Market Analysis

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Should my hedge account show a profit or loss at the end of the year?

As harvest finishes with record yields across the Midwest, corn prices fell below $3.40. However for the week it was nearly unchanged. Many farmers have struggled to sell at profitable levels, and while higher than average yields help offset lower prices some, it hasn’t been enough. Also contributing to lower prices, funds continue to hold [...]

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Straddles vs. accumulator contracts

The USDA announced a record yield resulting in a 2.5 billion bushel carryout. Therefore, I think it’s unlikely that corn will sustain a major rally until summer 2018. A soybean rally won’t help corn prices either unless there is a devastating drought in South America. If there is a 2 million- to 4 million-acre switch [...]

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The Leffels farming in Auglaize County (Greg and son Luke; Doug and son Derek). Photo by Joan Leffel.

Selling calls

The markets didn’t move much this week. Harvest pressure continues to limit corn upside potential. Beans at first looked like they may take off as harvest slowed, but on Friday, Brazil’s currency fell against the dollar. This meant a price boost for Brazilian farmers who sold some beans, putting pressure on futures prices. The 30-day [...]

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reese1

Benefiting from puts, calls and straddles

Corn The market continues to be uneventful. End users want to buy $3.40 Dec futures and farmers are hoping for $3.60 to sell some excess production. Slow exports aren’t helping. Realistically farmers may need to plant 1 million to 2 million fewer acres next year to see $4 by next summer.   Beans With bean [...]

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Consider all the scenarios and make a marketing plan

Many farmers tell me they do well at picking prices. Maybe some do, but many do not. If farmers were good at predicting prices, most would have sold their 2016 crop for over $4.25 and would have their 2017 crop already sold for $4. Unfortunately, most farmers didn’t get $4.25 for their 2016 corn and [...]

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tools

What is in your marketing tool box?

While the slow harvest is keeping corn prices from tanking in the short-term, the inevitable huge supply is limiting any upside potential. The latest USDA estimates haven’t helped either. While they reduced acre estimates, yields also increased. So, there was little price impact. It’s doubtful that even a South American weather scare would have much [...]

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money

The dreaded margin call

The market is boring right now because there is nothing to talk about.  Corn seems to be range bound between $3.45-$3.75 until Thanksgiving and it will take an unforeseen surprise to change it.  Beans seem range bound between $9.40-$10.00 through November.  For that to change, it will take a big South American weather scare.  Everything [...]

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autumn corn harvest

Farmers need to use their marketing edge

Corn and soybean yields continue to exceed farmers’ expectations across the Midwest, suggesting USDA estimates may have been closer than many had thought. Prices continue to do nothing. Spreads between futures contracts have widened to levels unseen in several years for corn and even longer for beans. This and basis also dropping indicates the market wants [...]

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fall harvest

Corn neutral, friendly soybeans, bearish wheat

USDA lowered last year’s soybean production more than expected. Last year’s soybean production was revised to 4.296 billion bushels. Earlier USDA had it at 4.305 billion bushels. Corn and soybean stocks were lower than expected. Wheat stocks were higher than expected. Winter wheat production for 2017-18 was estimated at 1.269 billion bushels, slightly lower than [...]

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corn kernals

Using straddles in a sideways market, both new and review

Corn Corn traded within a 10-cent range this previous week, ending 1 cent lower than last week. The Dec futures low at $3.44 continues to hold as the bottom for the year so far. If this holds for another week or two, there is a chance this will be the year’s low. Early yield reports [...]

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