Weak Grain Markets Continue; will this week's USDA Report Change the trend? Update on Neutral Nick!

The weakness in our grains has continued the past couple of days despite the fact that most are looking for Thursday's USDA S & D report to be on the friendly side.

With these fast moving markets and the fact that I have been at some marketing meetings the past couple of days we find that our marketing character Neutral Nick is out of whack on his position.  So he was forced to get back in line towards his goal of staying short delta bushels equal to 100,000 or so for each corn, soybeans, and winter wheat.

The amount of moves he was forced to do has started to become over excessive; but his projected bottom line has stayed good and after today's adjustments still looks good if not great.

Here are his trades for the day to try and square him back up.

As you can see he had some serious adjusting to do; as he had to add positions that equaled to about 240,000 short on corn, 215,000 on soybeans, and 55,000 on wheat; in other words instead of him being short 300,000 before these moves he was long a little over 200,000 bushels or about 1/2 million bushels off of his goal.

This next slide is what lets him have a little breather; even though he made a major mistake and followed up too late on his position he still has a chance to add some major dough to his bottom line.  If we can somehow stay near unchanged until June he has a chance to add $3,000,000 or about $10.00 a bushel on his 300,000 bushels.  Not bad; realistic?  I guess I am not the judge of that.

The one thing that does standout on the above chart is the fact that it is leaning a little to the wrong side; he needs to find a way to stay profitable even on a huge break and right now he could lose $$ if we where to break super hard; so he will watch and adjust.

This last slide is the one that is real concerning as it shows how his delta will move as the markets move; simply put it is too much; so he needs to find a way to adjust or slow the gamma down.

If he doesn't change the above chart Nick's stress level will simply get higher; perhaps in the end it is good??? But it looks scary to me.