Market Analysis

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Focusing on 2017 instead of 2016

The USDA report published on Thursday held few surprises. Basically we have too much corn and wheat, and most likely too many beans. Expect more sideways trading in the short-term. South America Update South American weather has been “normal.” Many expect record yields in Brazil and trend-line yields in Argentina. Combined yields may exceed early [...]

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Developing a strong marketing strategy

Iowa State University just reported their 2017 corn and bean breakeven points. It showed that the average Iowa bean farmer can lock in 2017 crop profits with current fall market prices. That is not necessarily the case for corn. Corn on corn farmers would likely lose with today’s prices, while corn on beans are showing [...]

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Will tight-fisted corn sales continue?

Corn prices continue to dominate the thoughts of producers this winter. They have plenty of 2016 corn yet to sell as shown by the quarterly grain stocks report from last month. This report had Dec. 1, 2016 U.S. corn stocks at 12.6 billion bushels, up 10% from December 2015, a new Dec. 1 record. Corn has [...]

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Market action for sideways prices

Soybean market commentary Argentina weather remains good, which could mean an increase in bean yield estimates.  If this continues, global supply will be high and likely push down prices. The key will be plenty of rain through the growing season, and then dry weather during harvest. Expect volatility for the next few months, as many [...]

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More on options: Making the right call with calls

Results from a recent Farm Futures survey show farmers will plant roughly the same number of corn and bean acres — around 90.5 million acres. If true, this would be long term bearish for beans and long term relatively bullish for corn.   Estimating South America’s soybeans At the start of the growing season the [...]

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More about options

Arguably, the report last week was the third most important report of the year (after planting intentions in late March and the actual planting and stock report in late June). It showed the final yield results for 2016.   Corn There were few changes to the corn bottom line. Corn still shows a 2.3 billion [...]

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Option strategies

Frequently farmers ask for my opinion on buying puts. While generally I’m not a big fan, purchasing puts can be a useful tool in a farmer’s toolbox. However, farmers must be careful to fully understand and consider both the advantages and disadvantages of using them. Regardless of my opinion on buying puts, I think it’s [...]

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2015 snow fence

Mixed results from big January report

The numbers from today are mixed for grains. Two surprises with soybeans today. First, soybean numbers were bullish with U.S. production at 4.307 billion bushels and the yield at 52.1 bushels per acre. Both were below trade expectations and below last month. That was the surprise. In addition, soybean ending stocks were pegged at 420 [...]

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Beans 2012

Really, $6 beans? Probably not.

Corn Corn pushed to the top of the trading range last week. However, with 2.3 billion corn bushels carryout (compared to 1.8 billion last year), farmers are anxious to sell, so prices pulled back by Friday. It will likely take a significant drop in corn acres next year and a weather event to see $4 [...]

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Using the “dreaded” margin call

There may be potential dry weather issues in Brazil (two regions — Minas Gerais and Bahia). The market is adjusting to this bullish news, but keep in mind these two regions only account for about 8% of Brazil’s total bean production. It would be like if Ohio (7% of the U.S. bean production) was suffering [...]

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