12/10/2024 Christmas Miracles

On the Grains
Good USDA S/D report morning. I love the start of the day as it offers a promising new start, yet it feels like the USDA is going to have to prove something to the market i.e. lower carryout and likely a sub 1.90 or even 1.85 corn carryout print before we see much reaction today. Also, the soybeans, without some sort of Christmas miracle, could weigh on the entire row crop complex. Bottom line, lower your expectations and you won’t be disappointed, that way you can still finish the day on a positive note. If we see a negative number in corn, we can hope that the $4.33 (50 DMA) or the $4.28 retracement support holds. With the funds already long, I am taking a cautious approach to today’s report and for a producer with unsold grain that may want some short term protection against a whopper on the downside, we do have weekly options. The $4.40 at the money puts are less than 3-cents and while it doesn’t give you a lot of time it does cover you till the end of the week and protect you from a washout (you would end up with a short $4.40 March position at the close on Friday if the board is less than $4.40). I like these inexpensive options as I don’t want to dip into my line of credit. I’m sure that train is coming around the mountain quick enough anyways.