Monday November 9,2020
US$ 92.93 down 1.81 what can I say?
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CORN
Corn futures gained 8 cents last week while we were all waiting for the election outcome. Today we have that outcome, and the equity markets are certainly impressed so far. Who knows about tomorrow? The range of trade today has been 8 cents with the problem of reports that China wants to renegotiate the phase 1 trade agreement. My thought is that the demand is still out there and should support the market. The other nice move is in the crude oil four dollars higher at one point, who would have thought? Now if we could just deal successfully with the COVID problem everyone could take a breath of relief. Do not count on it, there are way too many variables. If you are going to raise corn in 2021 consider what something like a 350 sale out of the field makes your revenue look like. No idea? We can show you.
SOYBEANS
November soybean futures gained 45 cents last week, nicely done. The market did get a bit scary with a 1045 January low but then soaring to a 1113 high. That is what you call a turn around. Now we have followed through with a 1118 high last night. Needless to say the market is jittery. No matter how you look at it anything can happen, between the election, China, weather and the USDA report tomorrow. Remember we saw a larger than expected reduction in supplies last month, so the key to the report will be a continuation of that trend. The market action at this point certainly suggests that will be the case. My thoughts are that should the supply number stay the same or decrease the rally will continue. If not, buying the January 1050 put options for 8 cents plus fees will be genius. Also keep in mind that this market is what we call OVER bought. The other way to handle this market is to make a cash sale with the nice basis levels and buy call options of some flavor.
CATTLE
The December live cattle futures gained a whopping 35 cents last week and the cash trade did not make 110. The cash trade was better just not that good. Most cash trade was 107 and down with dressed meat trading 166-167. This morning the equity rally on election news and COVID vaccine news is a good thing with December live cattle futures 200 plus higher. That will not hurt. So, the December contract is trading above 111 which in my opinion is outer space at this time. The reality is that needs to create another 2-3 dollar advance in the cash trade or the futures will run out of gas rather quickly. Also keep in mind that corn is going into Oklahoma feedlots priced right at five dollars, what is that going to do to the bottom line? Keep protecting price.
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