MarketEdge

Select Pricing Program Bi-Weekly Updates!
John Stewart & Associates, July 14, 2017 Comments: (posted 7/17/17)

Bi-Weekly Update - July 14, 2017 - JSA Select Pricing Chart

The market has been on a rollercoaster since our last update, and we have been busy trying to price your bushels at the best value we can. Since the June 30th report where the USDA cut soybean acreage and stocks and did the reverse for corn the market has rallied hard, corrected, and now starting to recover all in a 2 week period of time. In that period we sold another 30% of the fall corn to go to 50% sold, and sold another 25% of the fall soybeans to take us to 75% priced. Additionally we sold another 20% of the winter corn, 40% of the winter soybeans, and 66% of the summer soybeans as the market finally got back above $10.00 for the first time since March. We also have made several option trades mostly liquidating some floors in place that we had in the case that the June 30th report was bearish.
 
If anything this week has been a tremendous reminder of how influential funds and algorithmic trading is in these markets, and how they operate around USDA reports. A lot of the trade thought that the USDA would make adjustments to this week’s WASDE report to the downside due to current crop conditions when in fact history has told us rarely do they make adjustments. Couple that report with a more benign weather forecast and the signal to the computers was sell your position and sell it again. We did recover some today, and if we get a model this weekend showing a more hot and dry forecast could see more recovery next week. One thing we would like to point out is how much we are hearing from weather analyst is how much discrepancy the weather models are showing this year and how hard it is to come up with a forecast with a high degree of accuracy. We are on the tail end of a weather market for corn and demand is not going to give us much support until after harvest so unless we see some major weather issue the high for December corn may be in. The soybean weather market should be interesting the next two weeks as the forecast will take us into August and we know that soybean yields are made in August.
 
Brent Baker
John Stewart & Associates


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