Cattle: Dollar: Energies:

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Alannah Day
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j 3/11/2015 CONTACTS: Chuck Shelby O: (866) 837-9027 C: (765) 426-7535 Bryan Shelby O: (866) 837-9027 Bill Gentry O: (877) 433-4348 or O: (866) 837-9027 C: (219) 863-0055 Sherman Newlin O: (866)

1 j 3/11/2015 CONTACTS: Chuck Shelby O: (866) C: (765) Bryan Shelby O: (866) Bill Gentry O: (877) or O: (866) C: (219) Sherman Newlin O: (866) C: (618) Jason Clapp O: (866) C: (815) Kelly Bilyeu Office Coordinator O: (866) Quote of the Day comes to you from Scott Shelladay of TJM Investments LLC via his Twitter account Due to recent budget cuts, the light at the end of the tunnel has been turned off. Too bad it s really starting to feel like that in some of these markets. We updated some of the fundamental sections of our grain markets following this week s WASDE report. Now all eyes will look to the acres report that we will get from the USDA on March 31 st. The CBO already revised their initial numbers for planted acres to 89.4 million acres of corn and 86 million acres of soybeans. They were also estimating 55.5 million all wheat acres and 9.25 upland cotton acres. Allendale also published some numbers from their survey and found farmers saying 88.5 million corn acres and 86.1 million soybean acres. We will be getting a bunch of survey numbers being thrown around over the next month and we will try to get them to you as they come out. As always you can scroll through the update or click the links below to skip to a specific point. Corn: Wheat: Beans: Hogs: Cattle: Dollar: Energies: This / Newsletter is aimed to improve your marketing.

2 CORN: Technicals: May corn still stuck in the recent range as we continue looking for the decision to be made. We continue to expect that whichever way the market breaks out, the subsequent move could challenge the $4.20 area on the upside for resistance or a downside move could challenge support down around $3.75. Until then, the price remains range bound. For this week our research suggests the 68% over and under for May corn is +/- 13 cents, meaning there is a 68% probability that a rally effort will stall at $3.99 or a break to $3.73 will find reasonable support. 95% probability numbers suggest $3.60 will offer reasonable support and $4.12 will offer proportional resistance. Fundamentals: We have some slight changes in the mix for corn market fundamentals from this week s WASDE report. The most interesting one in my mind is that the USDA chose to show a reduction in corn used for ethanol of 50 million bushels based on data from the new Grain Crushings and Co-Products Production report released by NASS. Their report is showing that this crop of corn is offering up a better crush efficiency for making ethanol. This change was offset by an increase feed usage and an increase in exports. At the bottom of the page we come up with and Ending Stocks number of billion bushels. The previous report was billion bushels. The CBO also revised their planted corn estimates this week to Strategies: We re inclined to continue to move cash at and above current levels assuming basis is respectable. Re-ownership with CALL options remains a consideration for those that moved cash grain aggressively. New crop continues to find value above $4 and rightfully so. Expected acreage reduction for the 2015/16 crop and a balance sheet that shows a real challenge ahead for the US to increase its expected carryout, should continue to support prices until we can count on the 2015 crop. That written, some folks may choose to buy some Call options which will facilitate making value based sales later on. Our value range at this time is above $4.25 for some sales, with more in the chute in the $4.35 to $4.50 range.

3 WHEAT: Technicals: Working on an inside week with oscillators telegraphing a buy signal in oversold conditions. By the numbers if we hold this through the end of the week, we should see a few more weeks of constructive price action. For this week our research for May wheat suggests +/- 18 cents, meaning there is a 68% probability that a rally effort will stall at $5.00 or a break to $4.65 will find reasonable support. 95% probability numbers suggest $4.47 will offer reasonable support and $5.18 will offer proportional resistance. Fundamentals: US wheat ending stocks were reduced by 1 million bushels due to an expected increase in seed usage. This goes along with some of what we ve been hearing about acres being up of wheat this year so no big surprise there. Global supplies were lowered fractionally and global wheat exports were raised 0.5 million tonnes. On a sour note global wheat consumption is seen slightly down on lower food use. The largest decreases for food are seen in Brazil, India and Syria. The last sentence in the WASDE wheat section yesterday is With world supplies falling faster than use, ending stocks are reduced fractionally. We need more of that for our own prices. The biggest hurdle right now is our currency. Want to know if we are going to do any world wheat business? All eyes on the dollar. OR can President Putin cause a little turmoil and get the market to pipe up a bit. The US state Department reported that Russian tanks and artillery have been moving across the border into Ukraine. Strategies: Crop insurance levels should be announced shortly. In the meantime on the re-ownership side, we ve bought some CALL options, mostly July for re-ownership positions in the Chicago futures market is the current guidance. Long futures positions were stopped out last week. No additional guidance for CALL position holders at this time, we d like to see what develops over the next week or two. Finally, we ve previously rolled down or liquidated most, if not all of our bought PUT hedge positions. Nothing new at this time for additional new crop sales.

4 SOYBEANS: Technicals: The Market has tried to recover some this week, but so far has not got a lot of traction. Given last week s breakdown on the chart, buying interest is likely to be hard to find, for a while anyway. For this week our research suggests the 68% over and under for May soybeans are +/- 26 cents, meaning there is a 68% probability that a rally effort will stall at $10.11 or a break to $9.59 will find reasonable support. 95% probability numbers suggest $9.33 will offer reasonable support and $10.37 will offer proportional resistance. Fundamentals: No changes were made to the soybean supply and demand tables from a domestic standpoint. Our ending stocks are still projected to come in at 385 million bushels. Global oilseed production came in at million tons and that was fractionally higher than the previous report. Brazilian soybean production came in at 94.5 million tonnes (3.47 billion bushels) and Argentine soybean production came in at 56 million tonnes (2.0 billion bushels). Even though those production numbers keep getting smaller we all need to remember that they are still be numbers. The vessel line up in places like Paranagua are starting to pick up as well. There is more talk today of another strike firing up in South America that could stymie some logistics. We prefer to think of these issues as pricing opportunities and not as major market movers. Strategies: Last week s high and low for May beans was $9.45 low and $10.38 high, November beans saw a $ low and $10.04 high. Cash sales have been generally encouraged at these and higher levels. We re looking to finish cash sales on bounces from current levels Not much to change here as hedges remain a consideration. As far as sales levels are concerned, 15% is a starting point. In house we ve thought about 100% sales, but that depends on the individual. For those that have hedges in place but are getting a little tired, look to reduce coverage or buy some CALLs to reduce upside exposure.

5 HOGS: Technicals: Last week s breakdown has yet to see any follow through this week. Given the length of this break which dates back to November, we re likely alleviating our over-sold condition with time rather than price. For this week our research suggests the 68% over and under for April hogs +/- $2.23, meaning there is a 68% probability that a rally effort will stall at $68.36 or a break to $63.89 will find reasonable support. 95% probability numbers suggest $61.66 will offer reasonable support and $70.59 will offer proportional resistance. Fundamentals: The next set of fundamental news we will get will be on Friday, March 27. That will be the Quarterly Pigs and Hogs numbers. Right now it s really the same song, second verse for the hog market as far as head counts and weights go. Let s keep our eyes on the bird flu story to see if that can drum up some short term interest in the other white meat. Strategies: Folks that bought PUTs should strongly consider rolling them down given the magnitude of the recent break. Bought PUT options in our view are the best tool for hedging, as a bounce from current levels could be much larger than traders expect. We ll continue to suggest bought PUT options to protect short to intermediate term marketing s. A bounce of five dollars or more is a growing consideration. Orders to capitalize on such an occurrence should be put in force ahead of time, as these hedging opportunities often do not last long. At the money April PUT options are a bit pricey generally coming in between $3 and $5. Placing priced orders ahead of time to buy them in the $2 to $3 area is the current consideration.

6 CATTLE: Technicals: Look a little price friendly, but the pace of the advance looks measured. If we do not advance any further this week, it ll look like we re running out of gas. Next resistance if we do advance is $158 and change. For this week our research suggests the 68% over and under for April cattle +/- $3.77 meaning there is a 68% probability that a rally effort will stall at $ or a break to $ will find reasonable support. 95% probability numbers suggest $ will offer reasonable support and $ will offer proportional resistance. Fundamentals: The cash market continues to tell the story in the cattle markets. After that about the only new fundamental aspect that we ve added to the animal markets is the stories coming from the discovery of several recent cases of the bird flu here in the US. We will get some updated fundamental numbers from the USDA on March 20 th from a Cattle On Feed report. Strategies: Nothing new here as bought PUTs remain the vehicle of choice. Give us a call if you need assistance to determine specific option strikes and values. Considering the potential increase in pork production, pork prices could drop enough to cause a shift in preference at the counter over time.

7 Dollar: Technicals: Little resistance here as we break into levels not seen in a decade. We ve been debating the relevance of a move up to the 102 to 104 area. Listening to folks at the WILL Ag meeting yesterday, talk of a dollar index value up around 109 was not uncommon. It may be possible, but right now, we d expect the air to be pretty thin up there. For this week our research suggests the 68% over and under for the June dollar index is +/ meaning there is a 68% probability that a rally effort will stall at or a break to will find reasonable support. 95% probability numbers suggest will offer reasonable support and will offer proportional resistance. Fundamentals: Strategies: No strategies at this time. Energies: Technicals: Not much new here, values remain stable and continue to try and recover. We re still inclined to think $5 to $10 dollars is the most upside price advance we would expect. Fundamentals: Ethanol production last week came in at 944,000 barrels per day vs the 931,000 on the week before. Ethanol stocks were down 1.6% to 21.2 million barrels. The EIA numbers from this afternoons showed a continued increase in commercial crude oil inventories. That s nine straight weeks higher. Gasoline and propane/propylene were also slightly lower. Total commercial petroleum inventories were 2.5 million barrels higher last week. Strategies: None

8 IMPORTANT DATES & MEETINGS If you have questions or would like us to contribute to a meeting of your, feel free to give us a call at , or Kelly, at kelly@riskcomm.biz -March 16 th Bill will be at the Farm Credit office in Mahomet, Illinois to participate on a WILLAg Panel. The meeting will start at 6:30 pm and include a presentation by John Newton, Ag Economist from the University of Illinois. The Farm Credit Office is located at 1100 Farm Credit Drive, Mahomet, IL. DISCLAIMER: RESULTS ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. BEFORE TRADING, ONE SHOULD BE FULLY AWARE THAT WITH POTENTIAL PROFITS THERE IS ALSO POTENTIAL FOR LOSSES THAT MAY BE VERY LARGE, INDEED LARGER THAN THE INITIAL INVESTMENT. YOU SHOULD READ THE RISK DISCLOSURE STATEMENT AND OPTION DISCLOSURE STATEMENT AND SHOULD UNDERSTAND THE RISKS BEFORE TRADING. COMMODITY TRADING FUTURES AND OPTIONS MAY NOT BE SUITABLE FOR EVERYONE, INCLUDING RECEIPIENTS OF THIS PUBLICATION. THOSE ACTING ON THIS INFORMATION ARE RESPONSIBLE FOR THEIR OWN ACTIONS. ALTHOUGH EVERY REASONABLE ATTEMPT HAS BEEN MADE TO ENSURE THE ACCURACY OF THE INFORMATION PROVIDED, RISK MANAGEMENT COMMODITIES, INC ASSUMES NO RESPONSIBILITY FOR ANY ERRORS OR OMISSIONS. ANY REPUBLICATION OR OTHER USE OF THIS INFORMATION AND THOUGHTS EXPRESSED HEREIN WITHOUT THE WRITTEN PERMISSION OF RISK MANAGEMENT COMMODITIES INC IS STRICTLY PROHIBITED. PRICE QUOTES OBTAINED FROM VARIOUS HISTORICAL DATA VENDORS. THE INFORMATION IS THE OPINION OF THE AUTHORS, OR OBTAINED FROM THIRD PARTY SOURCES IS BELIEVED TO BE ACCURATE, BUT CANNOT BE GUARANTEED.

Turner s Take WASDE Expectations vs. Sept WASDE report:

Turner s Take WASDE Expectations vs. Sept WASDE report: Published by: Craig Turner 11/4/2013 4:02:09 PM In this issue 1) CORN: USDA Friday exected to be bearish. Looking to short Corn ahead of WASDE 2) SOYBEANS: Short Bean Ideas with Long Call Protection 3)