Monday January 25, 2021
US$ 90.22 down .52 for the week. This is still trending down.
Corn futures lost 31 cents last week and why not? You see all the good news has been factored in for a while and it only took a couple of negative issues to drive the market lower. Think about what we talked about last week. Large long positions by investor funds, continued good export sales reports (which is old news) and slightly improving moisture in SA. Oh, and did I mention political rantings last week? I think so.
Also, one experienced marketing guru mentioned last week, “Not much good happens in February.” Think about this: the July short dated 400 corn put options are around 12 cents.
March soybean futures lost 105 cents last week. That was brutal and it will take quite some time to determine if the technical damage is for real. This week will be the last trading day in January and what a month it has been. The number for January 29 close is 1362. Stay short below there and long above the number. That is simple enough. I guess we need to keep in mind we really do not have any more soybeans today than we did at a dollar higher last week so write it off to all the many, many market factors that we have talked about in the past. Keep it simple, risk 20 cents on a shorted dated July soybean put option.
The February live cattle contract gained 395 and leaves a lot of questions. This morning after the Friday cattle on feed report the live cattle futures are holding on the plus side by 25 to 75 cents. Again, pretty darn impressive. Remember when I said that anytime a contract hit 120 “do something”? Today would be that day. April futures at 123 and June futures at 119. This will become a huge opportunity should the cash trade continue to lag, and I do mean lag. It is still difficult to imagine futures 6 plus dollars above cash. Call for ideas.
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