|
| Grains seeing some pressure from fund selling due to the the weather forecasts showing decent planting conditions ahead of Thursdays USDA report.
South America numbers are going to start to take the back seat to the US numbers very soon. But as for this report, Brazil is still something to keep an eye on.
Estimates for the Brazil crop are:
• Corn: 121.75 vs last months 124
• Beans: 151.68 vs last months 155
The CONAB comes out a few hours before the report. Last month they had 112.75 for corn and 146.86 for beans.
Why could Brazil be a surprise?
USDA reports are always a flip of a coin, we all know that. However why would Brazil bean basis firm roughly +90 over the course of a few weeks if they just harvested this massive crop?
Options are still very cheap and implied volatility is still very low as we head into the growing season.
So for those of you that are worried about the downside risk of this report, do not be afraid to buy some protection as insurance.
For those of you with grain on storage in an elevator, it seems to make more sense to sell the grain and re-own it with a call because the calls cost less than the storage in many cases, and in almost all cases it is cheaper than the storage along with interest.
Until enough grain moves off of delayed price, the elevators have little incentive to firm basis thus they continue to hold farmers hostage…
Listen to today’s audio where we go over the best ways you can play this upcoming report as well as how you should be preparing for this upcoming weather market
Listen Here: https://txt.so/B4rtSQ
| |
|
USDA & CONAB in 2 days - market audio comments
