Market Update 4/06/2020

Monday April 6, 2020

US$ 100.68 up 204 for the week



The corn market has a couple of problems.  The first is lack of ethanol demand and the second is the estimate for planting 95-96 million acres of corn in the coming crop year.  Which one of these problems will be settled first?  My guess is that acreage number is as high as it will get unless the corn market rallies 80 cents then everyone would be happy.  What I am suggesting is that this market is really in a bad spot with both those negative factors.  Give John a call 320.761.0406 as he has been dead right in his marketing for over a year now and his program will help you.


Soybeans lost 27 cents last week finding no support until this morning bouncing off another daily low.  The July contract hit in 854 area and jumped almost 10 cents.  Nothing to get excited about yet but some numbers appear to be lining up.  By that I mean a support level holding and at the same time the uncertainty of spring planting and the possibility that export demand could pick up. Again, I am not suggesting a slam dunk. A 30cent rally would certainly warrant adding put options for new crop production.


June live cattle futures lost 857 to complete another ugly, ugly week.  The driving force has been keeping the labor in place through out the packing industry by keeping them healthy.  That will continue to be a tall order until the coronavirus corrects itself.  The other forceful fact is that when the stay at home status began there was a lot of stock piling beef at home and rightfully so.  Now that bust of demand has dried up.  Of course the media and human nature makes the worst of the situation and selling the future market continues. 


April milk futures lost 1.20 for the week ending at 1407 and the bad news is another 35 cent loss this morning.  Of course unprecedented is the word.  No one could have ever seen this coming.  I am still in favor of spending 25 to 50 cents on put options because it leaves the top side open and provides a floor. 

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