Share Facebook Twitter Google + LinkedIn Pinterest Beans had a “fundamental disconnect” last week when funds went from a short position to a long position within a week. By the close of Thursday, the bean market “bought” some corn acres back, which it didn’t really need.The biggest USDA report of the year will be released March 31. It will show how many corn acres are planned for 2016. The trade is expecting around 90 million corn acres and 83 million bean acres. Above these number expect market drops and below these numbers a rally may occur.I continue to see breakeven points for clients that favor planting corn over beans in most locations throughout the Corn Belt. The farmer’s yield potential estimates drives which crop they will grow. Many farmers don’t like to change their rotation, but even if a small percent of farmers would adjust large portions of their acres, it would affect the market.What will the large number of prevent acres from last year be planted to this year continues to be a lingering question. Those could also change the outcome of the USDA’s report.Market ActionFutures – BeansI had an order in place that got hit on Tuesday triggering a $9.20 futures sale against the Nov for about 10% of my bean production.Futures – CornI anticipate corn acres will be above 90 million acres. Therefore, I sold 5% of my expected production at $3.87 against the Dec futures. I’m not overly happy with this value, so I hope this will be the worst sale of the 2016 crop year. If it turns out to not be the worst sale, I will be much more disappointed.Options – CornThursday was the expiration date of April options. (April options are based on May futures and expire in March, seems confusing).On Jan 22nd I sold the April $3.80 corn option for an 8 cents premium (it expired worthless so I kept the 8 cents premium). On Dec 10th I had sold the Feb $3.80 options for 8 cents that also expired worthless on Jan 22nd (I kept the 8 cents). I continued the strategy rolling forward and sold a June $3.80 option for 10 cents. This option will expire on May 27th , if corn is below $3.80 I keep the premium again and my grain is still unsold. If the market is above $3.80 I’m locked into the $3.80 sale, but I keep all of the premium (8 cents + 8 cents + 10 cents = 26 cents, or $4.06 July futures). Plus, I still have the potential for additional gain when I move the sale from July to Dec futures (possible additional 15 cents).In case my assumption that corn acres will be more than 90 million acres is wrong, I bought back my May $4.40 call (placed on 9/15/15) that expires in a month. I don’t really think the market will rally to $4.40 against May futures, but I wanted to take the risk off. It only cost .8 cent (with commissions) to buy back the $4.40 call that I sold for 19.2 cents on 9/15/15. I then sold a Dec $4.40 call for 15.7 cents on Thursday. This gives me 34 cents premium (19+15) regardless of what the market does. A $4.74 ceiling is welcome with what I know today.Selling calls provides very limited downside protection (technically none, but the premium value is worth something). However, it does give some upside potential. Even if the market moves up or sideways, it allows for good premiums. While I see many benefits for selling calls, I don’t see the benefits of buying corn calls, but so many farmers do it. To me it tends to double the risk. To be profitable the market has to go up, or they will lose money on the long position (i.e. gambling). Plus, producers always have more grain to sell next year. I guess I’m glad so many people make the mistake of buying calls though. It creates a better market for me to sells the calls.PositionsHere are my updated positions for corn and beans. An est means I’m estimating what I might get based upon past history or current markets for my farm.POSITION – CORN20152016Corn Sold100%28%CBOT Price$4.58$4.38Market Carry$0.185$.25 estBasis on Farm($.35) est($.25) estCash Price$4.41 est$4.38 estPOSITION – BEANS20152016Beans Sold100%11%CBOT Price$10.79$9.20Market Carry$0.165$.25 estBasis on Farm($.60) est($.25) estCash Price$10.35 est$9.20 est Jon grew up raising corn and soybeans on a farm near Beatrice, NE. Upon graduation from The University of Nebraska in Lincoln, he became a grain merchandiser and has been trading corn, soybeans and other grains for the last 18 years, building relationships with end-users in the process. After successfully marketing his father’s grain and getting his MBA, 10 years ago he started helping farmer clients market their grain based upon his principals of farmer education, reducing risk, understanding storage potential and using basis strategy to maximize individual farm operation profits. A big believer in farmer education of futures trading, Jon writes a weekly commentary to farmers interested in learning more and growing their farm operations.Trading of futures, options, swaps and other derivatives is risky and is not suitable for all persons. All of these investment products are leveraged, and you can lose more than your initial deposit. Each investment product is offered only to and from jurisdictions where solicitation and sale are lawful, and in accordance with applicable laws and regulations in such jurisdiction. The information provided here should not be relied upon as a substitute for independent research before making your investment decisions. Superior Feed Ingredients, LLC is merely providing this information for your general information and the information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision. The contents of this communication and any attachments are for informational purposes only and under no circumstances should they be construed as an offer to buy or sell, or a solicitation to buy or sell any future, option, swap or other derivative. The sources for the information and any opinions in this communication are believed to be reliable, but Superior Feed Ingredients, LLC does not warrant or guarantee the accuracy of such information or opinions. Superior Feed Ingredients, LLC and its principals and employees may take positions different from any positions described in this communication. Past results are not necessarily indicative of future results. He can be contacted at firstname.lastname@example.org.
Allegations of attempt to sexually exploit a Class VIII girl have been levelled against the headmaster of a residential school in Kandhamal district of Odisha.According to Kandhamal District Child Protection Officer (DCPO) Rashmita Karan, the father of the victim filed an FIR on Monday against the headmaster of the residential school managed by the Scheduled Castes (SC) and Scheduled Tribes (ST) Development Department of the Odisha government. No one had been arrested till Monday evening.Victim to be counselledMs. Karan said apart from the police investigation, a parallel inquiry would also be taken up by her department. The victim would also be properly counselled so that she does not stop her education because of the incident.As per the complaint filed by the victim’s father, she escaped a sexual harassment attempt at the hands of the headmaster on April 22. Around 2.30 p.m. on that day, the headmaster had called the girl home and engaged her in some domestic work. Later he attempted to sexually exploit her, the father alleged.But the girl escaped from his clutches and ran out of the house through the backdoor. She did not return to her hostel room but reached the Daringbadi bus stand. There she was located by a relative who took her to her village.
Retired IAS officer C. Lalsawta was sworn in as the first Chairman of the newly constituted Lokayukta in Mizoram on Monday, officials said. He was sworn in at the Raj Bhavan here, they said.Governor Jagdish Mukhi administered the oath of office to Mr. Lalsawta, an official said.Chief Minister Zoramthanga, other Ministers, Assembly Speaker Lalrinliana Sailo, legislators and senior officials were present on the occasion, he said. The function was presided over by State Chief Secretary Lalnunmawia Chuaungo, younger brother of the new Lokayukta chairman.Mr. Lalsawta is a 1981-batch Bihar cadre IAS officer. He was the Principal Secretary of the Finance department in the State from 2008 to 2011. After returning to Bihar, he was made the State Vigilance Commissioner, the official said, adding that he retired in 2015. The Lokayukta would function from a rented building here.
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