Market Update 10/19/2020

Monday October 19, 2020

US$ 93.66 to end the week (still not a negative factor)



Corn futures gained 7 cents last week with the December contract ending at 402.  We have not seen a 4 in front of a closing number for a while.  This morning we have traded near 407 so the party continues.  Of note in the news is that continued weather issues in the southern hemisphere are not perfect and that huge export sales continue to be reported this morning.  410 plus is the next resistance number on the December contract.  It is concerning to me that December 21 futures have not been able to trade above 400 but it does indicate nearby demand for our corn.  If we can straighten out the ethanol industry the added support would be great.  Keep in mind we have seen these rallies get sold before so do not sit on your hands, continue using opportunities.  Call for suggestions. 


November soybean futures lost 16 cents ending at 1050 on the November contract.  This is not a disaster and considering that harvest is finishing up and soybeans continue to go to town for sale it may be considered a victory.  The good news is also that if you are one of those making the soybean sales out of the field these pull backs are probably an opportunity to own some call options.  Be careful.  The reason I say that is due to the volatility, the election and government payments.  All of these things are working on the market.  As I mentioned last week the big range of trade is anticipated to be 1000-1100 and the intermediate range looks like 1030-1060.  We can put these numbers into our hedge program analysis so that you are ready to take action at appropriate levels for your operation.


The December live cattle futures did not have a terrible week and the cash trade was reported mostly at 109 with an extreme top in Iowa of 110.  That is not terrible either.  Boxed beef movement continues to be huge at drastically lower prices but oh well, the producer was not getting any of that anyway.  So I want to paint a rosy picture going forward with heavy cattle be reduced and demand both here and abroad is just fine.  Here is the but, the thing called a presidential election.  In my opinion why not doe something with December and/or April put positions.  We can work out a put spread or even a naked put that will certainly get you through political unrest and worse. 

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