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| Grains mixed as the choppy trade continues. This week is going to be all about the USDA report.
We had crop progress today which was nothing special. Corn is 3% planted vs 2% on average. These reports are going to start meaning something in a few weeks closer to late April and early May.
As for the report, majority thinks we will see corn stocks a little tighter and bean stocks a little looser in this report.
Most of the time this isn’t a major report. We don’t tend to get any major changes until May when we start getting the new crop estimates.
One thing to watch in this report is Brazil. Brazil bean basis is +90 cents better than it was a few weeks ago. Their pipeline isn’t filled despite this huge crop they supposedly have. This could be something that surprises if we get one.
We are going to be in a weather market for the next several months. With that comes extreme volatility and price swings.
Weather is going to create more volatility the smaller our stocks are. The looser our stocks, the less weather will mean. If we have plenty of supply we can afford to lose a bit.
The time to be making sales is May or June when we get that weather premium. When you don’t know what you are going to raise.
When the buyers and the farmers start getting nervous, typically we start to see farmers buying back sales they made. Instead of doing that, that is when you want to be making the sales.
So what should you be doing ahead of this USDA report?
If you made sales now is still a decent time to re-own if you want to stay in the game. If you got your books closed there is nothing wrong with looking forward to new crop. It depends on your situation.
Options are still pretty cheap. As we get into growing season those options are going to get more expensive as implied volatility should increase. If you made sales anytime in the last several years, buying now gives you the opportunity to buy it cheaper than where you sold it at.
Listen to todays audio where we go over what you should be doing before and after this USDA report whether you are oversold or undersold, and what you should be doing if you have grain on storage…
Listen Here: https://txt.so/6fh6jq
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USDA this week. What you should be doing - audio comments
