Market Report

Markets

The big news on Monday was the substantial dip in the Chinese stock market, that trend continued and the 3 day sell of knocks 11% off the Shanghai Composite.  Despite government efforts to reverse the trend, the Chinese stock market continues to decline since peaking on June 12^th.

Commodities had a significant sell of yesterday pulling down gold, silver, copper, cotton, soybeans, corn, cattle, and Crude oil futures have continued to slide to a new 4 month low near $47 a barrel, but headed back in to positive territory midday today.

U.S Dollar strengthens again today, as many investors look for the fed to increase interest as early as September.

Ford reported a 46% increase in net income for Q2, logging its largest quarterly profit ever for North America.

Grain Markets 12:39pm

Corn -2 @ 3.71
Dec Corn -2 $3.81 ½
Beans +10 ¼ @ $9.71 1/2
Nov Beans +5 ¾ @ $9.39

Crop condition was raised from 69% to 70% good to Excellent on corn as compared to last years 75%, and soybeans were left alone at 62% good to excellent as compared to last years 71%

Corn

December Corn has lost .73 cents in the last 10 trading days, interestingly enough earlier this month, we went from the current trading level to the contract high in just 13 days.  We have literally went from $3.81 all the way up to $4.54 and back to $3.81 in 23 days.  Talk about a roller coaster ride.  There seems to be a lot of noise and no one is exactly sure what to hear, from a weather scare and flooding, to key fundamentals influencing world carry, Political, and of course the macro markets.  It seems they are all competing for attention.

A new gap was created yesterday.  We now have 2 gaps in the Dec ’15 corn contract, from a technical perspective we may see corn continue to trend down into contract lows prior to retracing those gaps.  Keep in mind the gap retracement could be post-harvest.

Strategy:  As the market dips, and affordable way to participate in upside potential on sold bushels is a simple “buy back strategy” utilizing options.  Which keeps capital risk low.

Beans:  Uncertainty in China w no doubt caused a lot of pain for the bean market yesterday seeing a 30 cent drop on Monday in Nov beans.   A bit of a turnaround Tuesday feel today though as beans gained at the open, but only up 5 cents at noon.  Beans are feeling a lot of pressure from the macro markets, fear of Chinese demand and the US Dollar making South America more appealing to international buyers.

Strategy: Beans may be a painful ride down, lock in a sale at a profitable level either cash or utilizing an HTA.  Bonus premium offers may be used to bring the value of the sale up.

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | C: (402) 380-9855 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045

www.cvacoop.com