Sep 19, 2014
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March 2014 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.

Corn News and Questions Before the USDA Report.....

Mar 28, 2014

Corn demand here in the US remains extremely strong.  Export commitments are now some 165% higher than last year at this time.  Most sources thinking we need to sell fewer than 1 million tons within the next 5 months to reach the current USDA export estimate.  Moral of the story, despite Chinese cancelations the USDA will still need to raise there total export estimate.  I am still sticking to my guns at 1.8 billion bushels.  A number I threw out over three months ago and everyone said I was nuts...Maybe???  Remember, in Argentina (the worlds #2 corn exporter) farmers seem more interested in harvesting soybeans right now rather than corn. The world's #3 exporter, Ukraine, is still a bit of a concern for some global importers.  In other words I am thinking US corn exports could remain strong for a bit longer.  The flip side to this bullish part of the equation is that the International Grains Council is estimating total global corn production at 961 million tons, basically 7 million metric tons higher than their previous estimate and 2 million metric tons higher than last year, putting world stocks at near 15-year highs. Or in other words about a 35% jump in stock in just two years time.       CLICK HERE for my daily report....

March Stocks - As I mentioned above, this number is always extremely volatile and heavily debated.  I suspect nothing less on  Monday.  Keep in mind theDEC13 quarterly stocks came in lower than the trade was anticipating due to the large feed number.  Thoughts are the MAR14 quarterly stocks number makes a lower adjustment to feedings. But who knows, CLICK HERE for my daily report....

 

Planted Acreage The USDA Ag Outlook has the 2014 new-crop corn acres estimated at 92.0 million.  The trade is thinking that number could be closer to 93 million  Last year we planted 95.365 million acres. Just keep in mind we had a very large number of "preventive plant" acres.   After the release of the acreage number on Monday, I expect the bears will be quick to point out that the "planted acreage" number generally tends to CLICK HERE for my daily report.... 

Corn Bulls Eye Exports, Weather and Geopolitical News....

Mar 27, 2014

Corn Summary: As you can see from above, the "Bulls" are disregarding most of the traditional "Supply & Demand" rules and right now prefer to place their bets on the long side of corn as a geopolitical hedge and or a weather type play.  The "Bears" are arguing enough is enough and that the Bulls have clearly added the risk premium needed to cover both the current weather conditions and the long-term risk associated with Russia/Ukraine.  Keep in mind, both are very valid arguments and are waged by extremely smart traders.  This simply confirms my reasoning for being 50% sold/hedge in new-crop and 100% SOLD OUT in old-crop.  From a more traditional "Supply & Demand" perspective, moving higher simply makes no sense to me, but when you start to throw in all the other moving parts and strange dynamics that have occurred the past few weeks, traditional analysis is out the window...at least temporarily. Make sure you understand this battle could clearly go either direction right now, be smart and reduce some of your risk!       CLICK HEREfor my daily report....

 

Below are a couple of additional thoughts regarding corn....

 

Ethanol production has ticked back a touch as of late as several plants continue to run into logistical headwinds caused by lack of available transportation. The margins have been terrific, but as I have identified on several occasions, getting rail to and from destinations is another story. I am even hearing that we will once again start seeing "imports" of ethanol hit the US shores.  CLICK HERE for my daily report.....

Early Planting Takes Center Stage....

Mar 26, 2014

Corn traders are anxiously awaiting Monday's bevy of USDA data scheduled to be released at 11:00am CST. I will supply detailed thoughts and trade estimates in regard to this data in Thursday and Friday's report.  Outside of the USDA numbers the trade continues to monitor US export strength and the fact Argentine corn has quickly started to become more competitive (now thought to be at a $15-$20 per ton discount to US corn) and more readily available as their harvest starts to really gain momentum.  The trade continues to keep an eye on China as the bulls are concerned about the fact Chinese importers continue to reject MIR162 US corn varieties. Keep in mind, most in the trade now believe the Chinese have rejected over 900,000 metric tons of US corn.  The trade is also aggresively debating how the planting pace will progress this spring here in the US. Yesterday we digested reports that the Texas corn planting was just 20% complete vs. 47% last year and 43% on average.  Georgia has about 14% of their corn planted vs. 26% on average. AL, LA and MS did not release planting updates this week but I am thinking they are a bit behind schedule as well. Bottom-line, there are some definite uncertainties in regard to current soil conditions and the pace of early US corn planting. Click here for my daily report....   

Planting Delays Gaining More Attention: I know this might sound crazy, especially with snow falling and the ground still frozen across a major portion of the corn belt, but for a few producers across the US "early-planting" dates have already been triggered or are right around the next corner. I had the office put together a more detailed look that includes the specific "early plant dates" across the major production states. Remember, these are the first dates the corn and soybean crops can be planted and still be eligible for replant coverage. Any crops planted before the initial plant date would NOT be covered for the Federal crop replant benefit. The past few years we have seen producers in many locations pushing the envelope and rolling the planters a few days early or prior to these dates... That's just not the case this year!               CLICK HERE for my daily report..... 

Bean Dynamics Stay Bullish...

Mar 25, 2014

Soybean bears are starting to talk more about the falling basis levels in South America and the fact Chinese "letters of credit" on a few of the latest US shipments have been questioned. There is now some talk by the bears that the USDA's current Chinese import estimate of 69 MMTs might be a bit high, perhaps 66-67 MMTs is now a bit more realistic. The main driving dynamics remain in place: US old-crop supply shortage, heavy fund interest, and questions regarding South American production and logistics.  The trade is now clearly preparing for next Monday's onslaught of USDA numbers.  Stay tuned as traders adjust to the latest exports, imports, ending stocks, planted acres, etc.  

Argentine Logistical Problems: There was more talk from inside Argentina that a few ships had run aground. From what I am hearing the situation has been cleared up and movement is getting back to normal.  Point is, even though the Argentine supplies are starting to come online it doesn't necessarily mean the crop is going to easily make it out of the country!                                                            CLICK HERE for my daily report...

New Bullish Sentiment on Corn....

Mar 24, 2014

Corn prices remain at the upper-end of their recent six-month trading range.  The bulls continue to talk about strong US demand, coupled with fewer acres and questionable weather conditions. Ethanol margins remain highly profitable and in turn corn used for fuel in 2013/14 has enjoyed a nice jump, from 4.648 billion bushels in 2012/13 to perhaps a hair above 5.0 billion bushels this marketing year.  Exports have also seen a massive jump higher, from just 731 million bushels last year to perhaps 1.8 billion bushels this marketing year.  Feed/Residual usage up dramatically as well, from 4.335 billion bushels last year, to what the USDA is currently estimating at 5.3 billion bushels. Keep in mind however, the current 5.3 billion "feed/residual" estimate mentioned above is the number being highly debated by the trade, with most thinking it is anywhere from 100 to 300 million bushels too high. Most bears are thinking the adjustment to this number will be made in either the upcoming March 31st Quarterly Stocks report or the June Quarterly Stocks Report.  Regardless, bulls are still pointing to the fact total US demand is still higher by some 2.0 billion bushels this year compared to last. From my perspective, this means the corn market might not be nearly as bearish as so many have been predicting. Especially when you consider the political and logistical uncertainties in both Argentina (the world's #2 supplier) and Ukraine (the worlds #3 supplier). Moral of the story, with "money-flow's" renewed interest in commodities, and even though the USDA might magically find some 200 to 400 million bushels in the upcoming March or June quarterly stocks report, I am afraid the trade will need to see just exactly how the US weather plays out before removing much "risk premium." With this in mind, producers should remain patient at current pricing levels.  Any major knee jerk reaction lower by the trade, based on next Monday's USDA report, might be an opportunity to reduce your hedges or buyback any premium you may have sold.  I just have this hunch new-crop corn prices could eventually make a push back above $5.00.  Personally, I am holding off on making any additional sales and have moved my next price target out to $5.24 vs. the DEC14 contract.           CLICK HERE for my daily report...    

Corn Bulls Talk China Demand and US/SA Weather

Mar 22, 2014

Corn bears are questioning yesterday's data that showed US corn once again going to China??? Many sources are thinking the current USDA estimate of China taking 5 MMTs of US corn during 2013/14 as too large and believe the number will soon be reduced.  There is also some questions being raised in regard to how long US exporters keep their exclusivity as "low cost" provider with the South American harvest starting to build.  I continue to hear the Argentine corn harvest is moving right along, with several inside sources thinking the crop will be around 20% harvested by next week.  I am also hearing that the crop might actually be a bit better than some had been anticipating, especially some of the later planted corn. I am NOT suggesting that the USDA still doesn't need to trim their Argentine corn estimate a bit, but perhaps just not as much as many of the big-bulls have been hoping for.  Bulls are arguing that US planting conditions are extremely suspect and may be cause for longer-term concern. Bottom-line, questions regarding US weather and uncertainty still in Ukraine might be enough to keep US corn prices somewhat supported. I just don't see NEW highs in our immediate future. Sideway's to lower is my guess as larger traders prepare for the upcoming end of March USDA reports.   CLICK HERE for my daily report....

Does the Bean Balance Sheet Tighten with USDA News?

Mar 21, 2014
Soybeans continue with the same song and dance...Chinese demand, South America production and extremely tight US supplies. Despite the recent setbacks in China, their total "commitments" for US beans are still some 25% higher than last year.  This number is simple HUGE and has been extremely hard for the market to fully digest. As each week passes without major Chinese cancellations the trade simply becomes more fearful of an even tighter USDA balance sheet.  As of right now, most believe the Chinese have fewer than 1.5 million tons of soybeans left to ship out of the US. This means the USDA's current soybean export estimate of 1.53 billion is more than likely still way too low, some suggesting by 30-50 million bushels too low.  The bears then argue this increase in exports is going to be offset by a much higher increase in imports (60-80 million). Which we are already starting to see as Brazilian beans will soon start hitting US shores (April-May deliveries). That is then trumped again by the bulls who say if "imports" increase substantially then so will the US crush (by 25-45 million bushels)...and so the game of he said she said continues in a vicious cycle.  With the highly anticipated USDA reports just around the next corner (March 31st) and talk that the USDA could drastically increase new-crop soybean acres we might start to see some of the bulls squaring up a few positions.  I continue to believe the $14.60 high in the MAY14 contract (set back on March 7th) is safe and will hold as heavy resistance until the trade can better digest the March Quartelry Stocks Report and Planting Intentions.  CLICK HERE for my daily report... 

 

Beans Off Early Highs as China Switches Cargoes

Mar 20, 2014

Soybeans traders continue to be somewhat confused. Most believe the two key major dynamics: Chinese Demand and South American production/logistics are NOT bullish! Logistic in South America are much improved compared to last year. The corp is being harvested in a timely fashion and appears to be moving out of the ports without many major hiccups. The South American crop also appears to be 5-10 MMTs larger than last year. All of which the bears can argue is NOT bullish. As for China, Shandong Sunrise Grain and Oil Trading (China’s biggest soybean importer), recently confirmed they have in fact "re-sold" three cargoes of Brazilian beans to US crushers. Supposedly, from what I have heard floating around, the company sold about 180,000 metric tons in the past couple of days and is looking to sell even more. Thoughts now are that 5-10 cargoes have been re-sold back to US crushers. There is also confirmation circulating that China has "delayed" or backed-up somewhere between 500,000 and 1 million metric tons of South American soy shipments because of less than anticipated demand caused by bird-flu and negative hog margins. Meaning current Chinese "demand" is also NOT considered bullish. What many traders could be overlooking however is that the larger fund traders have leap-frogged these two dynamics in preference of focusing on what could be a massively bullish March 1st "Quarterly Stocks" Report. It's hard to get my hands around it entirely, but "money-flow" certainly wants to try and push the soybean price border further to the North. The recent March high of $14.60 vs. the MAY14 contract still stands, but for those who are fighting the battle from the short-side, I am afraid we might soon start to see more of the troops advancing towards the rear.  There is no question US soybean import estimates are going to rise, but increasing crush numbers, better than expected exports and a negative residual has the trade fearful of a record tight March 1 stocks report.  CLICK HEREfor my daily report....

Does Russian Rally, Mother Nature Support $5 Corn ?

Mar 19, 2014

Corn continues to hold near the upper end of the $0.30 cent induced "Russian Rally."  The South American harvest is rolling right along and Argentine corn will soon start placing more pressure on US exporters.  I continue to hear talk of China kicking US cargoes, while at the same time perhaps recently buying 2-3 cargoes of Ukraine corn.  This is making me a bit uncertain in regard to Chinese demand and therefore is prompting me to halt all sales and take a more "wait and see" approach.  I had originally thought the Chinese were flush with their own domestic corn and were simply kicking the US cargoes because they didn't need the supply (not necessarily the GMO issue that they are using to allow the cancelations). Now all of a sudden the Chinese  are bringing in corn from Ukraine.  Not that this is a major move or game changer, especially when you consider China has made huge investments in Ukraine infrastructure, and this could simply be part of the annual pay-back, but it is something I want to pay attention to.  From here on out I truly believe it will be ALL about "Mother Nature" and the US weather. If producers can get 80% of the estimated US corn acres in the ground by mid-May, the trade will breath a big sigh of relief, the USDA will more than likely raise their yield estimates a hair higher and price premium will start to be removed.  If on the other hand US spring weather proves to be difficult and less than 80% of the anticipated acres get planted by mid-May, the trade will get nervous and price could continue to push beyond it's current levels. As a producer, I am comfortable being 50% sold/hedge rolling into the planting season.  From a spec perspective, the extremely cold soil temps in many US locations could make planting corn a real race against time, but at the same time the recent run up in price may encourage producers to plant more acres... Lots of rapidly changing moving parts to consider in the next 60-days. Be patient! CLICK HERE for my daily report.....

Time to Look at New Crop Corn Risk....

Mar 18, 2014
Corn demand here in the US remains strong. Ethanol margins are terrific and US corn export shipments are 40% larger this year vs last. Technically corn is falling under a bit of a darker cloud. I am keeping my eye on the $4.65 level vs. the MAY14 contract.  I am thinking if the market eventually closes below this level we could quickly see more large bearish interest form the funds.  To make NEW highs we will need to see theMAY14 contract trade back above $5.02^4, which right now seems like a fairly tall task.  My hunch is we trade between both the key support at $4.65 and key resistance at $5.02^4 until more is known about the situation in Ukraine, the South American crop, Chinese demand March quarterly stocks, and US planting intentions.  Ukraine is currently exporting corn with no glitches or setbacks, but the question remains will this continue? China remains a complete mystery??? In one breath we are hearing Chinese officials say they are buying huge quantities of corn from their own domestic producers because of setbacks in the poultry and pork industries along with a record yielding crop.  On the other hand we are hearing the Chinese are buying corn form Ukraine at the same time they are kicking US cargoes. Seems somewhat crazy, but certainly not unthinkable when China is involved. Weather in Brazil will play a huge part in determining the overall yields for second-crop corn, which is now thought to be about 85% planted. Keep in mind the Argentine corn harvest is now about 5% complete and the crop is quickly becoming more competitive on a global scale.  I am just worried that US corn demand, though strong right now, might not be able to keep the pace needed too excite the trade.  I am also worried that we could see a couple of bearish surprises in the upcoming end-of-month USDA reports.  Moral of the story, if you are not comfortable with your current new-crop risk...I would suggest getting to a level you are comfortable with.  Keep in mind we are still less than $0.10 cents from the most recent new-crop highs, and at levels we haven't seen since this past October.  CLICK HERE for my daily report.

 

Bullish Talk to Bring More Corn Acres.....

Mar 17, 2014
Corn is starting to go in the ground in the Southern parts of the US.  Producers in Texas, Mississippi, Louisiana and a few other states are reporting that the planters are rolling...though some 1-2 weeks behind last years pace.  It sounds like more old-crop bushels have changed hands the past couple of weeks and the "basis" in many locations is starting to more aggressively weaken.  I have this strange feeling the recent $0.80 cent rally in corn prices and renewed "bullish talk" might just prompt US producer to roll out more corn acres than the trade has been anticipating. It will certainly be interesting to see how the acreage estimates play out in the coming weeks.  My fear is the initially USDA survey estimates (out at the end of March) may be too low, as producers views towards corn has somewhat changed, meaning the total planted corn acreage number may ultimately works itself higher rather than lower in the weeks ahead. As for South America, I am hearing more talk that Argentine corn has become more competitive globally with US corn, and that the recent harvest is picking up pace and more bushels are starting to make their way out the Argentine ports. Brazil production still remains somewhat of a mystery as second-crop corn acres and production is still suspect. As of right now the trade guess in regard to Brazilian corn production is still extremely wide at between 65-75 MMTs (USDA currently at 70 MMTs). Bottom-line, corn exports out of Ukraine remain in question, but exports out of Argentina are starting to create more competition for the US. There is also talk that the recent rally in price might not only prompt more second-crop South American corn acres but also more US corn acres. Obviously US weather and planting conditions will remain a concern and major determining factor.  I continue to believe the market could go in either direction right here and like my position of being 50% sold/hedge in regard to my new-crop estimated production. Spec players may want to start thinking about building various types of small "Long Corn vs. Short Wheat" positions (JUL14) as wheat premiums now exceed $2.00 in relationship to corn.  CLICK HERE for my daily report...... 

 

Is Bullish Soybean Direction Slipping?

Mar 14, 2014

Soybean prices remain extremely volatile and are seriously searching for NEW direction. If net positive weekly US old-crop soybean export sales, South American weather concerns and lack of significant Chinese cancelations of US beans aren't enough to keep the bulls excited, then how about talk that a ship ran ashore at the main Argentine port of Rosario this past weekend and continues to block a portion of the traffic...can it get any crazier???  The bears however are cheering about the good folks over at Allendale's latest soybean acreage survey, which is now projecting US producers will plant a NEW record 83.2 million acres in 2014.  Keep in mind this is much higher than the current USDA estimate of 79.5 million, much higher than last years planting of 76.53 million and much higher than the 2009/10 record soybean planted acreage of 77.45 million. From a technical perspective I continue to keep my eye on the $13.65 area in the MAY14 contract and the $11.65 area in the NOV14 contract.  A close below those levels could mean at least a temporary top is in place and both the old-crop and new-crop markets could be poised for a more severe setback in price.   CLICK HERE for my daily report....

Beans Higher: Can We Close Above $14....

Mar 13, 2014

Soybean prices, especially in the front-end seem to be a little too salty up above $14.00.  With China clearly submerged in supply (both from the US and Brazil) and deeply negative crush margins, it's going to be tough for the trade to support prices north of $14 a bushel without some type of NEW weather story or more dire logistical issues coming out of Brazil.  Yes, CONAB reduced their soybean production estimate for Brazil down to 85.4 million metric tons (a reduction of 4.6 million and well below the current USDA estimate of 88.5 million). In addition exports were reduced from an estimated 47.7 million metric tons down to 45.3 million.  I am just not sure that will be enough to keep the trade supported at these lofty price levels.  Keep in mind this is still higher than last years Brazilian production of 81 million metric tons and well above the previous years production of just 66.6 million metric tons.  With the Mato Grosso harvest quickly approaching 75% complete; Beans in Brazil moving much more quickly to the ports this year; Concerns about the Chinese economy; Concerns about the Chinese crush margins and nearby over supplies, I am afraid we are going to need a few new wrinkles in the sheets to get NEW bullish interest and money flowing into this market at these levels. I am NOT saying we continue to fall straight out of bed (US supplies still remain tight), but I am starting to think the highs are in place! That is unless some type of MAJOR bullish US weather story hits the wires. Unfortunately, that might take some time to build into a crescendo... Make sure you are adjusting your plan accordingly. There continues to be widespread rumors from Brazil that China is rolling another 10-12 cargoes of soybean sales forward from May and June to July and August. China appears to be doing whatever it can to push supply forward and avoid the negative crush margins and supply indigestion that now prevails.                               CLICK HERE to receive my daily report.....

China Concerns Trump Bullish Bean News ...

Mar 12, 2014

Soybean bears pressure the market in the overnight and the front-end is now some $0.80 cents off it's recent high. The biggest concern is obviously China! As I mentioned in the opening comments, the larger fund traders are becoming more concerned about the overall health of the Chinese banking system and it's economy.  In return Copper, Crude Oil, and Soybeans (the big three) are being hit fairly hard. We can debate  the rumors of China canceling some 15-20 cargoes of Brazilian beans, but this is a bigger longer-term concern that is starting to spook a few. If your a bull you can easily argue that China is canceling Brazilian beans as opposed to US beans because of "quality" concerns. It seems as though the heavy rains as of late have caused some more serious issues in Brazil, especially in regard to overall quality.  The other bullish debate being raised is the overall size of the South American crop. As it stands right now the USDA still has the South American crop coming in some 10 million metric tons larger than last year.  Oil World, who is a respected source in the industry, is estimating the South American crop at about 5 million metric tons less than the USDA. In other words there seems to be about 5 million metric tons in question right now.  From my perspective this debate may linger on for some time as the weather remains highly unpredictable in South America. But we can't loose sight that both sources are predicting a much larger crop than last year.  More predictable right now is the bearish argument and the fact the Chinese crush margins continue to plummet. Several  sources thinking they maybe negative by some $50 per ton in many locations. There is also concern that as the US crush margins continue to pull back beans being imported from South America become a much more viable option.  As of right now it still doesn't really pencil to import beans into the US from South America, but as the levers start to move and the dynamics shift it is certainly looking more and more like a legitimate offer.  Bottom-line, the concerns in China seem to be trumping all other fears. Producers who have gotten greedy may end up paying the price... CLICK HERE for my daily report.....

The Next Bullish Corn News....

Mar 11, 2014

Corn bulls were excited to see the USDA raise exports by 25 million bushels.  The bears however are questioning this move, especially when you consider the USDA elected to leave Chinese corn imports "unchanged" at 5 million metric tons, while they continue to reject US cargoes??? The other not so bullish news is the fact global ending stocks moved higher...not lower, like so many in the trade had anticipated. Last month the USDA reported global ending stocks at 157.3 MMTs, this month the trade was thinking that number would be lowered to around 156.3 MMTs. In other words a reduction of 1 MMTs, instead it was raised by over 1 MMTs to 158.47.  The big mystery to the bulls was the fact the USDA opted to leave their Argentine and Brazilian corn estimates "unchanged" rather showing a reduction like so many had anticipated (myself included). I suspect there are still just too many question-marks in regard to second-crop corn production in South America, i.e. how many acres will eventually get planted and will the weather cooperate to provide good yields.  Simply stated, there are still a lot of balls in the air in regard to South American corn production. Looking ahead, there is huge anticipation building in regard to the March 31st quarterly stocks report and the planting intentions update.  I suspect the next couple of weeks could see some significant price swings as larger traders make adjustments to their current positions.   CLICK HERE for my daily report.....

South American Crop Still Questioned? CONAB will be out tomorrow morning with their latest corn and soybean estimates. It will be interesting to see how big of cut they make to the Brazilian corn and soy crop. Remember they still have their Brazilian corn crop estimate at a whopping 75 million metric tons vs. the USDA at 70 million.  Also keep in mind the USDA still has total South American soybean production up over 10 million metric tons from last year's estimate of just over 145 million. Oil World on the other hand has their total estimate up by just over 5 million metric tons. With such large discrepancy the CONAB numbers will be important to the trade.CLICK HERE for my daily report....

Who's Holding the Bullish Bean Cards?

Mar 10, 2014

Is The Recent Grain & Soy Rally Over? The action these past few days seem as if it has been, what I like to call..."forced buying". In other words buying has occurred in somewhat of a begrudging fashion.  This makes me fearful that the bullish cards have been picked up and are now being held by a lot of "weak-hands". Keep in mind many of the traditional large spec's and longer-term position players have been somewhat stumped by the recent move higher and therefore are NOT the ones playing out this bullish hand.  What we have to be worried about is if the much shorter-term "algos" are the ones holding these final few cards. If that's the case then any sign of weakness could prompt them to immediately fold and liquidate, causing the grain and soy markets to give back a large portion of their recent gains... I am not saying we haven't seen better fund interest as of late in the commodity markets, because we have.  I am just saying a large portion of these late gains are more related to emotions (turmoil in Ukraine and weather) than complete game-changing fundamentals.  Just something to think about as we move ahead???  CLICK HERE for my daily grain report....

 

$5 Corn: See the Moving Parts that Pushed Us There

Mar 07, 2014

Corn prices for old-crop surge above $5.00 per bushels on continued strong demand, heavy technical buying and short-side covering.  Money-flowing back into commodities, looking for either a "weather" type hedge or "geo-political" hedge in light of Putin's latest move into Ukraine, continues to propel the trade higher.  As I stated late last week, and again Monday morning, move out of the way as the bulls run by! For the moment the dynamics, at least on a macro scale, have dramatically changed. Make certain you are NOT exclusively focused on the S&D's...there are simply many more moving parts to consider these days. Producers should remain on the sideline, waiting for even higher prices before making additional sales. Spec's should remain cautious in trying to pick the highs in this environment. Click here for my daily report...

Weather traders are keeping a close eye on the recent El Niño "watch" for the summer of 2014 that was issued yesterday by the NOAA yesterday. The NOAA is saying, "A significant downwelling oceanic Kelvin wave increased the oceanic heat content and produced large positive subsurface temperature anomalies across the central and east-central Pacific. In addition, toward the end of the month, strong low-level westerly winds re-appeared over the western equatorial Pacific." To summarize, "All models predict warming in the tropical Pacific, but there is considerable uncertainty as to whether El Niño will develop during the summer or fall. If westerly winds continue to emerge in the western equatorial Pacific, the development of El Niño would become more likely." Otherwise the NOAA will maintain their "neutral" stance. From how I understand it, the conditions appear to be right for an El Niño event to come our direction either this summer or this coming fall. But since the longer-term models can change so quickly there is still some big uncertainty...best bet still looks to be flipping a coin. Click Here for my daily report!

Can Demand Keep Bean Prices Higher..

Mar 06, 2014

Soybean market is digesting "better than expected" export sales released this morning by the USDA along with yesterday's announcement that China had "canceled" 245,000 MT's (essentially 4-cargoes). The bulls are winning the battle, and the "cancellations" did very little squelch their desire to pouch this market higher. From a technical perspective, last Thursday's high in the MAY14 contract at $14.45^4 still remains heavy resistance.  Many tech trades believe if we can close above this recent high, $15.00 old-crop bean prices can NOT be ruled out of the realm of possibilities. With new-crop  prices closing in on $12.00, I continue to suggest that producers who have less than 50% sold/hedged, should strongly consider rewarding the market and making catch-up sales. Reducing risk on the rally continues to seem like the best of practice.                             CLICK HERE for my daily report....

Corn Prices Find Traction in Volatile Markets.....

Mar 03, 2014

Corn could become much more bullish if political problems in Ukraine stifle the movement of gain out of the country.  From what I hear Ukraine still has another 7-8 million metric tons of corn in the pipeline scheduled for export.  The Brazilian corn crop is still being heavily debated, but most in the trade seem to be in agreement that the USDA is close (at least for the time being) with their 70 million metric ton estimate. I have heard several sources projecting the crop anywhere from 75 MMTs to as low as 65 MMTs. From my perspective it is just still too early to provide a more serious and specific guess. Remember, a lot will hinge on the late Brazilian rains this Spring as it has a major impact on their second-crop corn. Here at home there is still no final ruling from the EPA in regards to the ethanol RFS. In fact several sources are thinking it will be another three-months before we hear anything specific. As long as ethanol margins remain strong, as I suspect they will, especially with crude oil prices pushing higher, corn usage estimates should remain at or above the 5.0 billion bushel mark. Livestock margins also remain strong.  Bottom-line, corn is starting to find a bit more traction and is close to breaking through the upper-end of the trading range.  These next few days, as we head into the March 10th USDA report could prove to be pivotal.  CLICK HERE for my daily report... 

 

Corn Trades to 5-Month High: Remember, Ukraine is slated to be the worlds third largest exporter of corn.  With the country turned upside down and "money-flow" starting to once again make a more positive push into commodities, I am   pulling ALL current sell orders and price targets for new crop production.  I am going to remain at 45% sold/hedged until more clear direction can be seen.    CLICK HERE for my daily report....

 

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