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Today we look at what the Planting Intentions report means for potential price moves this summer. Corn and soybean acres were lower than expected last week. We think acres will come up but not enough to prevent tight new crop ending stocks. Weather rallies this spring and summer could be the biggest we’ve seen in years if conditions are hot and dry. Make sure you take a listen to this week’s Turner’s Take Podcats!
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Spring & Summer Weather Rally Potential
The Planting Intentions report sets up the possibility of big weather rallies this spring and summer. If conditions are hot and dry the US planting and growing season will be challenging. Below are two supply and demand scenarios for corn and soybeans. Any loss in yield could send prices higher and the market will be volatile with each change in the weather forecast this season.
I like using options for weather markets this spring and summer. Futures will be hard to hold onto during the volatility. Here are some ideas for both old crop and new crop. Please call me at 312-706-7610 or email craig.turner@stonex.com with questions. We can always adjust these ideas based on your account, strategies, and risk/reward preferences.
Old Crop Soybean Oil – July Soybean Oil 55/60 bull call spreads are about 1.15 cents. The 50/47 Put spread is about 1 cent. You could buy the call spread and sell the put spread for about 10 to 20 ticks. Each tick in bean oil is $6
New Crop Soybeans – Nov Soybean $15 calls are about 24 cents. You could sell the $17 for 8 cents to make is a 16 cent spread for $2 of upside. The $11.60/$11.00 puts are trading about 12 cents so you pay for most of the call spread by selling a put spread but you do open yourself up to 60 cents of risk.
Old Crop Corn – $6 July Calls are 13 cents. This is a bit of a flier but if acres don’t increase and we lose 5 to 10 bpa this summer, corn could be well above $6. The $5.70/$6.20 July call spread is about 11 or 12 cents. That is a good limited risk way to play old crop corn too.
New Crop Corn – The Dec Corn $5/$6 call spread is about 25 cents. The $4.40/$4.00 put spread is 13 cents. You could probably be long the call spread and short the put spread for around 12 cents.
Interested in working with Craig Turner for hedging and marketing? If so then click here to open an account. If you are a speculative or online trader then please click here.
Interested in working with Craig Turner for hedging and marketing? If so then click here to open an account. If you are a speculative or online trader then please click here.
Interested in working with Craig Turner for hedging and marketing? If so then click here to open an account. If you are a speculative or online trader then please click here.
About Turner’s Take Podcast and Newsletter
If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes! Craig Turner – Commodity Futures Broker 312-706-7610 cturner@danielstrading.com Turner’s Take Ag Marketing: https://www.turnerstakeag.com Turner’s Take Spec: https://www.turnerstake.com Twitter: @Turners_Take Contact Craig Turner
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