There are major changes in 2014 tax code relating to health insurance for farmers and business owners.
Farmers and businesses with more than one employee are being told to contact their tax advisor if they provide health care reimbursement.
Minneapolis-based Larson Allen CPA Andy Biebl said provisions in the Affordable Care Act could potentially put businesses out of business if they don’t know the law.
Biebl said not complying is a death sentence for any small business.
“It’s a tax built into the Internal Revenue code, so it’s non-deductible.
If you have three workers and you’re doing the wrong type of thing, each worker on an annual basis would be a $36,500 tax at $100 per day per worker.”
Biebl said this ruling applies to all businesses, not just farmers.
Corn closed the week $.10 1/4 higher.
Last week, private exporters reported corn sales of 491,508 metric tons of corn to an unknown destinations, but also announced a cancelation of 220,000 mt of corn to China.
Weekly export sales of corn showed a total of 66.9 million bushels, the second consecutive week of strong export sales.
Total annual exports total of 1.319 billion bushels are already 91 percent of the current USDA forecast.
USDA’s export forecast of 1.450 bb looks to be raised in the future.
As expected, the January supply/demand report has marked the low for prices.
The market has found the forecasted short covering and has tried to rally.
Producers are advised to used rallies to unload stored production, unless they are willing to gamble on weather uncertainties providing a rally during the summer.
We also expected funds to buy back some short positions ahead of the planting and growing season, allowing corn to have some short-lived rallies.
They are now almost flat and will not need to cover additional short positions.
Many producers are nervous about the upcoming growing season, wanting to get some hedges in place.
Patience this year should provide selling opportunities.
Strategy and outlook: Producers are 100 percent sold of 2013/14 crop.
Producers are 10 percent sold of the 2014/15 crop. Sell 15 percent at $5.24.
Soybeans closed the week $.48 higher from last week.
Last week, private exporters announced a sale of 40,000 mt of soybean oil to an unknown destination.
Weekly export sales of soybeans showed a total of 21.2 mb.
Total export sales of 1.581 bb exceed the USDA forecast of 1.495 bb.
The USDA is assuming foreign buyers will eventually cancel U.S. purchases in favor of cheaper South American product once it becomes available.
The weekly charts show an interesting pattern developing. A triangle or wedge pattern is visible, indicating the market will eventually break out of this pattern and a large move will follow.
This chart pattern is similar to the one found on cattle charts, that led to a major bullish rally.
Producers should be prepared to act according to whichever way the market moves.
Prices closed near the resistance of $13.35 and a close above this level should be bullish.
Oil World pegged Brazil production at 89.5 million metric tons, Argentina at 54.5 mmt and world production up slightly to 287.8 mmt.
Strategy and outlook: Producers are 100 percent sold of the 2013/14 crop.
Re-own 50 percent of the 2013/14 crop with $13.50 May calls if March closes above $13.35. Producers are 10 percent sold of 2014/15 production. Sell 15 percent at $12.10.
This material has been prepared by a sales or trading employee or agent of Midwest Market Solutions and is, or is in the nature of, a solicitation. This material is not a research report prepared by Midwest Market Solution’s Research Department. 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. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Midwest Market Solutions believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such.
Brian Hoops can be reached at (605) 660-1155.
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