Share Facebook Twitter Google + LinkedIn Pinterest By Jon Scheve, Superior Feed Ingredients, LLCIt would seem that the market hasn’t really reacted to the massive flooding throughout the Midwest. This is likely because the amount grain affected, currently estimated at $500 million in Nebraska alone, is relatively small. While that sounds large, the total U.S. corn crop is valued at about $60 billion and the bean crop at $40 billion. So, losses may only total about 1% of the crop across the entire Midwest.About 13% of ethanol production was estimated to have been halted last week. But that demand is small, 2 million bushels per day, relative to the estimates of what have been lost so far of maybe 250 million bushels of corn. However, if those plants stay off line for more than a couple months then the issue could become a bigger problem. Unfortunately, that lack of demand can’t be made up. It’s lost forever because most plants were running at near full capacity.The long-term issue from the flooding may be that fewer acres of corn are planted this spring. This issue will be debated until late June. While there may be some prevent plant acres, there is still time for a lot of acres to dry out before planting. Spring weather will dictate this outcome over the next 60 days.China bought 12 million bushels of corn last week. While this isn’t bearish news, it will take many more purchases for the market to get excited. After all, just 2 weeks ago the USDA suggested the export pace would slow by 75 million bushels this year. It would seem unlikely China would continue to buy substantial U.S. corn when Brazil and Argentina’s harvest will be in full swing next month and priced to move because of limited storage in the southern hemisphere. However, a trade deal could force their hands, if we ever make one.Corn bounced off of a recent low this week, indicating end users may have found a level they are willing to buy. Plus, funds seem less likely to continue shorting the market and may even be covering some of their recent sales back in as we enter the beginning of another growing cycle. Farmers weren’t selling at the bottom, but did show a little interest during this week’s rally. Market actionDuring this ongoing sideways market below breakeven, I continue to sell calls and straddles to pick up premium on my unsold ’18 corn, so I can eventually try and manufacture profitable prices. Following is this week’s trade results. Sold straddleOn 2/22/19 when May corn was around $3.85, I sold an April $3.80 straddle (selling both a put and call) and collected just over 12 cents total on 20% of my 2018 production. What does this mean?If May corn is $3.80 on 3/22/19, I keep all of the 12 cents.For every penny corn is below $3.80 I get less premium penny for penny until $3.68.For every penny higher than $3.80 I get less premium penny for penny until $3.92.At $3.92 or higher I have to make a corn sale at $3.80 against May futures, but I still get to keep the 12 cents, so it’s like selling $3.92.At $3.68 or lower I have to take a loss on this trade penny for penny below $3.68. My trade thoughts and rationale when placing the straddle on 2/22/19This trade is most profitable in a sideways market, which I think is the most likely scenario right now. If prices don’t rally, I can use this premium to help push a final sale to profitable levels. If the market rallies, I’m happy selling 20% of my production above $3.90. What happened?It’s been a roller coaster ride for corn the last 4 weeks.1st 2 weeks — market fell 25 cents3rd week — market rallied 10 cents4th week — market rallied another 10 cents.On Friday morning when May futures hit $3.80, I bought back both sides of the straddle for 2 cents. After commissions, I made 8 cents profit on this trade (12 cents collected – 2 cents to buy it back and – 2 cents in commissions).I could have just sold corn at this point, and I would have got more versus just selling outright a month earlier when I placed the straddle trade. Corn closed Friday at $3.78 + .08 options premium = $3.86 vs. $3.85 when I placed the straddle trade. I didn’t sell corn Friday because I think there is still upside potential and instead, I repeated this type of trade as well as added another (see below). New corn tradesNew trade – Sold call:On 3/22/19 when May corn was at $3.80, I sold a May $3.80 call for 8 cents – expiring 4/26/19 on 10% of my ’18 production. What does that mean?If corn is trading below the strike price when this option expires I keep the 8-cent premium and add it to another trade later.If corn is trading above the strike price when this option expires I have to sell corn for the strike price of $3.80 PLUS I keep the premium. This means a price of $3.88 on May futures. My trade thoughts and rationale on 3/22/19Since I still need to sell some of my remaining ’18 corn, but I don’t want to sell $3.80 May futures, this trade allows me to try and get higher values than are available today or even a month ago. If the market stays sideways, I keep the 8-cent premium. There isn’t downside protection with this trade, but that isn’t the goal for this trade. New trade – Sold straddleOn 3/18/19 when May corn was around $3.71, I sold a May $3.80 straddle (selling both a put and call) and collected 19 cents total on 20% of my 2018 production. What does this mean?If May corn is $3.80 on 4/26/19, I keep all of the 19 centsFor every penny corn is below $3.80 I get less premium penny for penny until $3.61.For every penny higher than $3.80 I get less premium penny for penny until $3.99.At $3.99 or higher I have to make a corn sale at $3.80 against May futures, but I still get to keep the 19 cents, so it’s like selling $3.99At $3.61 or lower I have to take a loss on this trade penny for penny below $3.61. My trade thoughts and rationale when placing the straddle on 3/18/19As always, a straddle trade is most profitable if the market stays sideways. During the market setback over the last few weeks I’ve felt the market is valued too low. I was able to place this exact same trade a month ago at the same price, so repeating it again made sense to me. Similar to the April straddle trade, I don’t expect to make a lot on this trade, but I expect I’m unlikely to lose much on it also.When placing straddles, I’m not worried if the market rallies, because that forces me to sell at a price, I’m comfortable with selling. In this case, I’ll be happy selling another 20% of my production for $3.99. My fear with a straddle trade is always that the market will go lower. What my ’18 corn position could be in 5 weeksNow, 40% of my production is covered with sold calls or sold straddles. If I include the profit from the April straddle trade that expired today, these new trades would allow me to sell the equivalent of $4 against May futures if the corn board is anywhere above $3.80 on 4/26/19. I’ve limited my upside potential if there is a huge rally in the next month, but given the last 8 months, I would be very happy to get $4 on most of my remaining ’18 corn. Even if the market rallies significantly, I can still take advantage with sales on my ’19 unsold corn production. What if corn is below $3.80?I’ll still collect some premium on the 40% of my production until the price hits about $3.60. With the April straddle profit, if corn on 4/26/19 is:At $3.75 I can collect an average options premium of 15 cents or I can sell what is the equivalent of $3.90At $3.70 I can collect an average options premium of 12 cents or I can sell what is the equivalent of $3.82At $3.65 I can collect an average options premium of 9 cents or I can sell what is the equivalent of $3.74. What if corn is below $3.60?I would be frustrated like all other farmers as I won’t have any additional grain sold. I would also lose penny for penny on 30% of ’18 production from $3.60 and lower on this trade. While I’ve been picking up premium every month since last August selling calls and straddles to offset a drop like this, if the price is $3.60 on 4/26, I am chipping away at profits I have been making on previous trades.Historically corn prices are in an upward trend until early summer, but that doesn’t mean it can’t or won’t go down. There are still a lot of unknowns:How many planted acres will the USDA estimate on March 29?What will the planting pace be like this year in Mid-April?How could global corn demand be affected by the spread of African Swine Fever?Is a trade resolution with China completed in the next month and what does it look like?Do the funds continue to buy back their short position or add to it?While I’m doing what I think is right for my farm operation, there isn’t a perfect trade out there. I make the best decision with the information that is available to me, while trying to limit the risk exposure to my farm operation. That being said, it will be a long 5 weeks until I see what happens and I might have to make some adjustments if new information becomes available. Please email [email protected] with any questions or to learn more. 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.
JUNE 09: Kyrie Irving #2 of the Cleveland Cavaliers reacts in the second quarter against the Golden State Warriors in Game 4 of the 2017 NBA Finals at Quicken Loans Arena on June 9, 2017 in Cleveland, Ohio. Jason Miller/Getty Images/AFPCLEVELAND — Kyrie Irving’s next cross-over will come against the Cavaliers.Cleveland’s All-Star guard, who asked owner Dan Gilbert to trade him earlier this summer, was dealt Tuesday night to the Boston Celtics in exchange for star Isaiah Thomas, forward Jae Crowder, center Ante Zizic and a 2018 first-round draft pick, a person familiar with the deal told The Associated Press.ADVERTISEMENT NATO’s aging eye in the sky to get a last overhaul Pagasa: Storm intensifies as it nears PAR Ethel Booba on hotel’s clarification that ‘kikiam’ is ‘chicken sausage’: ‘Kung di pa pansinin, baka isipin nila ok lang’ Robredo should’ve resigned as drug czar after lack of trust issue – Panelo Don’t miss out on the latest news and information. The 28-year-old Thomas, taken with the final pick in the second round in 2011, can become a free agent when his contract ends after next season.His reputation in Boston was cemented when he led the Celtics through the playoffs last season despite the death of his sister on the eve of the postseason. He also had a front tooth knocked out during the second-round series against Washington and the hip injury eventually forced the team to shut him down early in the East finals, won by the Cavaliers in five games.Thomas believes he is worthy of a maximum contract and has quoted saying, “They better bring out the Brinks truck.”Cleveland is also getting Crowder, a solid perimeter defender, and a first-round pick that Boston got from Brooklyn. The package could help the Cavs reload if James opts out of his contract next summer and leaves Cleveland for a second time.The Vertical first reported the possible blockbuster deal.ADVERTISEMENT Since Irving made his stunning request, the defending Eastern Conference champions have been looking for a trade partner. They found the perfect one in the Celtics, who will now build around Irving and newly signed free agent Gordon Hayward.Irving’s first regular-season game for Boston will be against Cleveland as the Cavs will host the Celtics on Oct. 17 — a date being circled by fans already.FEATURED STORIESSPORTSSEA Games: Biñan football stadium stands out in preparedness, completionSPORTSPrivate companies step in to help SEA Games hostingSPORTSBoxers Pacquiao, Petecio torchbearers for SEA Games openingIrving, who made the biggest shot in Cleveland history to win the 2016 NBA Finals, is joining a Boston team that lost to Cleveland in last season’s conference finals and has been unable to unseat LeBron James and Co. in recent years.The Cavs were concerned about getting equivalent value for Irving, who has two years remaining on his contract, but in the 5-foot-9 Thomas they are adding one of the league’s most dynamic playmakers. Thomas averaged 28.9 points last season. He missed most of the East finals with a hip injury. MOST READ View comments Celebrity chef Gary Rhodes dies at 59 with wife by his side Hotel says PH coach apologized for ‘kikiam for breakfast’ claim Lacson: SEA Games fund put in foundation like ‘Napoles case’ Robredo: True leaders perform well despite having ‘uninspiring’ boss PLAY LIST 02:49Robredo: True leaders perform well despite having ‘uninspiring’ boss02:42PH underwater hockey team aims to make waves in SEA Games01:44Philippines marks anniversary of massacre with calls for justice01:19Fire erupts in Barangay Tatalon in Quezon City01:07Trump talks impeachment while meeting NCAA athletes02:49World-class track facilities installed at NCC for SEA Games The Cavs drafted Irving with the No. 1 overall pick in 2011. He struggled in his first few seasons but blossomed in recent years alongside James. However, that didn’t seem to be enough for the 25-year-old, who has wanted to be the prime player and focal point on his own team.He got his wish.Sports Related Videospowered by AdSparcRead Next Mayweather, McGregor trade verbal jabs as countdown begins LATEST STORIES Trump signs bills in support of Hong Kong protesters
Golden State Warriors guard Stephen Curry (30) smiles after making a 3 point shot against the Cleveland Cavaliers during the second half of an NBA basketball game Friday, April 5, 2019, in Oakland, Calif. (AP Photo/Tony Avelar)OAKLAND, Calif. (AP) — Golden State took another step toward securing the top seed in the West, yet coach Steve Kerr has some legitimate concerns as the Warriors close in on the postseason.Specifically, Kerr is bothered by the Warriors’ turnovers and rebounding, two issues that cropped up again and turned what looked to be another blowout into a closer-than-needed 120-114 win over the Cleveland Cavaliers on Friday night.ADVERTISEMENT Cayetano: Senate, Drilon to be blamed for SEA Games mess Duterte wants probe of SEA Games mess That’s why Kerr seemed so bothered by his team’s breakdowns.“They had about 17 or 18 more possessions than we did,” Kerr said. “That’s kind of our specialty. We like to give other teams an advantage and then have to shoot our way out of it.”Green had 20 points and eight rebounds, Kevin Durant added 15 points and eight assists, and Quinn Cook scored 14 to help the Warriors (55-24) inch closer to clinching the Western Conference in their second-to-last regular-season game at Oracle Arena.With 16,283 points, Curry trails only Wilt Chamberlain (17,783) and Rick Barry (16,447) on the Warriors’ career scoring charts.The Warriors need one more win or a loss by Denver to secure the top spot and home court advantage in the West.ADVERTISEMENT TIP-INSCavaliers: Brandon Knight was called for a technical foul in the third quarter. … Thompson returned to the lineup after getting a day off Thursday in Sacramento. … Matthew Dellavedova remains in concussion protocol.Warriors: Klay Thompson scored 11 points and went 1 of 7 on 3s. … DeMarcus Cousins (load management) and Andre Igoudala (sore left toe) were held out.UP NEXTCavaliers: Host San Antonio on Sunday.Warriors: Host the Los Angeles Clippers on Sunday.Sports Related Videospowered by AdSparcRead Next Private companies step in to help SEA Games hosting Trending Articles PLAY LIST 00:50Trending Articles00:50Trending Articles03:12Kevin Durant out with Achilles injury; to undergo MRI on Tuesday02:42PH underwater hockey team aims to make waves in SEA Games01:44Philippines marks anniversary of massacre with calls for justice01:19Fire erupts in Barangay Tatalon in Quezon City01:07Trump talks impeachment while meeting NCAA athletes02:49World-class track facilities installed at NCC for SEA Games02:11Trump awards medals to Jon Voight, Alison Krauss LATEST STORIES View comments Curry is a big reason why Golden State is back on top despite a sometimes tumultuous season. The two-time MVP made 9 of 12 3s and had seven assists in the wire-to-wire win, the Warriors’ ninth consecutive over the Cavaliers.“You knew Steph was going to have a good night because he had a tough night last night,” Warriors coach Steve Kerr said. “He rarely has an off night two nights in a row. He was great right from the outset tonight.”Collin Sexton scored 27 points, one night after becoming the third rookie in Cavaliers history to reach 1,300 points. Cleveland has lost seven straight.“I thought our guys did a good job of continuing to compete and taking the ball to the basket,” Cavs coach Larry Drew said. “We recognize the fact of where we are and who we are at this particular stage. But again, the most important thing is that we continue to plat at a high level, and we did that tonight.”Golden State led by 21, then had to hold off a late flurry by Cleveland.Larry Nance Jr. scored seven points as part of a 12-4 run. Then, Sexton scored on a 3-pointer and reverse layup to pull the Cavs within three points at 115-112.Curry made his ninth 3-pointer, then added two free throws with 7.4 seconds remaining.GETTING THE GOLDGreen presented Nick Young with his championship ring from last season during a ceremony before the game, but the celebration lasted longer than expected and the Warriors were issued a warning for delay of game before tip-off.“The last two years, we’ve had five or six of those celebrations and it usually spills over,” Curry said. “I wish (the referee) would have just gave it to Nick Young because he was taking his sweet time, as he should have.” Philippine Arena Interchange inaugurated Panelo: Duterte ‘angry’ with SEA Games hosting hassles MOST READ Draymond Green understands Kerr’s reasoning, but thinks the two-time defending NBA champs will be just fine once the playoffs begin.Stephen Curry scored 40 points to move into third place on Golden State’s career list, and the Warriors won despite Golden State’s 13 turnovers and getting outrebounded 12-4 by the Cavs on the offensive end.FEATURED STORIESSPORTSPrivate companies step in to help SEA Games hostingSPORTSPalace wants Cayetano’s PHISGOC Foundation probed over corruption chargesSPORTSSingapore latest to raise issue on SEA Games food, logistics“It’s just a focus thing,” Green said of the Warriors’ inconsistencies. “When you’re playing against teams that don’t quite match up talent-wise and are not really playing for anything, it’s hard to keep that focus. It hasn’t bothered me one bit because we’ve locked in at stretches and we’ve had that focus for stretches, and that’s important.”The game had a lot less hype than previous seasons when the Warriors and Cavaliers squared off in four straight NBA Finals. While Golden State is headed back to the postseason for a possible third consecutive championship, Cleveland is limping to the finish with hopes of getting the No. 1 overall pick in the draft. Lakers surprise playoff-bound Clippers DA eyes importing ‘galunggong’ anew Don’t miss out on the latest news and information. SEA Games hosting troubles anger Duterte Hontiveros presses for security audit of national power grid