Market Analysis

Hoffman bean planting

Thinking of the farm as a business

Corn and bean basis has remained strong, or even slightly improved for April delivery, even with the recent futures rally. This likely indicates limited farmer selling and/or good demand. It’s been a while since we’ve seen this type of market situation, and it suggests potentially higher prices going forward. I expect the 2018 marketing year [...]

Print Friendly
Read More
money dollars

Are options the answer?

The market is unsure if bean tariffs will mean anything. Even if China starts buying all of their beans from South America, the rest of the world could still buy U.S. beans. This week the Brazil bean cash offers skyrocketed off the tariff news, but when the futures came down 50 cents other world buyers started [...]

Print Friendly
Read More
Planting west of Kenton

Uncertainty in the market…

The USDA report from last week is old news, it’s all about the trade wars today. Plus, a new report from Reuters suggests the EPA secretly allowed a profitable refiner a waiver from the biofuels mandate.  All of this buzz caused significant market volatility.  Everyone is unsure what’s going to happen, so long-term effects are [...]

Print Friendly
Read More
soybean planting

Profitability on straddle trades

Sometimes ideas for trades come from unlikely circumstances. While I was presenting a grain marketing seminar in February a farmer said he would never consider selling options because of the risk of large price movements. While I understand his fear, I don’t agree. Farmers’ fear of selling options can be due to many factors, including [...]

Print Friendly
Read More
soybeans in fall

Selling options as part of a marketing strategy

With corn planting starting in about 30 days, the western Corn Belt is currently dry and the east is extremely wet. Combined with the dryness in South America the market is noticing these less than ideal conditions and making adjustments. Two months ago farmers were hoping for a 20-cent rally to sell some corn. Now [...]

Print Friendly
Read More
Scheve

Why is it important to have a marketing strategy?

Many are trying to estimate the expected bean production in Argentina, the third largest bean producing country. Prices could still range from below $9 to above $12 depending on weather and production issues during the next month. As planting season approaches, corn slowly trends higher. Generally farmers aren’t selling at current values and are hoping [...]

Print Friendly
Read More
soybean-sunrise

Should farmers be bullish or bearish on beans?

There is often conflicting information in the trades on whether farmers should be bullish or bearish. Usually there are reasons to be both. Therefore, I will often write down the reasons why the market could go up or down when developing my marketing strategy. I can then use this information to determine what I think [...]

Print Friendly
Read More
money2

How to roll futures to capture market carry

The USDA report didn’t affect the markets much. Corn exports were up a little, while bean exports were down slightly. The South American bean crop looks average, with Brazil likely having above average yields and Argentina likely below average. Next question: how many corn and bean acres will U.S. farmers plant in 2018? Many suspect [...]

Print Friendly
Read More
Winter moon

Generating higher prices in a low price market

The groundhog saw it’s shadow last week and it reminded me of the movie Groundhog Day. Similar to the plot of the movie the corn market is repeating itself day after day, week after week and now month after month. No one knows when or what will cause the cycle will end. Beans, on the [...]

Print Friendly
Read More