Today’s Market Report

December 7, 2015 Leave a comment


Markets 12/7/15 @ 10:47am

Dow -167.58
S&P -20.92
Nasdaq -42.96

Oil prices dropped to near seven-year lows today as investors continued to digest the decision to continue pumping crude at near-record levels into an already oversupplied market.  OPEC said at a meeting Friday that it will maintain its current production levels, which exceed the group’s output target of 30 million barrels a day.

 

The US Dollar posted its worst day in six years on Thursday last week dropping more than 2%, seems to bring more interest into commodities.

 

Grain Markets 12/7/15 @ 10:46am

Mar Corn -7’0 @ $3.74’4
Jan Beans -10’4 @ $8.95’4

 

Corn gets a bit of a boost last week from the drop in the U.S. Dollar, but still only by a few cents.  Corn continues to chop staying in the 3.50-4.00 range since January with the exception of the short lived bounce resulting from the USDA Report in June.  So it’s not surprising we sit in the $3.75 area for March Corn.  The funds remain short corn just under 150,000 contracts.  That weather headline I continue to hope for may give us an opportunity.  I also want to again bring up the importance of the U.S Dollar and Crude prices.  At their current levels they seem to directly influence commodities.

 

Beans broke through the $9.00 resistance level last week setting the stage for resistance at the $9.15 area possibly up to $9.34.  The bean market has continued to head up for 2 straight weeks after the key reversal on Monday November 23rd.  Though the markets seems to rally for technical reasons, there are other uncertainties that may be a factor.  A newly elected president in Argentina, Brazil looking to impeach the current president, and of course weather.  Over the last two weeks we have added .65 to the price of beans.  It may be time to reward the rally.  Unless we get some additional bullish news, it’s likely we will see the upward momentum will fizzle out.

 

Greg Mockenhaupt

ProEdge Risk Management Consultant

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

1007 County Road O

Oakland, NE 68045

Filed under News Tagged with , ,

Market Report

November 17, 2015 Leave a comment


Markets 11/16/15 12:02pm

Dow +100.31
S&P +11.42
Nasdaq +10.73

I am sure you heard of the terrible attacks in Paris killing at least 129 people.  After an initial wobble, financial markets mainly shrugged off the effects of Friday’s terrorist attacks in Paris, underscoring how investors increasingly look beyond these type of events, so it seems.

Grain Markets 11/16/15 12:08pm

Dec Corn +0’6 @ $3.59’0
Jan Beans +2’0 @ $8.57’2

 

With harvest pretty much wrapped up we have little news from the U.S. that can change the markets now.  We know what we have, weather is now not much concern.  Oil continues to grind lower and the US dollar keeps creeping up.  The odds keep stacking against grains.

 

Corn lower on the open despite good exports, good news and the markets doesn’t seem to care.  Corn has not given us too much excitement by way of headlines and with little change from the USDA the only thing to look forward to is a weather story out of South America or some sort of geopolitical event.  As I mentioned in a text last week the tight trade range has got me nervous.  I suspect we will continue to grind lower (lower highs/lower lows) until we receive some sort of positive news.  I think $3.50 in the cards, possibly breaking through and heading toward $3.40.  I hope we find some support or a headline before we head lower.  I will add if oil prices continue to stay low, it pressures ethanol demand.

 

Beans the focus is now South American Production and demand from China.  Also hoping for a weather story out of South America to boost our opportunities for a sale.  The strength in the US dollar is going to remain a variable in export sales.

 

Exports

EXPORTERS SELL 952,500 METRIC TONNES OF CORN FOR DELIVERY TO MEXICO DURING THE 2015/2016 MARKETING YEAR- USDA

EXPORTERS SELL 487,680 METRIC TONNES OF CORN FOR DELIVERY TO MEXICO FOR 2016/2017 DELIVERY- USDA

EXPORTERS SELL 180,000 METRIC TONNES OF SOYBEANS FOR DELIVERY TO CHINA FOR 2015/2016 DELIVERY- USDA

 

Strategy:  When you opt to sell cash grain, it is always an option to buy a call to participate in upside potential.  This in effect puts in a floor with upside.

 

For Fun: So you may recall I mentioned previously that Ferrari (Ticker “RACE”) went public.  For the early adopters it hasn’t fared well.  Opening up at $60 a share, now grinding down to a low of $48.83, the luxury car maker has received a $40 price target from Evercore.  None of this means anything to me, and I don’t know any farmers with a Ferrari, but for $40 my two boys might just get a share for Christmas, why?  Well it’s just cool to own Ferrari, that’s why.

image001

Greg Mockenhaupt

ProEdge Risk Management Consultant

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

1007 County Road O

Oakland, NE 68045

Filed under Community Tagged with , , ,

Market Report

November 10, 2015 Leave a comment


Markets 11/9/15 @ 12:13pm
Dow -221.10
S&P -27.03
Nasdaq -67.32

 

I have been happy to see the macro markets be less influential to grains, but as of Friday some movement in Oil and the USD has me thinking the market will have to listen again.

 

The US Dollar surged from 98.00 to 99.47 on Friday, pulling back today yet still sitting above 99 which is bringing us back to the levels we haven’t seen since April 23rd.  If you remember these levels, then you know it seemed to be a primary influencer in the grain markets.  The strong US Dollar can potentially reduce exports as other countries pricing becomes more attractive.  The good news is we use most of our own corn locally, which leads us to OIL.

 

image016

Oil (Dec WTI) finished last week on the soft side in fact lost more than $2 a barrel currently with the next support line found at $43.00 while this may be good for fuel hedgers, it doesn’t mean a lot for ethanol demand.  Just something to keep your eye on as oil is an outside market which has the power to damage corn demand for ethanol use.

 

image017

image018

Grain Markets 11/9/15 @ 11:58am

Dec Corn -5’0 @ $3.68’0
Jan Beans -0’4 @ $8.66’6

USDA Report tomorrow at 11am

 

Corn – The trade is anxious for the USDA S&D Report scheduled for tomorrow at 11am.  Not much corn left out in the fields the USDA currently estimates corn at 168 Bpa will we see it push above 170?  It seems most are concerned this will be a bearish report.  Currently we have strong support at $3.60, but with the market sitting at $3.68 with pre-report positioning, a very negative report could easily push us through it for the short term.  Though I still believe the $3.50-$4.00 trade range I mention in the past remains relevant.  In fact, if we go back down to those levels a buy back strategy may be in order for those with a bullish position.

 

Beans – The bean market continues to slip to the low end of its trading range, Jan beans touching $8.58 on Friday.  Keeping in mind the contract low is $8.57, we are dangerously close to making new contract lows.  Unfortunately, I don’t believe the market is supportive enough to keep it from breaking through and it will be interesting to see where we find support in the event of a bearish report.  On the bullish side, weather can become a factor in Argentina or Brazil.  With all the negative news, and positive news can be very impactful.

 

For Fun
As I drive through Fremont, NE I see a huge parking lot of shipping containers.  It has always intrigued me to see what people make from these things.  I have seen outdoor bars, to cabins.  But little did I know there are people that build complete homes and offices from shipping containers!  Seems crazy, almost like a bad idea, but turned out some are quite impressive.  Then I ask myself, did they actually save any money at all!  I would think the small lake cabins yes, but the huge structures, I would think they spent more?  None the less, cool to see what people create!  Popular Mechanics did a good write up if you are interested http://www.popularmechanics.com/home/how-to/g172/shipping-container-homes-460309/

image019 image020 image021 image022

Greg Mockenhaupt

ProEdge Risk Management Consultant

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

1007 County Road O

Oakland, NE 68045

Filed under News Tagged with , ,