If you are bullish and want to postpone the sale of milk, look at put options. Don’t spend an arm and a leg on them, but rather look at levels that protect a worst-case scenario price you are comfortable with. There may be much more room to the upside for milk here this year, but the key is to bring some level of certainty back home.
Corn sold off sharply yesterday after scratching out a new trading price high early. Market bulls wanted to take some money off the table ahead of today’s export sales numbers (the same report that helped stirred prices sharply higher last Friday). Soybean traders leaned on a slow South American soybean harvest over the past few days. The crop is approximately 28 percent harvested, but this is significantly behind last year’s pace when more than half of the soybeans were harvested by the end of February. Of course, they had a late planting down there so a late harvest is to be expected.
Export sales were stronger than expected for grains and soy this morning, but only marginally so. Corn and soybeans are called 2 to 4 cents higher.
3/2 Class III Futures: Volume: 589 Open Interest (OI) Change: +82 Total OI: 40,672
3/2 Class III Options: Est. Put Volume: 731 Total OI: 39,999 Est. Call Volume: 1,016 Total OI: 28,399
3/2 Spot Markets: Block Cheese $1.2000 (UP 1/2, 1 Trade); Barrel Cheese $1.9625 (UP 1, 1 Trade)
Butter $2.1150 (UP 9 1/4, 1 Trade); NFDM: A $1.8150 (DOWN 3/4, 0 Trade), X $1.8025 (UNCH, 0 Trade)
3/2 Other Dairy Futures Volume: Butter: 206 Dry Whey: 16 NFDM: 54 Class IV: 19 Cheese: 63 International SMP: 0
3/2 Individual Class III Futures Prices, Change, Volume & Open Interest
Feb 11 $17.07 DOWN 1 Vol: 0 OI Change: UP 2
Mar 11 $19.47 UP 3 Vol: 109 OI Change: UP 20
Apr 11 $18.07 DOWN 4 Vol: 160 OI Change: UP 14
May 11 $17.37 DOWN 13 Vol: 34 OI Change: UP 6
FEB-June 2011 Avg: $17.78 DOWN 0.05/cwt
July-Dec 2011 Avg: $16.85 DOWN 0.10/cwt
FEB-Dec 2011 Avg: $17.27 DOWN 0.08/cwt
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