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Can the bulls lead the charge post-Inauguration Day?Can the bulls lead the charge post-Inauguration Day?

Ag Marketing IQ: Exercise your options. Watch Brazil, Argentina and managed money while using puts and calls to find a port in this storm of volatility.

Jason Meyer, Hedging strategist

January 24, 2025

4 Min Read
U.S. flag and market chart on LED screen.
Getty Images/jxfzsy

To date, January has been fantastic for the bulls.

USDA gave the bulls some much-needed ammunition to drive the market higher in the face of uncertainty in the agricultural world. President Trump is now in office, and the last time he held the position, his trade wars and tariffs negatively impacted agriculture.

As this second term starts, Trump is seeking a vision on trade but is not likely to impose tariffs right away. He is also evaluating trade relationships with China, Canada, and Mexico. The question lingering on producers’ minds is: “Now what?”

Politics aside, what factors could impact the marketplace going forward?

South American weather

With strong demand and smaller ending stocks in the United States, South American weather is increasingly important as any production issues could positively impact prices as world stocks shrink.

According to the National Oceanic and Atmospheric Administration, La Nina became official in December 2024. La Nina causes excessive rains in certain areas of South America while causing drought in others. Signs of La Nina are present.

  • Central areas of Brazil, which are on the cusp of harvest, are excessively wet.

  • Southern Brazil is dry.

  • Argentina is in drought across the country, particularly in the southern regions.

Related:Will Brazil get its corn planted?

So far, private estimates have not significantly adjusted the Brazilian crop. But yield estimates are beginning to trend lower in Argentina.

Managed money goes long

Managed money has been on an impressive buying spree lately. According to the latest CFTC data released on Jan. 17, Managed money in the Futures Only category held a 292,163 long position in corn. This compares with the record short position of -356,415 contracts seen last July. In a little over six months, Managed money changed their position by 648,578 contracts—over 3.2 billion bushels of corn.

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The latest report also shows a buying spree in soybeans, with managed money reported to be long 58,327 contracts compared to the record short of -183,145 last summer. This equates to a net position change of 241,472 contracts or 1.2 billion bushels. For reference, the record long on corn was back in March 2011, when managed money held 409,444 contracts. In soybeans, the record long was 240,937 contracts in May 2012.

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Can the managed money crowd continue to aggressively buy and approach record-long positions, or has the upward momentum stalled? Without a definitive answer, what is the best way to proceed and take the emotion out of marketing decisions?

Option strategies are available

Related:There’s gold in that farmland!

Many producers sold into the rally, particularly on corn, and fear missing out if the market uptrend continues. With a long way to go until the next U.S. crop, if the market drops, consider buying calls as we enter the U.S. growing season. This strategy allows participation in a potential market rally.

Conversely, bushels remain open and carry downside risk. Look to buy puts on unsold grain bushels. Buying a put establishes a price floor while maintaining the flexibility to market at higher levels if the opportunity arises.

While it’s good to feel optimistic about the markets, conditions can change rapidly. Continue to be prudent and diligent in your marketing strategy, as volatility has been significant so far in 2025.

If you have questions about these insights or need help developing your marketing strategy, contact me directly at 314-626-4019 or reach out to the AgMarket.Net team at 844-4AG-MRKT.

The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. AgMarket.Net is the Farm Division of John Stewart and Associates (JSA) based out of St Joe, MO and all futures and options trades are cleared through RJO’Brien in Chicago IL. This material has been prepared by an agent of JSA or a third party and is, or is in the nature of, a solicitation. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading information and advice is based on information taken from 3rd party sources that are believed to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. The services provided by JSA may not be available in all jurisdictions. It is possible that the country in which you are a resident prohibits us from opening and maintaining an account for you.

Related:Raise a cheer for volatility

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About the Author

Jason Meyer

Hedging strategist, AgMarket.Net

Jason grew up on a small family farm operation in Northeast Iowa. He earned his Series 3 Brokerage license before he graduated from Northwestern College in 2001. Jason’s career in agriculture started out at the Chicago Board of Trade as a retail broker for Walsh Trading. Seeing the need to learn more about the cash side of the business, Jason spent 18 months in Bloomington, Illinois with Advance Trading to hone his skills in cash-grain trading. Jason put these skills to test as a grain originator for the Dodge City Coop for 3 years. This experience allowed him to become a grain merchandiser for Farmers Coop Elevator in Beresford, S.D.

After 5 years, an opportunity to grow as a leader presented itself when Jason became the Vice President of Grain for Western Iowa Coop in Hornick, IA (a position held until a merger with NEW Cooperative in 2015).

With a growing young family, Jason decided to stay put and began his most recent work as a grain originator/merchandiser for CVA in Hinton, Iowa. Throughout his stops in the cooperative world, Jason always maintained his Series 3 license as he saw the need to help the farmer navigate the futures and options world. When the opportunity presented itself to join a team dedicated to helping the farmer in both brokerage and consulting, Jason was excited for the chance to work in a more direct role with the producer.

Jason has resided in Sioux City since 2012 raising 3 children who are active in baseball, volleyball, dance and hockey.  Jason is currently a board member for the Regina Roth Applied Agriculture and Food Studies Program for Morningside University. He also closely works with the Iowa Corn Growers Association to help support agriculture as he is a graduate of I LEAD Class 9. In his free time, Jason enjoys watching his kids participate in sports, watching sports and documentaries, trying new foods and traveling.

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