Play Turner’s Take Ag Marketing Podcast Episode 277
Podcast: Play in new window | Download
Subscribe: RSS | Subscribe to Turner's Take Podcast
If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes!
New Podcast
It is June, corn and soybean stocks are tight, and we are in a weather market. There is a WASDE report this week on June 10th and I don’t think anyone is paying attention to it. It is all about the weather between now and July 4th. We have some ideas on price ranges, trading patterns, and how to get through the uncertainty and volatility that will occur this month. Make sure you take a listen to this week’s Turner’s Take Podcast.
If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free! You may also click here to register for Turner’s Take.
Weather Market
According to the latest 6-10 day forecasts temps will be higher than normal and precipitation will be lower than normal. A lot of the weather services are calling for much of the same between now and July 4th. A weather market adds premium every day until we see rain in the forecast.
Corn: I like buying the $7/$8 Dec 21 call spread and selling the $5.00/$4.50 put spread. You can get that done under a dime. Spec traders will be looking for a big weather market. Farmers can use it to sell cash grain into this June and July.
Soybeans: I like buying the $15/$17 Nov 21 call spread and selling the $13/$12 put spread for around 30 cents. I don’t see a lot of risk right now below $13. Spec traders get upside exposure and farmers can use the spread to sell into at the elevator.
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.
Floors for Farmers
While I am still bullish on the grain markets right now, I know there is a lot of downside risk for farmers on grain not sold or hedged. I don’t think you need a floor for soybeans. Soybeans are going to be tight either way the next marketing year. I think soybeans are between $12 and $17 all year. Nov 2021 $12 puts are 7 cents. If you need a floor you can protect $12 for seven cents.
I feel differently about corn. We could see a few million additional acres and if the weather gets better and we have trend line yields or better, corn could be in the $4s across the board at harvest this fall.
Dec 2021 Corn | The Dec 2021 $5.50 put is about 37 cents. You could buy that and then sell the Aug Short Dated $5.50 put for 17 cents. They expire July 23rd and the total package would cost 20 cents. The idea is Dec Corn stays above $5.50 for at least the next few weeks. Either the Aug put expires worthless or we try to buy it back cheap on the next weather rally.
Farmers can also sell the Dec $8/$9 call spread for 10 cents to help bring down the cost of the floor even more. When we add in the short call spread the Dec $5.50 put floor strategy costs about a dime. The risk is if Dec 2021 corn goes to $8 (you will be short at $8 but that can’t be a bad thing for your marketing) and if corn tanks fast. That short short dated Aug $5.50 put needs to time to erode so that is a risk too.
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
Risk Disclosure
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
© 2023 StoneX Group Inc. All Rights Reserved
You must be logged in to post a comment.