Play Turner’s Take Ag Marketing Podcast Episode 277

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It is June, corn and soybean stocks are tight, and we are in a weather market.  There is a WASDE report this week on June 10th and I don’t think anyone is paying attention to it.  It is all about the weather between now and July 4th.  We have some ideas on price ranges, trading patterns, and how to get through the uncertainty and volatility that will occur this month. Make sure you take a listen to this week’s Turner’s Take Podcast.

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Weather Market 

According to the latest 6-10 day forecasts temps will be higher than normal and precipitation will be lower than normal. A lot of the weather services are calling for much of the same between now and July 4th.  A weather market adds premium every day until we see rain in the forecast.

Corn: I like buying the $7/$8 Dec 21 call spread and selling the $5.00/$4.50 put spread. You can get that done under a dime.  Spec traders will be looking for a big weather market. Farmers can use it to sell cash grain into this June and July.

Soybeans: I like buying the $15/$17 Nov 21 call spread and selling the $13/$12 put spread for around 30 cents.  I don’t see a lot of risk right now below $13.  Spec traders get upside exposure and farmers can use the spread to sell into at the elevator.

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Floors for Farmers

While I am still bullish on the grain markets right now, I know there is a lot of downside risk for farmers on grain not sold or hedged. I don’t think you need a floor for soybeans. Soybeans are going to be tight either way the next marketing year.  I think soybeans are between $12 and $17 all year.  Nov 2021 $12 puts are 7 cents.  If you need a floor you can protect $12 for seven cents.

I feel differently about corn. We could see a few million additional acres and if the weather gets better and we have trend line yields or better, corn could be in the $4s across the board at harvest this fall.