Wrong Time of Year to be Bearish in the Market

March 24, 2017 02:38 PM

As bearish news continue to pile on the market, analysts on U.S. Farm Report think it’s too early have a completely gloomy outlook on the market. 

“I think when you look at from a producer’s standpoint, this is the wrong time of year to be bearish the market,” said Don Roose of U.S. Commodities. “It’s the time to buy some courage calls.” 

Roose suggests producers sell on rallies as possible weather stories develop.

“We should try and get some kind of weather scare and approach the $4 mark [in corn], the $10.20 mark on November soybeans,” he said on U.S. Farm Report. “Look for some better times ahead, but make sure you do some risk management—it’s a supply bear market here.”

The warmer than normal winter in the U.S., coupled with dry weather already creeping into the Corn Belt, are two factors Sue Meyer of Ag & Investment Services is watching. 

“This year does appear like it could be a year of weather concerns for production,” said Meyer. “Volatility in the options hasn't been very aggressive. There are plays that you can do going out to the September timeframe, or the September contract, by buying some out-of-the-money (OTM) calls.”

She says some of those calls can be for as low as 4 cents. 

“It's a little insurance policy, and then you can tread on from there as to how you operate,” she said.

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