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| Grains continue their choppy action ahead of the USDA report on Thursday.
As we go down, you’ll see the nearby contract taking it on the chin more than the deferred.
When we are talking about re-owning something, when grains are going down the front month will lead us down and the deferred will hold in there.
The opposite will tend to happen when we are going up. The front will lead us higher and the deferred will lag behind.
So keep that in mind if you are looking at courage calls or looking to get protection. This happens nearly 80% of the time. The only exception would be in a weather rally because the spreads could already be wider.
Your risk on protection isn’t really protecting new crop, it’s protecting what’s going to go down the most. And if you are looking to reown you’re going to want to look at what is going to gain the most.
So that is a way you can utilize spreads to your advantage.
As for the markets, there is virtually zero news as the markets continue to trade sideways.
Options are cheap right now. But they are cheap for a reason. That is because the market is not anticipating any major moves.
So no one is really expecting Thursday’s USDA Report to shake up the headlines. Which historically Februarys report isn’t usually a market mover.
The ultimate goal in grain marketing is to be comfortable. Whether prices go up, or if they go down.
So what are some things you can do before the report to get comfortable?
Listen to todays audio where we go over what you should be doing if you are oversold, undersold, things we can expect from the USDA report & more
Listen Here: https://txt.so/bb3uzO
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Market comments - getting comfortable ahead of USDA report
