above may reflect those of the relevant spot contract.  Movement in the spot contract does not necessarily correlate to the movement of individual option premiums.  Past performances not necessarily indicative of future results

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