Current Marketing Thoughts
Kevin Van Trump
Kevin Van Trump has over 20 years of experience in the grain and livestock industry.
One Last Thought Before Tomorrow's Report
Mar 30, 2011
What to do tomorrow???
I have spoken with many of you on the phone. One last thought as we head into the report. Remember, where there is volatility there is opportunity. Tomorrow's volatility will create huge opportunity for some...while others will squander it.
A couple of thoughts - If we break hard to the down side you may want to consider selling "put" premium into the break. I know it may be scary at the time, but if the market is called significantly lower the put premiums will be inflated dramatically. A thought is to sell the puts at a level of insurance. In other words, if your insurance covers you at $5.50 you may want to consider selling the Dec $5.50 put and collecting what could be $0.75 or more. You have to agree that if you need your insurance then the crop is in trouble and higher prices are coming our way. Meaning your put would expire worthless and you would collect the premium and hopefully cover the cost of your insurance. If we continue to break you would essentially be long from $4.75, which is maybe not a bad play considering your insurance is much higher.
The other idea to start kicking around is if we move significantly higher. In this case you may want to consider selling the higher up call premiums in very small doses as HTA type sales. Some of you who aren't 20% sold as of yet should definitely use the rallies, if we get them, to make a few sales. Some of you may want to consider trucking some beans into Illinois. I have heard that producers from Wisconsin are making the trip, because in some areas the basis is even in both corn and beans with no line at all to unload...
I truly believe after we get past this report (it may take a couple of days), the bulls will be back in charge. These markets have liquidated the past few weeks as the big boys have tried desperately to reduce their size heading into this report. Let them get past these hard to digest numbers, and watch what they do with any type of weather scare or crop concerns.
--- Here is what you will be looking for tomorrow ----
Corn planted acres expected to be around 91.85 million. The USDA number released at their "Outlook Forum" was 92 million. The low end of the range is around 91 million with the high end of the range around 92.5 million. Last year we planted 88.192 million corn acres.
Corn stocks were expected to be around 6.690 billion bushels. Low end guess was at 6.552, while the high end of the guess was at 6.880
Soybean planted acres expected to be around 76.85 million. The USDA number released at their "Outlook Forum" was 78 million. The low end of the range is around 74.5 million with the high end of the range around 78.5 million. Last year we planted 77.404 million acres.
Soybean stocks were expected to be around 1.299 billion bushels. Low end guess was at 1.266, while the high-end guess was at 1.366
Wheat planted acres expected to be around 57.3 million acres. The USDA number released at their "Outlook Forum" was 57 million. The low end of the range is around 56 million with the high end of the range around 58.5 million. Last year we planted 53.603 million acres. Spring wheat seedings are expected to be around 13.72 million.
Wheat stock expected to be around 1.399 billion bushels. Low end guess is around 1.275, while the high end guess is around 1.488. Last March we were at 1.356, this past December we were at 1.928