Market Update 12/28/2020

Monday December 28, 2020

US$ 90.25 up .27 for the week. That is still a low number!

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Corn futures gained 13 cents for the week so technically nothing has changed as the market continues to grind higher.  The one thing about this week is that it is again one trading day short probably creating even more volatility and that the futures have traded above 454.  If/when the market closes above 454 it will be considered a big deal.  You see that is the number that the futures broke above in the big rally back in like 2010-2012.  Yup, the good old days.  It would be way too easy to have it happen that way again but keep in mind that there are several little factors and a few huge factors lining up as we speak.  The huge factors are probably described as weather, weather, weather as being most supportive.  Continue to be defensive with sales right in here while incorporating call options for upside protection.  Watch for 454 to survive or fail.


March soybean futures gained 41 cents in the shortened work week.  The market shot higher early Sunday night and now has corrected substantially lower.  I am talking about 30 cents off the highs.  I believe there could be some fund profit taking.  Will this be it or will it continue till the end of the week, month, quarter, year?  The problem is that even another 50 cents down just begins to break the uptrend.  Who wants to sit through that?  Therefore, dripple some more sales out there with November futures in the near 1100 dollar range.  For sure when/if the weather gets moisture in the forecast the correction will get underway. 


The February live cattle contract gained 12 cents last week, boring.  The cash trade base on the soon to expire December contract gained another 2 dollars with most trade in the 110 range and 112 dressed.  And the futures show modest to better strength this morning.  What did I say last week?  Weather and demand.  Weather put just a little nervousness in the trade and the demand remains in place.  I mention the demand since boxed beef movement has been outstanding in my opinion.  It also does not hurt that the profit margins at the packing plants is still intact.  I saw a report this morning pointing out that the live price is still 10 dollars under a year ago.  That does not feel so good.  This could come back to haunt me but I look at the calendar and we are past December 15 and the market is holding therefore it is the wrong time of the year to be an aggressive seller.  Give it 45 days.

Happy New Year!

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