Below are technical charts for corn and soybeans. Once these moving averages, oscillators and what not turn lower, it usually means that the smart money traders have lost interest and have moved on to trade other things. Now tomorrows report could change this for a short while but what usually happens is that it takes extreme weather events (as well as extremely lower prices) to attract buyers back into the market.
On the corn page there are three option strategies that I recommend. These strategies obviously show a bullish bias due to the trade estimates that have been reported.
1. Buy May $3.80 calls now to re-own bushels sold on the recent rally ahead of tomorrows report. These calls are currently trading at around $.0425 cents.
2. Buy September $4.20 calls at $.10 cents as "courage calls" to support making sales this spring or summer. These calls are currently trading at $.145 cents. It would likely require September corn to trade to $3.80 for this order to get filled.
3. Sell December $3.50 puts at $.08. Selling the bottom end of your subsidized revenue insurance protection near the average harvest price of 3 of the last 4 years to generate premium to offset the cost of your MPCI policy or options that you bought. These puts are now at $.07 cents.
1. Buy the May $10.00 put option today at $.08. These options won't expire until April 20, so they'll protect against USDA, Brazilian and political risk for about 4 more weeks.
2. Buy the November $9.80 put and sell the $10.80 call. Today, this spread would trade for a net cost of zero cents. This puts a net floor in Nov futures @ $9.80 while accepting a ceiling at $10.80.