Raelynn's Comments 09/04/19 3:51:49 PM
September 4, 2019
Hello all! A couple office notes to mention first….
We are now offering ACH payments! All you need to do is fill out a couple forms and give us a voided check with your bank account information. If you’re unable to come to the office, we can mail, email, or fax everything to you. A couple things to know before signing up, it will take two business days for the money to transfer. Also, once we start ACH payments, we will no longer mail a copy of the settlement to you. We are requesting an email address so your settlement can be emailed to you the same day the ACH transaction has been submitted. If you’re interested or have any questions, give me a call and I’m more than happy to discuss it with you.
It is also the time of year for defer payments. Please keep in mind that we only have 30 days to hold your grain before we have to either pay you or issue a defer. So, the sooner you can let us know the better.
As for the markets, it feels like we’ve been on a rollercoaster since May. We go through the wettest spring in history only to be begging for rain in August. All the while, the board price has been up and down $1.00+ and we’re still wondering what we’ll have to harvest this fall. One thing that has been consistent is inconsistent information! Everyone has a different opinion about our current crop so that leaves a big question mark going into harvest.
With the board closing today at 358’4 for the Dec corn futures, we’ve seen a frustrating drop from our high of 473’0 back in June. And unfortunately, we never expect to see a big rally in the fall. However, this could be the year it happens. But, we’re going to have to see some major adjustments in production from the current USDA figures to move close to the previous high. And that is due to demand. Or should I say, lack of. There are multiple countries right now with cheaper corn. However, I still think it’s worth buying back on the board any bushels coming out of the field that haven’t been priced yet. Similar to John, I think there may be 3 upcoming opportunities to see a possible rebound. First, when the combines are moving and we get our first glimpse into yields; second, when the USDA releases the final production numbers in January; and third, with a South America weather scare this winter. When buying back your bushels, I would focus on March. This will get you through harvest, the January USDA report, and part of the SA growing season. I would lean towards owning the March futures in comparison to a call because I think we’ll be limited on the upside until we see demand pick up. But if you’re not comfortable with owning futures, I would suggest getting a call out of the money. Right now, a March 390 call is at 12 cents. It’s currently 20 cents out of the money but if we see a rally, that will gain in value and would allow you to capture a big move without a lot of money wrapped up in the trade. This is also a great option for those thinking about putting your corn in storage! You get your cash this fall but you still have the top side open on those bushels until February.
Thanks for visiting Kat’s Grain and I wish everyone a safe harvest!
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