Crowley: Protect those prices

November 23, 2017

 

WATSEKA – What happens if there is a war somewhere in the world or if the Dow comes down from all-time highs and hurts the economy?

 

These are questions many producers are asking and Merrill Crowley from Crowley Commodities in Watseka says protection is needed.

 

“You might want protection on your prices because while these are terrible prices, I would hate to see anybody be forced to sell at lower levels than this,” Crowley told The Central Illinois Farm Network this week.

 

With the current prices, many are looking to generate money while continuing to participate in a rally. The most common thing Crowley is hearing deals with selling and using storage to buy calls.

 

“Selling and re-owning or buying a put gives you a price floor. Basis contracts don’t give you a price floor.”

 

This is a slow time of year with Thanksgiving weekend upon us and December options expiring Friday. A close over $3.60 for March corn and over $10.15 for January soybeans would convince Crowley that we have reached a bottom in the market.

 

“The corn feel turns bullish between the last part of November and the first half of December,” Crowley said.

 

According to Crowley, both the corn and soybean cycle lows are due in January and the USDA’s final update on production is expected on January 12. That is the same day the quarterly stocks information will be released, which tends to set direction for the market in the month following.

 

Corn was basically mixed to end the short week Wednesday, wheat was down slightly and soybeans managed to close higher due to more concerns over dryness in Argentina. There will be a shortened trading session Friday for the day after Thanksgiving.

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