MarketEdge

Select Pricing Program Bi-Weekly Updates!
John Stewart & Associates, January 12, 2018 Comments: (posted 1/15/18)

This week we had the first quarter stocks report along with the US Supply/Demand report which often times generates a little volatility in the market.  This year we saw very little volatility in corn and a marginal uptick in soybeans due to slightly smaller production and stocks than what the market was looking for.  The managed money crowd remains record short corn and soybeans for January.  This group can be the catalyst for a move higher as they run to cover short positions, but there needs to be a catalyst for that and today there simply is not one.  South American weather will be the key over the next couple months.
 
As far as additional trades on our JSA Select program we have not made any since our last report.  The only delivery period remaining for our 17/18 crop year program is the summer position versus July futures on corn and soybeans.  For soybeans we are 100% sold and for the time being we see little reason to go in and buy anything back looking for a rally into the spring.  Troublesome Brazilian weather is something that would cause us to consider buying back some of this bean position, but at the moment Brazilian weather is rather good.
 
In the summer delivery period for corn we are 40% sold with futures and we sold a straddle using options back in April 2017.  The short call side of the straddle has been lifted already and the short put side remains.  This is the reason our total % sold only says 3%.  Our target for March corn to lift the short puts is near 3.60 compared to the market today at 3.46.  In the short run our view is that corn will have a very hard time exceeding 3.60 CH8.  Using today’s prices for July corn futures our final price for summer corn would be 3.88 or 26 cents above the current market.  Our intentions are to wait until roughly 3.60 CH8 in the short run to lift our remaining options and at nearly the same time in July corn start to sell more futures near the 3.80 level.  If we achieve these levels our summer futures price would exceed $4, which is ultimately our goal.
 
REMINDER –
January 31st is the sign-up deadline for the 18/19 crop year JSA Select™ program.  This year in addition to the fall, winter, and summer delivery periods for corn and soybeans planted this spring we have added a 2 year out fall delivery window versus the CZ19 and SX19.  Whether you are considering the 1 year or 2 year program the sign up deadline is the end of this month.  We encourage you to consider volume in both crop year programs as the carry in the market continues to provide the most value for producers.  The further out you go on the calendar the better the value… 
 
Please contact your local elevator or plant with questions or to simply sign up bushels in JSA Select.
 
Thank you
 
Brian Burke
John Stewart & Associates

 


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