Market Report

Dow -64.47
S&P -8.42
Nasdaq -16.02

U.S. Stocks were lower this afternoon as investors stayed on the sidelines ahead of the Feds rate meeting. This week Federal Reserve Policy makers are scheduled for a two day meeting Wednesday and Thursday. All eyes on the feds as they make their rate decision later this week on whether or not to make its first interest rate increase since 2006.
Gasoline – Oil prices slid today on concerns about gasoline demand and fresh indications that the war for customers in the global crude market hasn’t abated. Light, sweet crude for October delivery recently traded down 97 cents, or 2.2%, to $43.66 a barrel on the New York Mercantile Exchange. Brent, the global benchmark, fell $1.66, or 3.5%, to $46.48 a barrel on ICE Futures Europe.

Gasoline prices were trading at their lowest intraday prices since January, with futures recently down 4.3% at $1.3116 a gallon. Looks like we will be seeing lower prices at the pump.

Iphone – The hot new ticket is the…..wait what?….Iphone 6S, yet another Iphone 6 hits the market for preorder over the weekend, though apple has not released the results of the preorder weekend, it is supposedly a success. For me they are just too darn big…. I still want my phone to fit my pocket. But the good news it Apple is still one of the top 10 Stocks to own if Feds raise rates per Goldman Sachs in an article I read this morning in the Wall Street Journal, you can read more here.

http://blogs.wsj.com/moneybeat/2015/09/14/goldman-says-own-these-10-stocks-when-the-fed-raises-rates/

Grain Markets @ Close
Dec Corn +6 ½ @ $3.93 ½
Nov beans+10 @ $8.84 ¼

USDA – A lot to talk about in general this week, starting the morning off with bullish sentiment.  All likely still positioning post USDA report, the numbers can be seen below:

Corn Yield lowered from 168.8 down to 167.5 which lands production at 13.6 billion bushels, down 4 percent from last year’s record crop.  The trade seemed to be expecting more of a reduction, however if this comes to fruition this year would still be the second highest yield and 3^rd largest production ever in the U.S.

Beans the USDA lowered old crop ending stocks by 30 million, but note they raised new crop yield from 46.9 to 47.1 which seemed to get attention.  However that’s only .2 bpa……

Corn – If the board continues to rally and close above $3.95, the next resistance line is $4.02 for Dec ’15.  Most of you know I have been a bear since December last year….however becoming much more bullish over the last 30 days, I am a longer term bull for now.  In my Monday email on 8/24 I said, “I have mentioned verbally to many producers that I am not as negative on corn.  It just seems corn wants to stay in the $3.50-$4.00 range” I continue to believe this, in fact, I am confident we will surpass $4.00 between now and July ’16.  Possibly even the potential to reach $4.50.  It seems likely to have some sort of “story” between now and summer that can give us some upside potential  It does not necessarily have to be grain related, there are also macro markets and geo political factors.  This is part of the reason I am hesitant to sell unless we see a rally.  Today offering a bit of a rally, I will circle back to my strategy last week.  It seems the opportunity is upon us to sell a Dec ’16 $4.50 call and get .26/bu.  Keep in mind this is a marginable position in brokerage.  You can also do this with our Bonus Premium contract and get .20/bu.  This premium can be added to a cash sale, HTA, or Extended Price contracts.  What does this mean?  It means you have a $4.50 offer out there for 2016 Corn, if the market closes above $4.50 on November 20^th you will need to deliver, if the market closes below, then do nothing and keep the premium money.

Beans – Up this morning, but hoping we get the ooomf needed to push us above $9.00 again.  Definitely more concerned about the bean prices moving forward.  As long as the US Dollar remains strong and South America continues to provide less expensive beans, our exports are likely to be impacted.  Today we made a run at and bounced off $8.88 ½  if we can close above that, our next resistance line is $9.04

Strategy:  With some strength in the markets, let’s not forget making offers.  Choose a profitable level for your operation and make the offer.  Either cash contract or HTA.

Blog:  Okay, so if you have not seen our blog page, you should!  There is a lot of good stuff on there and I have the good fortune of being the blogger for Tuesday’s post.  So if you are interested in “The Anatomy of an HTA” then go here and check it out tomorrow after lunchtime, and let me know what you think.

For Fun: Remember is a kid, climbing trees, dreaming of a tree house or a fort.  Maybe you were lucky enough to have one.  I did not, but the desire to build one is still there….but life interferes and other things become more pressing, and lack of a good tree creates a small obstacle.  Though there are adults whom have bitten the bullet and in some cases went all out on their treehouses.  Some actual works of art, some probably cost more than my house.  Incredible to see what people have done.  Here is a video of several tree houses that will blow your mind.  https://www.youtube.com/watch?v=5qdhmhheJuI

Greg Mockenhaupt

ProEdge Risk Management Consultant

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

1007 County Road O

Oakland, NE 68045

www.cvacoop.com