Last Week and the Week Ahead - Blue Line Futures

New Crop Weekly Options

New crop weekly options for corn and soybeans start trading this week.  This will give producers along with other market participants a lot more flexibility in hedging/speculating in the new crop market. 

• How they’re designed:
  • Underlying futures are based on December Corn and November Soybeans
  • Option expiration every Friday listed up to four weeks out from February through August
  • Same tick size, strike interval, and expiration style as standard options

• How you can benefit

  • Hedge around high-impact events such as USDA WASDE reports pinpointing New Crop exposure.
  • Cost effective way to gain exposure to longer dated contract early in the North American crop year.
  • Overlay hedge taking advantage of short-term market fluctuations.
  • Define short-term spread risk when used with other Corn and Soybean options.
• If you want to learn more about using futures and options, our trade desk is here to help! 
  • Email Oliver@BlueLineFutures.com or Call/Text 312-837-3938

Fund Positioning

• Corn:  Managed Money are net long 192,137 futures/options contracts, up 42,533 from the previous week.  Broken down, that is 253,836 longs VS 61,699 shorts.  
• Soybeans:  Managed Money are net long 168,298 futures/options contracts, up 36,594 from the previous week.  Broken down, that is 186,794 longs VS 18,496 shorts.  
• Soybean Meal:  Managed Money are net long 150,939 futures/options contracts, up 8,229 from the previous week.  Broken down, that is 153,531 longs VS 2,592 shorts.  
• Wheat:  Managed Money are net short 65,089 futures/options contracts, up 1,955 from the previous week.  Broken down, that is 53,729 longs VS 118,818 shorts. 

Brazil

AgResource wrapped up their Brazilian crop tour.  They estimate Brazil's soybean crop at 153.5mmt.  This compares to the USDA's estimate of 153.00mmt.

Argentina

Drought conditions in Argentina have been a hot topic for the last several weeks.  More favorable conditions made their way into the forecast with problematic areas of Argentina receiving good moisture over the weekend. Analysts are expecting this to lead to a weaker Sunday night open in the grain markets.  Could this weekend's rain end the trend of lower production estimates for Argentina?  Time will tell.  Last week's ratings showed: 

• Good/Excellent conditions for Argentine soybeans stand at just 3%.  60% of the crop is rated as poor. 
• Good/Excellent conditions for Argentine corn are at 5%.  47% of the crop is rated as poor.

Weekly Export Sales

Corn has been the big laggard in the weekly export data, but last week was a silver lining.  Last week's report showed net sales of 1,132,100 MT (44,568,795 bushels) for 2022/2023 were up noticeably from the previous week and from the prior 4-week average.

Lunar New Year

China is on holiday, celebrating their Lunar New Year.  This may impact and limit the amount of business that gets done next week, including import/export

Drought Monitor

Below is the most recent drought monitor.  Severity is lessening in many areas, mostly the eastern Cornbelt.  

Our daily commentary covers the fundamentals and technicals for: Grains, Livestock, Energies, Metals, and More! 

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If you have any questions about markets, trading, or opening an account

You can email us at info@BlueLineFutures.com or call 312-278-0500

Futures trading involves a substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete, and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.