Market Update 4/19/2021

Monday April 19, 2021

US$ 91.55 down .63 for the week

Should not garner attention until 95.00



Old crop corn gained 8 cents and new crop December corn gained 15.  Hmm, a real trading affair with that spread going back and forth but still maintaining a friendly trend.  The market is back up against resistance this morning. I have heard the comment made, “where will ethanol plants find corn this summer?” That is an interesting question and it comes up due to the basis levels in the June and July time frame.  Crazy numbers with several locations going positive.  My thought is that can change.  Therefore, since we are in the selling time of the year with mid June till the 4th of July many times printing the high in the summer market, I said, “many times,” not always.  Remember, anything can happen.  So, my point would be there are several factors pointing to continue price protection.  I would also point out that with the supply numbers where they are most need to be protected “both ways.”


Soybean futures gained 30 cents on the May contract gaining on the new crop November contract.  The outlook for the soybean market can be described as even more friendly than the corn market due to ending stocks and the acreage report numbers.  We do need to produce soybeans here this summer and averages say we will.  I agree with the expert that said November soybeans could be 3 dollars higher OR 3 dollars lower by harvest.  My opinion is that this is a perfect place to use soybean put options.  Think about it again.  By spending 20-25 cents per bushel, you should be able to protect 1175 November futures and keep doing it should the market continue higher.


OOPS!  The live cattle trade is officially in a sell off trend.  Last week the June futures lost 340 and the cash was steady in a non-existent kind of way.  This morning it did not take long for the futures to lose 150.  This does not bode well for the cash trade going forward.  I believe many participants will be somewhat shocked, me included.  We were believing that supplies are manageable, and that demand would continue to be sufficient both here and abroad. The put option that we have been talking about sure make cents now.  Keep in mind that the live cattle futures are a fickle partner.  The end of the day is important.  One factor that comes to mind for the sell off is the negative estimates for Friday’s cattle on feed report.  That’ all I got.

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