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Market Analysis



Does market volatility matter?

Bean prices bounced off the recent trading lows this week. While this was positive for farmers, there still remain several unknowns. Dry weather throughout the Midwest has many in the trade concerned and wondering what summer time weather will be like and if yields will suffer. Also, it’s uncertain how …

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The benefits of selling options explained

Last week’s USDA report showed an increase of just over one bushel per acre in the average yield to 176.6 bushels per acre. Despite a slight decrease in the harvested acres in the report, there will likely need to be a supply disruption sometime in the next eight months for …

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Setting basis on beans

Largely due to great weather in South America, soybeans have steadily declined every day since their high on Dec. 5 losing nearly 65 cents. However, there is still plenty of time left in South America’s growing season. If there is a weather issue, $10 is possible again, if good weather continues, …

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Understanding how to capture market carry

This week the USDA report and the markets were uneventful. Farmers aren’t selling and corn export demand is pacing slow. Good weather conditions in South America eroded bean market premium.   Understanding how to capture market carry I recently attended a grain marketing conference where the presenter discussed ideas for …

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Don’t give your storage away

The markets continue to go nowhere. Corn exports are pacing slower than what USDA is forecasting but farmers aren’t selling. Beans earlier seemingly had upside potential due to South American weather, but couldn’t sustain it. Beans still have some potential in the short term if there is a weather scare in South America, …

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Capturing market carry

With too much supply in the U.S. and around the world, corn isn’t likely to move in the short-term without a big event. With 30 to 45 days of the major soybean producing areas of South American growing season left, there is still a lot of weather premium potential left …

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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 …

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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 …

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