Sep 18, 2014
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September 2013 Archive for Current Marketing Thoughts

RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

Will the government shut down??

Sep 30, 2013

 Political unknowns abound... Will Washington's disputes over the "federal budget" and "national debt" cause a shutdown? What will happen to the Farm Bill, which is already one year past due and an extension set to expire today? A government shutdown now seems more likely than it did Friday when we closed the markets. Especially after House Republicans voted late Saturday to fund the government ONLY if "Obamacare" was delayed for another year, basically upping the ante in their fiscal "showdown" with the Democrats and President Barack Obama. Remember, both the Senate and the White House have said they will NOT support any type of funding bill that cuts "Obamacare."  Without a stop gap measure or some type of compromise being passed by midnight tonight, parts of the US government will start shutting down. 

Talk is the Senate will be back in session today at around 2:00pm. It is assumed they will pass a Bill that keeps the government funded BUT does NOT suspend Obamacare in any form or fashion.  This Bill will then be sent back to the House for a vote at around 7:00pm. If the House Republicans have been bluffing, a last second compromise will be reached and "shutdown" averted. If the House stands firm and Congress fails to pass a stopgap spending bill before funding expires at midnight tonight then a government shutdown is upon us... Hanging in the balance are 800,000 federal workers who would be sent home tomorrow. This obviously has the trade nervous.  

Keep in mind even if a deal is reached it will only keep the government funded until either mid-Nov or mid-Dec at best. At that point both parties will once again have to lock horns. A bigger concern may actually be the upcoming "debt ceiling" debate. Shutting the government down for a week or two seems to be tolerable by most bulls, but the echoing sounds of a US "default" would be a much more deafening battle cry for the US stock market. 

Italy could be another major obstacle this week as Berlusconi sends the Italian government into a complete tailspin after ordering his parties ministers to step down from their current government positions. Fear is the political chaos could quickly bring on more rating agency downgrades to Italy and renewed market pressure previously associated with negative EU debt crisis headlines.

Bottom-line, political issues both here in the US and Italy may provide some fairly strong headwinds for the outside markets the next couple of weeks. The US dollar, crude oil, the US stock market and most major metals are all lower to start the week.  CLICK TO RECEIVE MY FREE REPORT

 

Don't underestimate the new players coming into the market..

Sep 27, 2013

 Corn bulls were happy to see the International Grains Council (ICG) lower its 2013/14 global corn crop estimate by 2 million metric tons on production problems in both China and the EU. The problem is Ukraine insiders are trumping the news by saying their corn exports could jump by 4 million metric tons compared to last year. It still seems that many players in the corn market have failed to recognize Ukraine's new roll in becoming a much larger global corn exporter. Think about it this way - Ukraine is now expected to export just as much corn as both Argentina and Brazil, all three now estimated to export around 18 million metric tons of corn next year. That's not a whole lot less than we exported here in the US this past year. Moral of the story, there is yet another Costco or Sam's Club opening down the street. The days where everybody that needed groceries came to our local "mom and pop" store are behind us. Global buyers now have choices, and many are starting to shop with the cheaper "low-cost providers." Currently Ukraine is about $15-$20 per ton cheeper to most of are major importers...China, Japan, South Korea and Taiwan. The higher prices we have enjoyed the past few years have definitely changed our customers buying habits. Some will argue it's just a fad, or that global buyers will eventually become frustrated with logistical constraints and untimely deliveries. Remember, that's very similar to what many folks were once saying about the "Big Box" stores.

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Basis levels across the Midwest continue to be very erratic. Some areas are reporting that new-crop basis has fallen back to levels not seen in almost 2-3 years (minus -$0.60 to minus -$0.70). Other areas, where the crops went in the ground extremely late, are reporting very strong basis levels being available for at least another two-weeks (plus +$0.60 to plus +$0.70) . Moral of the story remains the same, if there is any possible way you can deliver and take advantage of the premium it makes a lot of sense. There are all kinds of ways you can re-own on paper, limit your downside risk and continue to speculate on flat price. There is just no real convincing reason, at least in my mind, that you would want to take the risk of losing $0.50 to $1.00 in negative basis swing.

Thoughts On Mondays Upcoming USDA Report

Sep 26, 2013

Below are a few thoughts that have been circulating inside the trade.

  • Several traders, investment groups and money managers are thinking we could see a bullish wheat report, a slight bullish soybean number, and a somewhat bearish corn number.
    • Corn - Ending Stocks could push higher than the most recent USDA estimate of 661 million bushels. Lots of talk about the stocks number moving above 700 million bushels on less than expected exports, ethanol usage and feed demand. Slice it and dice anyway you like, many traders simply believe the USDA will end up pulling forward some of the early harvested corn from down south and demand simply isn't adding up. The hated term "commingling" cant be ignored!
    • Soybeans - This is really a mixed bag of nuts. The bulls are arguing that export demand was higher than the USDA had forecast and hence the stock number is moving lower. Some bulls will even go as far as to say a sub-100 million bushel number would not surprise them. The other side argues the USDA could surprise us all by magically finding more bushels, in essence telling us they underestimated last years crop. There is really not much debate about US "crush" as most view it close to the USDA estimate. Feed & Residual for soy could be slightly lowered. I guess I will lean to the bullish side, but would not be surprised at all to see the USDA pull another rabbit out of their hat. Be careful with this one. Watching from the sideline will be the ONLY safe bet.
    • Wheat - Possibly the biggest bullish sleeper on the board. As I explained in the dedicated wheat paragraph above, wheat feeding could be much larger than the market has been estimating. Remember back in Jun/Jul/Aug wheat was trading cheaper than cash corn and soymeal prices were going thru the roof. Hence wheat feeding could have been much larger than anticipated. The problem is we have been banging this drum for a long time now and nothing has come from it, maybe this is our time. Hopefully with US exports being extremely strong the past few months we can catch a bullish tailwind. Ultimately giving us the ability to break free from bearish chains of wheat. Those producers who still need to sell more bushels should keep their fingers crossed, if the numbers come out as some bulls suspect, we could see our lowest stock levels in several years.

 

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Will the soybean market continue it's mysterious mannerisms?

Sep 24, 2013

There is talk the USDA could actually "raise" the old-crop ending stocks number next Monday, finding an extra 20-25 million bushels would not be out of the realm of reality. Questions also continue to be raised about the USDA's "demand" estimate, which could easily be 20-30 million bushels overly optimistic. Lets also take into account the clear unknown in regards to yield. If the yield, for some crazy reason, were to jump higher by just 1-bushel per acre, we could go from a very tight ending stock situation to much more palatable number, all in the blink of an eye. I am guaranteeing this will be the case, but I do want producers to understand $13 beans directly out of the field make for very nice profits, especially considering how quickly it could all disappear. With many producers focused on harvesting corn right now, in order to secure any "premiums" that are still being offered, the bean harvest might be a little slower than most are anticipating. Keep in mind with many of the beans still having green leaves and green stems, rather than being able to run the combines at 4.0-to-4.5 mph pace, producers are having to slow things down dramatically, closer to a 2.0-to-2.5 mph pace. Meaning the harvest pace might be a lot less brisk as we have seen the past few years.

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What we are watching today!

Sep 24, 2013

Technical traders continue to keep an eye on the DEC13 corn contract lows at $4.45^6. I personally believe producers who can still capture big basis premiums for delivering corn this week, should take full-advatage! Thoughts are you limit your downside risk by selling the cash and look to re-own on paper once you believe the harvest lows are in place. Soybean producers should continue to keep hedges or floors in place as well, with an objective of pricing as many $13.00 plus beans as you can directly out of the field. Essentially only keeping back the number of beans you are comfortable gambling with. With the Iowa crop now showing improvements in both corn and soybean conditions it seems hard to imagine a major reduction in US yields. Without any major weather concerns on the horizon, I continue to believe in "selling the rallies." With DEC13 wheat once again trading at a $2.00 plus premium to DEC13 corn, we may start to see more longer-term fund interest being "long corn vs. short wheat." Spec's may want to put this on their radar screen, as a move to the $2.30-$2.50 range may warrant serious consideration.

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Outside Markets Take Center Stage?

Sep 23, 2013

Political gridlock here in the US may soon threaten both the economy and the markets. Macro traders are asking, Can the government avoid a shutdown? and will there be a "default" of some type if the debt ceiling isn't raised? 

Keep in mind Congress hasn't passed a budget in the past 4-years. We are simply running on what they like to call "continuing resolutions," which simply extend their authority to do whatever. So we are not looking for a so called "balanced budget" but rather another "continuing resolution" to avoid a shutdown by Oct. 1st (next week).  If you remember, the Clinton/Gingrich era had a similar type "shutdown." It's certainly not the end of the world, like many talking heads are playing it up for the ratings, but it could cause some nearby nervousness. In fact some very smart think-tank types are now predict a one-wek US government shutdown. The Republicans (primarily Tea Party wing) seem content on NOT giving Obama and crew a higher credit-limit without some concessions or reduction of funding for ObamaCare.    

 

Economic data scheduled to be released this week will be heavy. Last week the trade was excited by three main events: The announcement  that Larry Summers had pulled his name from the hat of Fed Chair hopefuls; The announcement by the US Fed that they were leaving monetary policy "unchanged," viewed by many to be increasingly more dovish; Existing Home Sales were once again well above analyst expectations, showing continuing strength in the US housing market. This week might not be as rosy however with Consumer Confidence, Personal Income & Spending, Inflationary data and more US Housing numbers on top of a potential government shutdown.  I suspect "IF" an announcement is made that Janet Yellen has been appointed the next Fed Chair and the powers that be in Washington can somehow avoid another near-miss, then we have a chance to see NEW all-time highs in the US stock market. If neither of those two events come to fruition, we will continue to give up ground on more uncertainty. Find out how it will effect the grain markets in my daily newswire, CLICK HERE, for the Van Trump report. 

As for today...

Sep 20, 2013

China remains on holiday so there is very little news on that front. Traders here at home will be waiting to see the latest Informa numbers, expected to be released this morning at around 10:30am CST. I am hearing we will see their final wheat production numbers for 2013, and may also see their updated corn and soy acreage estimates. Keep in mind "acreage" has been very heavily debated as of late so this could be very influential data.  My gut says as long we keep trading US "production," and some of the yield reports continue to show surprises to the upside, we need to keep our hedges in place in expectation of additional downhill pressure. Lets also not forget, after the close, the USDA will release its Sept "Cattle-on-Feed" report. Most seem to be expecting an "On Feed" number between 93-96% of a year earlier. Aug "placements" and "marketings" could be a real wild-card.  

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Something to consider..

Sep 19, 2013

Not only have I recommended taking a closer look at your 2014 fertilizer costs, and the fact you should start locking in prices if you are seeing substantial savings.  But I also want you to look at 2014 seed prices.  From what I am hearing Monsanto  has raised prices on its price cards by around 5-10%. Pioneer and some of the others seem to have kept price increases from 0-5% for next year. Bottom-line seed prices aren't getting any cheaper. I guess if the seed companies can continue increasing yields via improved "technology," then they can justify raising price. What we need to consider is if corn prices continue falling, making profitability less and less attractive, there might be fewer acres planted in South America, hence making (top tier) seed supplies in 2014 a little tighter than normal here in the the US. Point being, despite an increase in price, we might be better off to bite the bullet early and get our seed secured rather than waiting for some-type of fire sale that may never occur.  

As reported last week, I believe we are finally entering that 30-45 day fertilizer "buying window" that we have been patiently waiting for. I am by no means guaranteeing a bottom has been put in place, but it is certainly starting to feel like the risk is to the upside, not the down. With some prices falling back to levels not seen since 2009, I believe locking in some of the risk is a smart play. I have encouraged ALL of our readers to start calling around and checking with their suppliers in order to compare prices to previous years. If the savings have reached your particular area, be smart and start taking advantage.  

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Are more corn cuts to come?

Sep 18, 2013

Corn bulls are excited to see the FSA make further downward adjustment to their planted acreage totals. I said it yesterday and I will say it again today, "be careful reading too much into this data." If you recall, FSA data released last fall ended up being about 3.5 million acres below the USDA's final acreage estimate. Also keep in mind, even if "harvested acres" are reduced by 2.1 million. This still gives us 87 million (which seems a little low considering we harvested 87.4 million acres of corn last year). With yields working their way higher, a 158 type number can't be ruled out of the equation, especially if they cut acres. If this ends up being the case "total US corn production" would still end up being around 13.746 billion bushels. Meaning ending stocks would still be north of 1.8 billion bushels and our stocks/use ratio still well above 15%. Much higher than last year 6.5%. Below are a few scenarios to play around with. Keep in mind the USDA currently has harvested acres estimated at 89.1 million and yield estimated at 155.3 bpa. For those who still remain wildly bullish, just keep in mind it will be really tough for the USDA to aggressively cut both "harvested acres" and "yield." In fact my hunch is the USDA works yields slightly higher through the Jan report. I wouldn't have said this prior to the release of the Sept. data, but seeing how they raised yields out of the blue, and many of the producers I speak with are harvesting yields 10-15 bushels better than they thought two-weeks ago, I see no compelling reason to believe the yield number wont be pushed higher once again.

  • 88M Harvested @ 160 yield = 14.080 billion bushels = 2.1 billion plus carry
  • 88M Harvested @ 155 yield = 13.640 billion bushels = 1.7 billion carry
  • 87M Harvested @ 160 yield = 13.920 billion bushels = 2 billion carry
  • 87M Harvested @ 155 yield = 13.485 billion bushels = 1.5 billion carry
  • 86M Harvested @ 160 yield = 13.760 billion bushels = 1.8 billion plus carry
  • 86M Harvested @ 155 yield = 13.330 billion bushels = 1.4 billion carry

From my perspective, as long as we are trading "production," bullish players will need to see a 3-million plus reduction in "harvested acres" and the national "yield" fall to sub-155 levels before we start getting the funds to bite. As I always advise, know what your betting on and the time-frame you need it to happen. In my opinion betting on a bullish move near-term might be a real long-shot. Bulls will need help from South American weather headlines or a possible hidden Chinese demand story. 

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FSA numbers spark a turn around Tuesday type action..

Sep 17, 2013

As the latest FSA data shows close to 1.687 million acres of soy and about 3.572 million acres of corn were unable to get in the ground because of the unusually wet spring. Be careful with these numbers as they are very controversial. Yes, they will change again, and who knows how NASS will interpret the data this year. Traditionally, the 5-year average ratio of FSA acres to NASS ends up being just below 97%. Meaning if you use the 91.428 million corn acre number reported this morning by the FSA you could conclude a final NASS number just above 94.25 million. 5-year average in soy is a little higher at about 98.5%. Meaning if you use this mornings FSA data of 74.659 million soy acres  you could conclude NASS will estimate the acreage at around 75.75 million acres compared to their current 77.2 million estimate. Keep in mind these are just W.A.G. numbers...or in other words "wild ass guesses." Thoughts are I could see the USDA cutting "planted acres" in the upcoming Oct report by 2-3 million in corn and by 750,000 to 1.5 million in soybeans, wheat acres could be cut by close to 2 million.

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Funds back to Commodities: 3 Main Forces

Sep 12, 2013

Money-flow both in and out of commodities continues to be highly monitored. An interesting thought starting to circulate inside the trade is the fact we may be setting ourselves up for a NEW wave of money coming back into the commodity sector. Especially if traders get temporarily spooked out of equities. Below are three major forces that, if the winds blow in the right direction, could once again fuel the commodity fire:

  • China - Most all economic numbers and data are pointing to a much softer landing than most anticipated. In fact China looks poised to start growing once again. The question is, as they shift to more "consumer based spending" will they be able to push demand as hard as they once did? If they can get over the hump, China could once again be a major force. In fact, one of todays Bloomberg headlines read "Goldman Sees China’s Commodity Demand Rebounding to December." 
  • Japan - Abeonomics is in full-swing. Japan has very few options but to let their currency drift lower and lower in an effort to create inflation and spending. Keep in mind, for the past 20 years "deflation" has had a stranglehold on Japan. In an effort to change this it could spark a much greater demand for commodities.
  • Lame Duck President - As you can see, he is waiting on the rest of Washington to make the decision on Syria. Most political insiders believe we will see less and less decision making as his 8-year term pushes into its final leg. Often times this lack of global US leadership is characterized by a stagnate or disappointing US stock performance, improved growth in other parts of the world, and money flowing into commodities.   CLICK HERE to get all my insights on in my daily wire, the Van Trump report. 

Soybeans remain the mystery moving forward!!

Sep 11, 2013

Will the US yield fall to sub-40 bushel levels? How will the USDA use avg. pod weights? Will the Chinese keep their current importing pace? Will harvested acres eventually be cut by another 500,000 plus? Will South American weather cooperate and allow yet another record number of soybean acres to go in the ground? Will the gap at $13.31^4 on the NOV13 bean charts eventually be filled?  These are all good questions. Many bears are complaining that the trade is simply too focused on the production problems in Iowa. Sighting that areas in the Delta and Ohio River Valley are seeing extremely good yields and could help offset the losses. Before basing your decisions on the good yields in the fringe states make sure you know and understand the numbers:

  • Iowa is expected to harvest 9,430,000 acres of soybeans. Keep in mind their crop conditions have fallen from 58% of the crop being rated as GD/EX on July 15th to now just 33% rated GD/EX this past Monday.  Down -25%
  • Illinois is expected to harvest 9,350,000 acresTheir crop conditions have fallen from 74% of the crop being rated GD/EX on Aug 5th to now just 49% reported GD/EX this past Monday. Down -25%
  • Minnesotta is expected to harvest 6,630,000 acres. Their crop conditions have fallen from 65% of the crop being rated GD/EX on July 22nd to now just 51% reported GD/EX this past Monday. Down -14%
  • Missouri is expected to harvest 5,640,000 acres. Their crop conditions have fallen from 59% of the crop being rated GD/EX on July 1st to now just 36% reported GD/EX this past Monday. down -23%
  • Indiana is expected to harvest 5,230,000 acres. Their crop conditions have fallen from 76% of the crop being rated GD/EX on Aug 12th to now just 55% reported GD/EX this past Monday. Down -21% 
  • Top 5 States in terms of planted acres for soybeans all listed above.These five states equal close to 50% of our entire US soybean acreage.

 

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10 reasons corn could move higher!!

Sep 09, 2013

 Corn trade continues to digest NEW record yields being harvested by many producers in the Delta and Ohio River Valley area (specifically southern IL, IN and northern KY). This talk is obviously keeping many of the larger traders leaning over the short-side of the boat. Their contention is, even though current supplies are extremely tight, a 13.8 to 14.1 billion bushel crop is just around the corner. Lets also keep in mind many of the larger money-magers believe current USDA demand numbers are over-stated as well, especially exports. Most well versed S&D experts will tell you, since global inventories have grown, and most of the foreign exporters have limited storage space, they will be much quicker than US suppliers (with ample storage) to lower prices in an attempt to move supply.  Meaning once again, our inability to be the worlds "low cost" provider will ultimately weigh on demand. This logic is hard to argue and has the bears thinking exports are still overstated by some 200-300 million bushels.  Personally I am NOT as pessimistic or as bearish as most... I am not saying I have become bullish, I just think additional downside pressure may be short lived. Below are my Top-10 reasons:

 

  1. Record yield headlines might not last: I am not as sold as I once was on the fact the US corn crop is going to be 14 billion bushels. Yes the irrigated yields down south are massive. But I am thinking as the harvest starts to move north the "record yield" story is going to be a thing of the past. Keep in mind...Click to read more. 
  2. Fewer Harvested acres: I believe "harvested acres" are still overstated, best guess maybe by 1-2 million. My concern is also that a large portion of the "preventive plant" acres were in quality corn producing country. Meaning it could influence total production more than in any of the past several years.  
  3. Contrarian Theory: Making money following the herd rarely proves to be a  prosperous venture. Getting in front of the herd, yes, but following...No! From my perspective everybody and their brother has jumped on the "bearish corn bandwagon" the past few months. 
  4. Pulled higher by soybeans: There is a possibility that we haven't read the final chapter in the 2013 soybean thriller.  Yield estimates for soybeans are all over the map, currently ranging from 37-43 bushels per acre. No one seems to have a good grip as of yet on total production. My guess is a final yield of....Click to read more.
  5. Chinese Demand: China's demand for soybeans has been stronger than anticipated. Some now thinking their current demand could exceed the USDA 's estimate of 59 million metric tons, and is starting to make the USDA's projection of 69 million metric tons next year more believable.  Lets also keep in mind their wheat demand was greatly underestimated (due to domestic production losses) and talk is now circulating that their corn demand could be grossly understated as well. Remember...Click to read more.
  6. La Nina in full-force: With South America's planting and growing season right around the next corner (actually starting in some areas), I have to suspect weather headlines from South America will soon start to influence the trade in some capacity. If things start to turn more dry we could quickly see production estimates for South America start to ease. Keep in mind parts of Argentina are already well behind their traditional pace for moisture, so are parts of Brazil. 
  7. Increasing ethanol demand: With ethanol margins extremely strong and threat of war in the middle-east keeping crude oil prices elevated, I am starting to think corn used to produce ethanol could be understated. Some in the industry believe if crude stays at these levels we could add 300-400 million bushels to corn demand. If nothing else certainly enough to offset what many believe are inflated export numbers. 
  8. Shorter time cycles: As I have mentioned time and time again, traditional fundamentalist are finding it more and more difficult to time the markets. High frequency trading and shorter cycles are making longer-term perspectives tougher to manage. Ultimately the fundamentals of "supply and demand" float to the top, but drowning in the wakes has become a real concern.  My hunch is until the headline waters become more calm or smooth I am afraid the fundamentalist will continue to gasp for air. Keep in mind we are clearly in a "transitionary" phase. The words "transitionary phase" do NOT go hand-in-hand with the words "calm" or "smooth," an environment the fundamentalist thrive tend to thrive in. 
  9. Weather Extremes: As I mentioned above, "fundamentalist" thrive on predictability. Meaning everything looks good on paper...until it doesn't! From my perspective the "weather" is clearly in a cycle of UNPREDICTABILITY, which makes many "supply and demand" assumptions worth only the paper they are written on. 
  10. The Risk-to-Reward: As corn prices drift lower and lower, perhaps to sub-$4 levels the burden of risk shifts clearly to the upside. Meaning $4.00 corn could have another $1.00 of downside risk, but some $4.00 or more of upside potential. Money-managers love limited risk to high reward scenarios. My thinking is....Click to read more.

Should you be protecting your upside in soybeans??

Sep 06, 2013

Weather & Soy yields here in the US remains the big question. Not so much rainfall totals moving forward (because I think its too late), but rather what type of damage has already been done??? We continue to get report after report in the office from producers who are having a tough time with beans. Some areas have definitely seen some slight improvements the past few days, but the situation and potential lack of yield certainly has my attention. In fact buying cheap out-of-the-money calls might be a smart play for those who are worried about their production or the fact they could be "oversold." Talk to your individual advisor about specifics. I have just learned through the years at some point, despite what the numbers are telling us on paper, we have to stop and listen to what the market is trying to tell us. The past couple of weeks this soybean market has been jumping up and down screaming that there's potentially a big problem brewing. I certainly can't guarantee a low yield number will be reported by the USDA, in fact they may move the goal post for all I know. But I can tell you, from what I am seeing and hearing out in the field, we could end up having a hard time exceed last years yield of 39.6 bushels per acre. I know that may sound extreme to some, especially considering how bearish I was just a couple of months back. The lack of rain in August is no longer a "what if"...it's in the history books and it isn't pretty. I heard yesterday that IA, IL, IN, and IA received 1.72", 1.38", and 2.49" of rain since August 1, compared to 3.19", 6.19", and 5.73" over the same period last year. In fact Chicago's 4.05" since Jul 1st is the driest in some 37 years! Keep in mind there is very little rain in the forecast through the weekend either. Bottom-line, despite the S&D's its tough to be overly bearish this market when we know how important the Aug. rains are to the US bean crop. 

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Is the early freeze still looming?

Sep 05, 2013

Weather remains the major "wild-card" still in the grain and soy markets. Even though there is very little in the forecast pointing to an "early-freeze" I suspect the market will soon start to focus its attention in that direction. The fear is, even with most of the Iowa corn crop close to "dent" it will still need 4-6 weeks to mature, especially those fields that are still in the "dough" or "milk" stage. Fast forward 4-6 weeks and you start to approach mid-October. Below is some interesting freeze data I had the guys in the office gather. As you can see from the data we are quickly approaching the possibilities of a freeze event. Understand what I am saying here. The market, especially the soy market, has been trading "weather hype" for the past three weeks. During this time period we have added $2.00 plus to the price of soybeans. The markets (especially the funds) tend to be creatures of habit, therefore my hunch is the trade will continue to look for "hype" until ALL possible options are exhausted. With that being said, you have to believe "freezing" temps will become the next logical "patsy."  Whats crazy is I can't remember a single time a "freeze" headline has lived up to its "hype" or produced the damage it had originally touted.  Remember though, this market is NOT trading the facts, its trading the "hype," and until that scenario changes I am going to respect the upside potential and look for the next bull story to be a chilly one.         

IOWA

  • Burlington, IA - Avg. Freeze Date Oct 18th - Earliest Freeze ever Sept 26th 1984
  • Cedar Rapids, IA - Avg. Freeze Date Oct 8th - Earliest Sept 15th 2007
  • Carroll, IA - Avg. Freeze Date Sept. 29th - Earliest Sept 3rd 1974
  • Davenport, IA - Avg. Freeze Date Oct 6th - Earliest Sept 23rd 2012
  • Des Moines, IA - Avg. Freeze Date Oct 12th - Earliest Sept 22nd 1995
  • Iowa City, IA - Avg. Freeze Date Oct 10th - Earliest Sept 14th 1923
  • Mason City, IA - Avg. Freeze Date Oct 1st - Earliest Aug 30th 1915
  • Red Oak, IA - Avg. Freeze Date Oct 5th - Earliest Sept 15th 1993

ILLINOIS

  • Bloomington, IL - Avg. Freeze Date Oct 13th - Earliest Sept 11th 1917
  • Carbondale, IL - Avg. Freeze Date Oct 14th - Earliest Oct 2nd 2003
  • Champaign, IL - Avg. Freeze Date Oct 5th - Earliest Sept 15th 2007
  • Chicago, IL - Avg. Freeze Date Oct 13th - Earliest Sept 22nd 1995
  • Decatur, IL - Avg. Freeze Date Oct 16th - Earliest Oct 2nd 2003
  • Peoria, IL - Avg. Freeze Date Oct 17th - Earliest Sept 20th 1991
  • Quincy, IL - Avg. Freeze Date Oct 21st - Earliest Sept 26th 1928

MINNESOTA

  • Duluth, MN - Avg. Freeze Date Aug 29th - Earliest Aug 2nd 1918
  • Owatonna, MN - Avg. Freeze Date Sept 30th - Earliest Sept 3rd 1974
  • Rochester, MN - Avg. Freeze Date Sept 29th - Earliest Aug 30th 1915
  • St. Paul, MN - Avg. Freeze Date Oct 10th - Earliest Seot 24th 2000

NORTH DAKOTA

  • Arbilla, ND - Avg. Freeze Date Sept 12th - Earliest Aug 28th 1965
  • Bismarck, ND - Avg. Freeze Date Sept 21st - Earliest Sept 1st 1974
  • Fargo, ND - Avg. Freeze Date Sept 26th - Earliest Aug 23rd 1891
  • Minot, ND - Avg. Freeze Date Sept 25th - Earliest Aug 20th 2004

WISCONSIN

  • Hayward, WI - Avg. Freeze Date Sept 15th - Earliest Aug 21st 2004
  • Madison, WI - Avg. Freeze Date Sept 30th - Earliest Sept 12th 1955
  •  

  • Wausau, WI - Avg. Freeze Date Sept 29th - Earliest Sept 11th 1943

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Where there is "smoke" there is often "fire"

Sep 04, 2013

 Remember the best traders are constantly trying to skate to where the "puck" is going to be...not to where the puck is currently located. The question is will the rains in the forecast for later this week be enough to stop the yields from tumbling further?  Will the temps heat back up enough to do more damage? Have we heard or seen the last of the weather headlines? What are the odds of an early freeze? The point I am trying to make is that the trade has been skating hard trying to get the right angle in order to stay ahead of the "puck." If it starts to look as if it may slow down or perhaps even change direction we may end up having a pileup at center ice, something all traders are desperately trying to avoid. With the I-States reporting record low rainfall amounts for the month of August I suspect soybeans will remain in the "hot-seat" for at least a couple of more weeks. As producers, (especially those over 50% sold) I continue to believe a "wait and see" approach is our best strategy.  If we can catch another leg higher on US production and weather fears I will entertain reducing a little more risk. Otherwise I want to wait and see how "demand" plays out. I have a strange feeling China is going to be a bigger buyer than they are leading on.  

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The verdict is still out on soybeans!

Sep 03, 2013

 Soybeans remain the hot market, with everyone in the trade waiting to see if we can take out the $14.09^6 high.  Bulls continue to fear poor soil moisture levels and lack of rainfall in August and into September could ultimately devastate production in parts of IA, IL, MN, ND, WI, and MO. Their belief is the cooler than normal temps early on helped mask the dry conditions that were taking hold. Now all of a sudden we have the driest July and August on record for some areas and the trade somewhat surprised by the reports of short plants, limited pods, plants already turning yellow, and major dead spots out in the fields. While there is starting to be talk of the US corn yield falling to sub-150 levels, there is more talk that the soybean yield could ultimately be sub-40 bushels per acre, a number that simply will NOT pencil! This is obviously giving the soybean market stronger rally legs than corn which will enjoy substantial gains in yield when compared to last year.  For those producers who are waiting on prices like last year, just remember, the trade was talking about a 32 to 33 bushel yield for the US crop during the height of the run up to $17.94^6...that's not anywhere near the case this year.  Moral of the story, don't be afraid to book profits and reduce risk with prices above $14.00 a bushel. Also keep your eye on the 2014 prices, a move back above $12.50 will once again insure profitable farming.

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