Sep 16, 2014
Home| Tools| Events| Blogs| Discussions| Sign UpLogin


April 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.

What is the USDA likely to do with late planted Corn?

Apr 30, 2013

We obviously all know planting is running behind schedule, and the latest weather models are showing we will fall even further behind our traditional pace in next weeks data. Remember what the USDA says, "Corn plantings by mid-May are important for yield potential because that allows more of the critical stages of crop development, particularly pollination, to occur earlier, before the most severe heat of the summer. Earlier pollination is also generally associated with less plant stress from moisture shortages." Keep in mind they have also made it well know that the planting progress and weather data used is primarily for eight key corn-producing States (Iowa, Illinois, Indiana, Ohio, Missouri, Minnesota, South Dakota, and Nebraska). Those eight states typically rank in the top 10 corn-producing states in the US and account for an average of 76 percent of US corn production. 

  • As of Sunday those key 8-states showed the following planting progress: 
    • IA 2% planted vs. 44% last year vs. 36% average 
    • IL 1% planted vs. 76% last year vs. 36% average
    • IN 1% planted vs. 67% last year vs. 30% average 
    • OH 2% planted vs. 54% last year vs. 25% on average 
    • MO 15% planted vs. 71% last year vs. 42% on average
    • MN 0% planted vs. 43% last year vs. 33% on average 
    • SD 0% planted vs. 28% last year vs. 12% on average 
    • NE 3% planted vs. 40% last year vs. 26% average.

Bottom-line, from what I hear the USDA likes to see 80% of the corn crop planted by mid-May (particularly in these 8-states). If 90%percent or more of the corn crop were to be planted by mid-May they would in turn tend to raise the expected corn yield by 2.89 bushels per acre. Similarly if only 70% percent of the corn crop is planted by the middle of May they would more than likely reduce their yield expectations by 2.89 bushels. As you can imagine, talks of lower yields in the June report, along with several bulls in the industry thinking that 3-5 million corn acres may now go unplanted has the bears backpedaling a bit. 

 

To recieve my entire report CLICK HERE

 


Soybeans: The Tale of Two Story's

Apr 29, 2013

Soybean traders continue to argue and debate a story of two complete opposites. You have the "old-crop" story, which by all accounts remains bullish, on what appears to be an almost impossible solution for supply side of the equation to solve. The cash basis continues to push well beyond $1.00 in many locations across the country. How much further will it go, simply remains an "unknown." We are officially in uncharted waters with old-crop supply. Personally, I doubt we have seen the final push, though it seems to be getting closer and closer. On the flip side, the "new-crop" story couldn't be more intimidating for US producers. The three main driving forces behind the previous strength in the soybean market have ALL reversed course.

Chinese Soy Demand: With China taking some 60-65% of all the global soybean trade, their direction is highly monitored. The past few years we have seen explosive growth in Chinese soybean demand. In the April 2003 WASDE report, Chinese soybean imports were raised to a NEW record of 16.5 million metric tons. Fast forward 10-years, and Chinese soybean imports were thought to possibly reach 63.0 million metric tons. Now all of a sudden the USDA is backing off that estimate reducing it down to 61.0MMT's, with talk in the trade that it could soon be lowered again and again during the next few months. The Chinese economy is slipping and the "bird-flu" virus is causing major panic among consumers. In the process poultry and pork demand is plummeting. From what I have heard, as of ate last week close to 150,000 birds have been culled and 200 plus poultry markets closed across China. The implications on overall feed demand is certainly bearish, but to what extent is still not known, and may not be known for some time. I hate to say it, but this could be a "black swan" swimming right in front of our face, especially if the new H7N9 bird-flu virus is not contained. The last I heard, there are now over 125 reported case and 24 deaths. You need to recognize that growth in Chinese "soy demand" has been one of the main driving forces for higher soy prices. With out any growth this year the "demand" side of the equation could be extremely limited. From Jan-Mar Chinese soy imports have already dropped by 13%... I should also point out, late last week, the International Grain Council cuts China's current year soybean imports 2 million metric tons down to 59 million metric tons due to bird-flu complications. This Is REAL...

South American Production: In order to help meet and keep up with Chinese demand, South America's production has exploded. During the 2000/2001 crop year the WASDE reported Argentine soy production at 27.8 million metric tons, today they are estimating around 51.5 million tons will be produced. Even more impressive is Brazil, who was producing 39 million metric tons of soybeans back in 00/01 and is now producing and estimated 83.5 million metric tons. Keep in mind we are talking about 25-30 million metric tons MORE out of South America as compared to last year. Last years rally to the $17-$18 range was sparked by a major hiccup in South American production. This key dynamic associated with higher prices has obviously shifted back the other direction.

US Production: The USDA is currently estimating US producers will plant our largest ever soybean crop, with an estimated 77.1 million acres going in the ground. The kicker is, this number could continue to get larger and large as producers switch more acres to beans. Certainly some of the acres to the extreme North and South will end up in "Preventive Plant" rather making the jump to more soybean acres. In the end though I am afraid our new record is going to be broken a couple of more times as the USDA ultimately pushes soybean acres another 1-3 million higher. Lets also keep in mind US producers harvested very good soy yields considering the extreme growing conditions. This has some in the industry not only fearing a new record number of acres, but possible even a new record yield. All of which could lead to a major increase in supply, on the heels of major supply increase in South America and slowing demand growth in China.

When you see the three major dynamics of the bull market not just shifting, but actually reversing, it is hard to be highly optimistic about soybean prices moving forward. Certainly there are some weather worries and some bullish wild-cards still in the deck, but the potential for us to draw out to a strong bullish hand is getting slimmer and slimmer. I think my good friend and "Grain Guru" Andy Daniels summed it up best late last week when he said, "I do NOT want to get caught up in the dangerous old crop sport, 'the running of the bulls,' and miss the nucrop main event, 'dancing of the bears.'" Click here now for my full report.

Will the Wheat Market help Rally all Grains??

Apr 28, 2013

Wheat bulls should be excited to hear rumors that some insurance companies are already "releasing" wheat in parts of Western Kansas. There is also talk of adjusters traveling around and inspecting fields to see if producers still have their pivots running. Point is the problems in the HRW wheat areas are becoming more of a reality.  As I have mentioned time and time again, the wheat market is dangerous, so be extremely careful if you are playing it aggressively from the short side. Let’s not forget the Kansas wheat tour starts next week... I suspect we will hear further confirmation of damage. The weather has improved over the past few days but has the damage been done and what effect will it have on yields.  If the damage is not found, prices will deflate very quickly, so make sure you CLICK HERE to prepare for some extreme market volatility.

 

Must Read: How Foreign Policy could affect the US Farmer.

Apr 26, 2013

 Your going to have a tough time swallowing this one, but members of the Obama administration have proposed ending the nearly 60-year practice of buying food from American farmers and then shipping it abroad as part of International Aid campaign....Instead they are wanting to simply send "money." The administration says the foreign countries would simply prefer the "money," that way they can buy more food from their own local farmers. Is someone kidding???

The complaint is that a lot of what we donate is consumed in shipping charges and higher prices paid to US farmers. If we simply gave them the billions in "real dollars" they could buy from their local markets, help those who are financially stressed and more quickly provide for those in need. They also said it will help them invest more money into their own agricultural practices. Just what we need, more American tax-payers dollars being sent overseas to help our competitors improving their farming practices. Am I missing something here??? Not only are the people who have their hands out now complaining about what they are receiving for FREE, but we are stupid enough to listen and actually agree with their demands.

Proponents of the plan, however, say it would enable the United States to feed about 17 million more people each year, while helping to fight poverty by buying the crops of farmers in poor countries. I understand this...but I also understand that if every politician in America simply donated a much larger portion of their wages and earnings we could also help a lot more people. Donations of US surplus food have been a hallmark of humanitarian aid efforts for years. This program has also given US farmers producing bumper crops an outlet for their goods while helping the hungry abroad. The policy first came under fire in the 1990's as humanitarian groups said donated food did little to develop farm economies elsewhere and encouraged dependence on US exports. Countries wanted "cash" aid, rather than commodities, in an effort to get assistance to needy areas faster and boost developing-world agriculture. In addition to hurting US farmers and those in the shipping industry, just how much of that "cash" will be pilfered by shady politicians in foreign lands???

Opponents to the proposals argue that the current approach which is based on donating US crops to foreign land, generates jobs and ensures that famine-struck areas have food when nearby crops aren’t sufficient. Donated US food maintains about 44,000 jobs for farmers and shippers. It’s estimated that purchases of US corn, soybeans, peas and other crops from US agribusinesses including ADM, Cargill and Bunge would see a 21% cut next year under the proposal. Before you throw Obama under the bus, keep in mind back in 2007, President George W. Bush proposed similar changes. The proposal, however, ran into stiff opposition from the potent alliance of agribusiness, shipping and charitable groups, and Congress quickly killed the plan. The fear now is that, amid tight federal budgets, reform proponents say Congress might be more receptive to changing the food aid program.

The proposal has support from a few key lawmakers, including the Republican chairman of the House Foreign Affairs Committee, California Rep. Ed Royce. Some conservatives may support the idea due to the administration’s estimate that the shift could save $500 million over 10 years. I can't believe it, but I have even heard Ag Secretary Tom Vilsack is in support of the new proposal. Supposedly he has said, "This is simply about getting more assistance to more people more quickly with fewer dollars." Sorry...it seems like it could mean a heck of a lot more than just that if approved. Unfortunately it sounds like US farmers will be suffering the consequences. Like it or not, I am for "Food Aid" not "Cash Aid."

To recieve my entire daily report click the link below.

CLICK HERE

Has the long-term trend in soybeans changed?

Apr 25, 2013

 Producers and traders should take note of the recent changes I have made in my "Bullish-Bearish" ratings monitor along the right side of the report. This is the first time in several years that my soybean rating has dropped to a level of "Negative-3." We could argue all morning about the specifics, but I am simply becoming more and more concerned about China and the large amount of cheap soy supply South America will soon be sitting on.

Not only does there seem to be more concern than normal in the trade about the strength of the Chinese economy, but there is more and more fear in the air regarding the H7N9 "bird-flu" virus. Just yesterday the "World Health Organization" reported this is one of the most lethal flu viruses ever studied. In fact Dr. Keiji Fukuda, a leading flu expert, is saying people in Beijing are catching the H7N9 virus from birds much more easily than they were the H5N1 virus that ravaged the poultry industry across Asia back in 2003. I should also note, the virus has now spread into Taiwan. I maybe preaching to the choir, since the NOV13 new crop soybean contract has essentially gone downhill since posting its $14.09^6 high back on September 14th of last year.

There has been a few blips on the radar screen that have created a couple of brief rallies, such as South American weather woes, logistical concerns, and Chinese demand... but nothing that has been able to sustain a rally longer than 30-days. Point is the trade continues to lean on the sort side of the bean market. All rallies have been unable to hold and have been answered by the trade ultimately posting lower nearby lows. Outside macro concerns aren't helping the situation, as China's economy seems is being doubted more and more by those in the know.

Bottom-line, the tightness in old-crop soy has been helping to keep this market supported. Eventually we are going to walk in one morning and the entire trade will have flipped the page (electing to look at the new-crop picture rather than the old)... As producers we have to prepare ourselves. Spec's should continue to look for opportunities to play the new-crop game from the "short" side of the table.

For a risk free trial of my daily report just click the link below.

Click Here

Bullish CORN story may be developing in the East.

Apr 25, 2013

The far East!!! I am hearing there could be a few weather worries popping up for Chinese corn producers. Nothing as of yet to get overly excited about, but we do have to recognize the fact China is the worlds second largest corn producer, any type of production glitch will certainly cause extreme ripples across the market, especially since very few are looking that direction. From what I hear producers in China's northeast corn belt are running a couple of weeks behind in planting. This area is important because it produces about half of China's domestic supply. In fact, Heilongjiang, the top corn producing province, has had its wettest winter in 50 years, leaving more than 12 million acres extremely wet. On flip side some areas to the northwest are too dry and are starting to cause some concern as it threatens emergence. Bottom-line, with China's domestic corn production being critical the market could  quickly get more nervous if weather issues become a more threatening concern. Keep the Chinese weather situation up on the radar screen.  World Corn Production Data:

US producing 273.8MMT's

China producing 208.0MMT's 

Brazil producing 72.5MMT's 

EU-27 producing 54.7MMT's 

Argentina producing 26.5MMT's

For a risk free 30 day trial to my daily thoughts CLICK HERE. 

Is $9 soybeans a real possibility?

Apr 24, 2013

Soybean bulls continue to question the $9 to $10 price tag that bears are throwing around the trade. But with China's economy in question and the "bird-flu" virus continuing to curb demand, Chinese soy imports could continue to ease. Keep in mind the USDA recently reduced their estimates for Chinese soy imports from 63MMT's down to 61MMT's. The trade believes that number is still 3-5MMT's too high.

With South America having a glut of soy supply that needs to eventually be shipped, and US producers set to plant a record large soybean crop, the world may end up going from an extremely tight supply situation to a glut of soy supply all in the blink of an eye. Just make certain you understand the price storm we could be facing if US soy ending stock eventually move north of 500 million... don't laugh just yet, it could become a reality!

To read my entire daily report click the link below and I will send it directly to your email.  

Click Here 

Is 2 to 3 million acres of Corn lost this year a big deal?

Apr 24, 2013

There is no question that corn yield potential declines with delayed planting AFTER optimal dates pass due to a number of factors, including: a shorter growing season, greater insect & disease pressure, and higher risk of hot, dry conditions during pollination. BUT simply stated we are not yet at that point! Certainly some acres to the north will be lost to flooding and late planting (maybe as many as 2-3 million), but a rebound in yield out of Iowa and Illinois will do much more to than just offset those losses. Consider the facts below: 

  • Iowa's yield last year was reported at just 137 bushels per acre. The states highest yield ever came in 2009 at 182 bushels per acre. Producers generally plant close to 14 million acres and harvest just over 13 million. 
  • Illinois yield last year was reported at just 105 bushels per acre. The states highest yield ever came in 2008 at 179 bushels per acre. Producers generally plant just under 13 million acres and will harvest just under 12.5 million. 
  • North Dakota producers intend to plant 4.10 million acres, up 14% from last year. Yields last year were reported at 122 bushels per acre with the states highest ever being in 2010 at 132 bushels per acre. 

Point is 2-3 million acres loss up in areas like North & South Dakota, where yields at best will average 135 bushels per acre, amounts to a reduction of between 200 to 400 million bushels. Throw in some areas in Minnesota and Nebraska and maybe you push closer to a 500-600 million bushel loss. But if yields in Iowa and Illinois snap back to any extent it dwarf's these losses. A rebound in Illinois yields to just the 150 level on 12.5 million harvested acres amounts to a production increase of 1.875 BILLION bushels. A 160 type yield out of Illinois will generate more than 2.0 billion in supply. Same scenario in Iowa, a jump in yields back to just 155 bushels per acre on 13 million harvested will generate 2.015 billion bushels. Now you can see why the big players in the trade are giving more attention to the replenishing of soil moisture levels in Iowa and Illinois opposed to the flooding threats, delayed planting to the North and thoughts they may lose 1-3 million of their corn acres. For a risk free 30 day trial to my daily thoughts CLICK HERE. 

My Current Thoughts on Cattle?

Apr 23, 2013

 I am thankful that I had the foresight to buy the APR13 134 Live Cattle puts back in late-November of last year. These were financed by selling the 140 calls and have been a huge life saver. With the APR13 contract set to expire next Tuesday, I am now left with another round of decisions, just like you. Do I simply bank the profits and try my luck going uncovered or simply with no protection in place, or do I roll my shorts out into the June or August contracts??? My fear is the "cash market," because of the historical weakness often seen in the basis moving forward, may suffer much greater downside risk than the June or August live cattle contracts on the board. I would absolutely hate to see flat-price rally while the basis weakens. If I had hedges on the board, I would not be able to realize the benefits of the flat-price rally while at the same time being fully exposed to the downside risk associated with a weakening basis. With the board seeming as if it has less downside risk than the cash market I am thinking it is going to be smarter to simply market the cash cattle and look for some limited-risk bullish strategy to re-own the board. Bottom-line, be smart, take advantage of the seasonal strength in the basis, bank your hedge profits...and jump to another ship. Below are a couple of highlights from yesterday's USDA "Livestock Slaughter Annual Summary."  

Total red meat production for the United States totaled 49.6 billion pounds in 2012, slightly higher than the previous year. Red meat includes beef, veal, pork, and lamb and mutton.

Beef production totaled 26.0 billion pounds, down 1 percent from the previous year. Veal production totaled 125 million pounds, down 8 percent from last year. Pork production, at 23.3 billion pounds, was 2 percent above the previous year. Lamb and mutton production totaled 161 million pounds, up 5 percent from 2011.

Commercial cattle slaughter during 2012 totaled 33.0 million head, down 3 percent from 2011.

The average live weight was 1,302 pounds, up 25 pounds from a year ago. Steers comprised 49.8 percent of the total federally inspected cattle slaughter, heifers 28.6 percent, dairy cows 9.6 percent, other cows 10.3 percent, and bulls 1.7 percent.

Commercial calf slaughter totaled 772,100 head, 9 percent lower than a year ago. The average live weight was 260 pounds, down 3 pounds from a year earlier.

Commercial hog slaughter totaled 113.2 million head, 2 percent higher than 2011.

The average live weight was unchanged from last year, at 275 pounds.

There were 806 plants slaughtering under federal inspection on January 1, 2013 compared with 867 last year. Of these, 627 plants slaughtered at least one head of cattle during 2012 with the 14 largest plants slaughtering 55 percent of the total cattle killed.

Nebraska, Iowa, Kansas, and Texas accounted for 49% percent of the United States commercial red meat production in 2012, similar to 2011. 

Follow the link to receive my free daily report.

Click Here

What is the deal with CORN?

Apr 23, 2013

Considering the ongoing rain and cooler than normal temps, Corn producers are stumped by the recent price slide. The trade however seems to be looking past the current US weather concerns, and is banking on the US producer’s ability to get the crop in the ground.

In typical fashion, I am starting to think the market could be getting out over the tips of its skis just a bit. Meaning we could be getting a little ahead of ourselves to the downside in new-crop.

Yes, I certainly understand the longer-term "supply and demand" side of the equation, along with the implications associated with a 150-plus yield crop and sub $4.00 corn. The concern however that I currently have is that a large majority of the crop is still sitting in the bag, and there are a ton of weather related "wild-cards" being added to the deck each day.

Producers however should be careful getting all bulled up simply on the planting delays. Keep in mind back in 2009 we were only 5% planted at this juncture and ended up with the highest ever national yield of 164.7 bushels per acre.

A yield anywhere near that this time around would produce a crop of more than 14.5 billion bushels and an extremely burdensome carryout closer to 3.0 billion bushels. You don't need me to tell you where corn prices will be in this scenario...sub-$4 is almost a guarantee.

In 2009, with just over a 13 billion bushel crop, prices in September fell to below $3.00 per bushel.  On another note Brazil is set to increase the ethanol blend in fuel from 20% to 25% from May 1st, and has announced tax cuts on the biofuel to help boost production.

Maybe this will help keep a few more corn bushels inside the Brazilian borders.

For a risk free 30 day trial to my daily thoughts CLICK HERE. 

!!

Be patient, don't panic on today's sell off!!!

Apr 22, 2013

You have to believe talk of a drier and warmer extended forecast, along with the major drinks many US fields have taken as of late, new-crop prices will start out under pressure. My thoughts are eventually more planting delays and major flood headlines will become a reality and the market will be forced to add in a little weather premium to the nearby equation. I suspect old-crop soy, especially meal should remain limited to the downside as demand for nearby supply remains tight. Wheat should also remain fairly stable, at least until more is known about the upcoming cold-temps. I certainly think there could be another push higher with limited supply available.  Check out all my thoughts going forward by CLICKING HERE. 

Flooding: Effect on Grain Prices This Week?

Apr 21, 2013

Weather hear in the US continues to be extreme! From drought to flooding in a blink of an eye. Reports indicate the Mississippi river is now expected to crest 8 to 12 feet above flood stage at several spots in Iowa, Illinois and Missouri, probably by Sunday or Monday, or later into next. Barge traffic on the Mississippi and Illinois rivers were halted on Friday due to several "locks" being closed because of dangerously high water levels.  Corn and bean prices spiked at the ports to 1 month highs, as grained was trying to be sourced to load cargo vessels.  On the flip side for producers, most Midwest river elevators saw prices slip as grain was backed up at the elevators. The Missouri River is also expected to exceed flood stage by up to 10 feet at some Missouri locations. Areas along the Red River Basin, between North Dakota and Minnesota, are also said to be sand-bagging in an effort to prevent flooding. Illinois Gov. Pat Quinn declared a state of emergency Thursday afternoon, as heavy rainfall over the past few days has created dangerous flooding in areas across the state. Up to a foot of new snow is expected in northern Minnesota. Duluth has already received 24 inches of snow this month, and the additional snowfall could push it past the April record of 31.6 inches set in 1950. Snow and ice forced closure of sections of Interstate 70 and Interstate 25 in Colorado.  How will these shutdowns effect grain prices this week?  Get all the insight to whats driving grains prices by CLICKING HERE....

What I Like About Beans....

Apr 19, 2013

Soybean bulls continue to believe USDA export estimates of 1.350 billion is too low...suffice to say, I have to agree. There is also more talk about global meal shortages driving near-term prices and bull-spreads higher. I continue to like meal over oil, old-crop bulls spreads, and old-crop vs. new-crop spreads. I see no real solution to the protein problem!  Technical traders will be keeping a close eye on the $14.40 level in MAY13 soybeans, as it has been an area of tough resistance as of late. I should also point out producer selling has been rumored to be much heavier as of late on the pop in both flat-price and basis. Most sources in the domestic market have rolled basis bids forward from May to July. It won't be long and they will be rolling forward to the Nov contract. It will will be interesting to see how it all plays out??? Producers who can get close to $15 cash may want to consider moving a few bushels then re-owning the board in some capacity. An "old-crop vs. new-crop" bull-spread or simple call type strategy can be entertained.  Click here to get my report that details the bean market. 

Soy Complex: Meal vs Oil - Where are we headed?

Apr 18, 2013

Soymeal continues to create a recent buzz, as the trade has become more fearful that Argentina will simply not be able to supply the world with its needed supply. There is talk that while the April and June crush in Argentina may stabilize, moving forward it could suffer deeper setbacks. Meaning more global demand for meal, from sources like the US, who doesn't have the extra surplus, and or Brazil who can't seem to get the supply shipped out the door. I would agree that it's ALL about soymeal, and I also agree with 100% of the above mentioned concerns... except for one caveat, "Chinese Demand."  Trust me when I tell you this "bird flu" virus is becoming more and more worrisome, and could ultimately be the "Black Swan" swimming right in front of our face. There is already talk that China's poultry feed will slump some 20% plus. Keep in mind poultry demand has fallen by more than 70% in China since the virus first popped up in March. Soybean oil may struggle as there continues to be talk of three cargoes of Argentine bean oil headed for US shores (possibly landing next week). This could obviously add additional pressure to US soy oil prices.... "Meal vs. Oil" spreads my end up paying huge dividends and are certainly worth considering??? Keep in mind there is also a historical tendency for Meal to gain on Oil during the next several weeks. On a side note there continues to be disappointing talks regarding soybean yields in Brazil's Bahia state. Many thinking 30% below their early hopes, corn yields down over 20% from what some were thinking on increased dryness and more intense insect damage.   Click hear now and I will break it all down for you in the Van Trump report.

Don't get overly bullish Wheat!

Apr 18, 2013

 Wheat continues to be somewhat of a sleeper, especially with the recent LARGE purchases by the Chinese. Even though I have been saying there is major upside potential, I have to WARN all traders and producers, if major production glitches don't play out, we could see some major backpedaling down the road. The problem is if US corn production rebounds, as I anticipate it will following the improved soil moisture levels, the wheat "basis" could absolutely get hammered. If corn becomes more readily available on a global scale (increased production in South America, Ukraine, US, etc...) it will leave a significant portion of wheat searching for a home. I have to imagine doors once opened welcoming wheat as a feed ration will quickly be slammed shut.  With this in mind don't be afraid to price more bushels and or lock in the basis on the recent rally . I am now moving to 70% priced/hedged in 2013 and 35% priced/hedged in 2014. The backend of the wheat market is starting to be more of a concern to me on a longer-term scale. Growing wheat with prices above $7.00 a bushel (JUL14 trading above $7.50) still tastes good, below $7.00 the taste isn't so sweet.  

Black Sea wheat production can not be ignored. Just yesterday the Russian Prime Minister threw out an estimate of a 20 million metric tons plus gain in 2012 Russian grain production.  As I pointed out earlier this week, 11.5% and 12.5% protein wheat is trading at a $35 to $55 per metric ton discount to US wheat from late-summer forward. Simply put, our window of opportunity to make large sales may quickly be closing.   

Some hope still remains for Soybeans!!

Apr 17, 2013

I am starting to hear about more problems in Argentina and Brazil, especially in regards to soymeal. From my perspective there may end up being some significant business switched-back to the US if the rumors turn out to be true. Both Argentina and Brazilian soymeal shipments are much less than last year. In fact they have yet to ship the EU even half of what they exported to them last year. Crush margins continue to be extremely poor, coupled with continued logistical problems and poor margins in South America there is still room to be conservatively bullish old crop. New-crop soybeans remain an entirely different story. The bears continue to talk about more beans acres going in the ground here in the US. There is also talk that "IF" corn prices drastically fall (say sub-$4.50), South American producers will quickly shift heavy amounts of corn acres into soybeans next year. Let’s not forget the trade has also been questioning Chinese soy demand. The H7N9 "bird flu" virus is certainly not helping matters either, as many in the trade speculate it is doing more damage to soy demand than the market has currently taken into account. To get this type of story and more on a daily basis   CLICK HERE.

Quality US wheat: A bargain for China?

Apr 16, 2013

There has to be another reason China is in buying US SRW wheat, when they have other cheaper alternatives to rebuild reserves. We might not know the answer for a while, but I promise eventually we will see where the bullet came from. I am also becoming more and more convinced that the US wheat crop is in worse shape than the market is currently trading. From what I am hearing, parts of Oklahoma spent over 40-hours  in below freezing temps. Parts of Kansas spent close to 20-hours with temps in the teens. Lets also keep in mind Europe has low stockpiles of wheat and continues to export at a torrid pace; Australia's stock piles are low; Russia' stock piles are low; the world number one wheat buyer, Egypt's stockpiles are extremely low. Point is the air is right for a major explosion to the upside. I don't know if we will get the spark or lightning bolt that will start the fire, but I am telling you now, conditions are right for an "unforeseen" bullish move to higher ground. I advise being very cautious shorting this market in any type of major way, at least until current conditions clear. Why not be outright bullish then you ask? Find out more on the wheat market, get the daily Van Trump report by CLICKING HERE.

After this massive sell-off, is it time to buy GOLD?

Apr 16, 2013

 Gold prices yesterday suffered their sharpest fall since the 1980's, heightening fears among investors that the precious metal’s decade-long Bull Run has ended. Gold’s two-day drop (since Friday) was the sharpest two-day tumble since 1983, when the last gold bull market unraveled. Silver has also taken a major blow, losing more than 35% from the November highs. We have seen several large banks the past few weeks downgrading their recommendations on gold (Credit Suisse, SocGen, Goldman Sachs and more), but the straw that seems to have broken the camel’s back, is Cyprus’ decision to sell a portion of its gold reserves as part of their bail-out deal. This has dealt a sharp blow to the confidence of the gold bulls, arousing fears that other Eurozone countries, with much larger gold reserves, could soon be forced to follow suit. There is also some talk that with more stabilizing global economies Central Bankers may soon go back to practices of the past when they were net sellers of gold reserves. I am afraid the massive down stroke, now places the margin calls gods in control and further liquidation could be seen. Remember, many massive funds have been building and holding huge long gold positions the past few years. Liquidation could certainly cause further price deterioration. I thought my buddy Tom Grisafi (professional trader) said it best, "The markets most generally like to take the stairs when going higher, but tend to take the elevator when going lower..."  Bottom-line, those looking to add to their "physical" holdings may want to be patient. To follow my thoughts on any of the commodity markets please  CLICK HERE.
 .

 

How weather and planting could affect your marketing??

Apr 15, 2013

 Weather concerns continue to be the topic in the grain market. From everything I am hearing, it looks like we will remain wetter and cooler here in the US through April, then turn warmer and drier in early May and on into the critical stages of growth during June and July. One of the biggest questions obviously is in the Northwestern Corn Belt. Remember the USDA is looking for an extra 500,000 corn acres out of North Dakota this year. They are also looking for bigger numbers out of Minnesota. Unfortunately the forecasters are calling for more snow in many of these areas (over foot in some locations). Therefore you have to believe there will soon start to be talk and headlines circulating about corn seed cancelations.

The bears will try and argue that since there aren't many GGDU's during late April and early May (at least in the northwestern corn belt) the delays aren't really that big of a deal. What may be tougher for the bears to battle though is the fact producers in the Delta are now thinking corn acreage could be reduced by 500,000 plus. The word circulating is that some of the early planted acres in the South have failed to germinate. With many producers looking at an April 25th "final planting date" for crop insurance, I am starting to hear a lot more chatter about some producers simply taking "preventive plant." The point I am trying to make is that "near-term" we may see the market push higher as corn acreage to both the north and south are now being questioned. The key words there was "near term." Producers should continue using any rallies to reduce additional risk, and get hedges in place on any and all uninsured bushels.

To receive my daily news wire click the link below.  

Click Here

Why are Commodity Markets having a meltdown today?

Apr 15, 2013

Major commodity market meltdown this morning with Gold down almost $100 per ounce (at one point trading below $1,400); Silver down over $2.00 per ounce (trading below $23.00); Crude oil down almost $3.00 at one point (trading around $88.00), There are several reasons for the heavy liquidation but one of the biggest might be the Chine economic recovery NOT being as advertised. On Sunday night China's 1st Quarter GDP numbers showed growth of only 7.7%...the trade was looking for a number above 8.1%. This unexpected slowdown in China might have caused traders to rethink overall commodity demand. As for Gold liquidation, traders seem worried that with Cyprus selling their gold holdings to pay their bills, other European nations may soon be forced to follow suit. The outside markets will provide very strong headwinds! Grain traders will be waiting to see the latest USDA weekly wheat conditions report. I am thinking this number will be much worse than last week, so it will be hard for the market to reduce much grain risk-premium. My guess is once the weather shows a small window of opportunity for the planters to roll, the weather premium will quickly be removed... but until then I don't see any major push to the downside. For the entire story and what producers should be doing going forward,  CLICK HERE.

What is the real story on US corn demand?

Apr 14, 2013

The wild card moving forward (at least during the next few years) will obviously be Chinese "demand." In this last report the USDA bumped Chinese corn imports higher from 2.5 to 3.0 million metric tons. There is actually talk circulating once again in the industry that China might soon import double that number. There is no debating the fact China's demand for feed has exploded. Do you realize more than a quarter of ALL the meat produced worldwide is now eaten in China. In 1978, China’s meat consumption of 8 million tons was 1/3rd that of the US (who consumed about 24 million tons annually). But by 1992, China had overtaken the US as the world’s leading meat consumer—and they haven't looked back. This may be hard to believe but China’s annual meat consumption is now more than 71 million tons, basically double that of the United States.  As I am sure you are aware "pork" is China’s meat of choice, accounting for nearly three fourths (just over 52 million tons) of their total meat consumption. To give you a better idea of just how much pork they are consuming, here in the US we eat about 8 million tons. In order to meet this type of demand China has now become home to more than half of the world’s total number of pigs, over 475 million!!!  China has also just recently passed the US in total poultry consumption, now over 13.5 million tons annually. They are however still lagging in beef consumption. From what I am told China consumes about 6-million-tons of beef compared with 11 million tons here in the US. You might ask, why hasn't beef demand exploded as well in China?  From what I can gather they get a bigger bang for their buck out of the pork and poultry. Most estimates show cattle sitting in Chinese feedlots chew up about 7 pounds of grain for each pound of weight they gain. For pigs, the feeding ratio is 3 to 1, and for chickens it is 2 to 1. With 1/5th of the world’s population and limited land and water, China has had to rely heavily on the more-efficient forms of animal protein. Therefore less beef and more pork and poultry, the question now is how much more will China's demand for meat protein continue to grow? And at what pace will growth occur? You also have to ask yourself, even if Chinese corn imports surge to 6 or 7 million metric tons (a new record), how much will actually come from the US? Keep in mind the Chinese have invested a lot of money in agriculture in Argentina, Brazil, Ukraine, etc... We will no longer be their exclusive provider. I hope this helps give you a better idea of the questions being asked by the trade in regards to overall corn "demand."  If you would like to get a better understanding on the grain markets and read more of Kevin Van Trump's report, please  

CLICK HERE.

 

 

 


 

Soybean market road blocks??

Apr 12, 2013

 Soy traders are continuing to add premium to old-crop bull spreads (MAY13 vs. JUL13 closed at just over $0.34 cents yesterday). The concern is that Brazil still has 60-70 boats sitting and waiting on supplies. With wait times still running in excess of 30-45 days there is some renewed talk that "switchbacks" to more timely and reliable US exporters might be in the cards. Check out this video from the BBC News Network released yesterday "Congestion holds up export of record soybean crop from Brazil").

One kicker that continues to keep a lid on prices and possible a lid on increasing demand in China is the further spreading of the "bird flu" virus. We are now approaching 40 reported cases and double digit deaths being caused from the virus being spread by poultry. The concern is that the new virus "H7N9" is severe enough in most humans, that it could easily become transmissible, and ultimately turn into a deadly influenza pandemic. Up to this point the virus hasn't demonstrated the ability to be transmitted between humans, so an actual "pandemic" may be a bit of a stretch. However, as you can imagine, just the thought of the word "pandemic" is causing serious stress in China. Remember, they are still several months away from developing a vaccine. Unfortunately this is causing consumers to take extreme precautions, in return poultry and pork demand has plummeted. 

If you are interested in more of my research click the link below.  Thanks.

Click Here

Corn trader arguing about the "weather" ....imagine that!

Apr 12, 2013

The bears are proclaiming the "drought" is over, especially in the Eastern Corn Belt. They are also excited to see more beneficial rains in the Western Corn Belt. The bulls on the other hand continue to talk about delays in planting and the drought in Western Iowa, Nebraska and parts of Kansas. Just keep in mind thousands of corn acres in both Nebraska and Kansas are "irrigated." I should also point out that a lot more corn acres in Iowa and Illinois have gone under irrigation the past couple of years as well. Moral of the story, there really is no "weather story" in the corn market right now. Yes, planting is running behind last years rapid pace, but the rains and cooler temps in most areas have been welcomed. In the end I firmly believe US producers are going to show us just how quickly they can bang this corn in the ground.  

I have to believe the USDA's planting progress numbers released Monday after the close will show no more than 5% of the US crop being planted, with some states like Louisiana being almost 100% complete. Technically speaking the bulls are continuing to look for a breakout and or close above the $5.50 level in the DEC13 contract as a sign of higher new crop prices. On the other side, bearish technicians are looking for a close below the previous near-term low of $5.25^4 (set on April 1st) as a sing of further weakness.  Bottom-line the trade continues to discuss the possibility of a 2.0 to 2.5 billion bushel carryout next year. If this is actually the case then we are no where close to the bottom of this down-hill price slide.

Producers have to prepare, using the rallies to get caught up and further reducing risk. Click the link below to sign-up for my daily report and find out when I will be making my next corn sale.

Click Here

    

What should I do with the rest of my old crop?

Apr 11, 2013

In my opinion producers holding unprotected old-crop bushels are beginning to play with fire. The "basis" could continue to strengthen for a few more weeks as ethanol plants and sources in the poultry and pork industries bid up for supplies. My fear is that more corn imports eventually starts hitting US shores at about the same time ethanol plants start to wind down and shut the doors for planned maintenance.  Remember, a lot of ethanol executives have were talking about closing down the month before new-crop bushels became available. Basically electing NOT to bid up for the limited supply of old-crop corn that remained in circulation, My point is once the end-users can see the finish line is just around the next corner the bids for old-crop supplies may dry up much quicker than you had anticipated, especially if corn imports are also more readily available.
 
 To receive my daily report for free click the link below. 

CLICK HERE

Fuel prices continue to cause many analysts to scratch their head...

Apr 10, 2013

 Do realize this is the first time in 10-years that March gasoline prices have actually fallen. As of April 1st, the price of gas had fallen in 29 of the previous 33 days. On a national scale, gas prices are about $0.30 cents a gallon cheaper than last year at this time. AAA is now predicting the average price of gas in 2013 will actually be lower than 2012's average of $3.60 a gallon. What's a little concerning for "ethanol" is that Americans are driving less — about 2.7% less, according to Department of Transportation figures, or nearly 90 billion miles less after reaching a peak of more than 3 trillion miles back in November of 2007. In addition, older, less-fuel efficient cars are being replaced by new ones that get better gas mileage. Another reason for cheaper prices is that the US is actually producing a lot more crude oil here at home and refiners are finally starting to gain better access to the crude being produced up North. Look at it this way railroads her int he US hauled 233,800 carloads of crude in 2012, up from 65,800 in 2011 and just 29,600 in 2010. There is no question the availability of lower priced crude to refineries is going to help ease prices at the pump. 

To recieve my free daily report click the link below. Thanks

CLICK HERE

Potential Highlights of Today's USDA Report....

Apr 10, 2013

 Traders are obviously eager to see just how much higher the ending stocks for corn and soybeans are going to jump following the March 28th Quarterly Stocks Report. Just remember WASDE and NASS don't always see eye to eye. Meaning we may not see ending stocks jump nearly as high as many are anticipating. 

Let’s also keep our eye on the USDA's estimate for Chinese soybean imports. Currently they are estimating China will import 63 million metric tons. There is some talk this number could eventually be drastically reduced sub-60 million. I doubt we see anything like this in this report, but it wouldn't surprise me to see the USDA make a 1-2 million ton cut.
 
Wheat stocks here in the US seem as if they are also wanting to inch a little higher from the previous estimate of 716 million, closer to 730 million. I am doubtful we see many positive changes to the balance sheets, guessing exports stay the same. Talk is for less "feed and residual." I am not so sure this happens. Therefore I continue to stick with my current belief that today's report could actually be more bullish than many are thinking sub-730 million.
 
South American production will also be a main focal point. I am currently hearing a lot of mixed estimates so it should be interesting to see it play out. The trade seems to be thinking Brazilian soybean estimates are too high...I thinking this number is too high as well. Personally I believe we may eventually see the number pull back closer to 82 million metric tons. Brazilian corn estimates are another story, with most in the trade thinking they push even higher. I am not so sure, as I continue to point it will all come down the late rains in April and May. Hence my hunch is the USDA leaves their estimate "unchanged." Argentine corn production estimates are expected to move lower. I am not sure they will cut it by that much, but I do expect a number south of 26 million. Argentine soybean production estimates are also expected to be coming down. Personally I am looking for a number closer to or even below 50 million metric tons.
 
Global grain stocks will also be reported. Most in the trade thinking wheat stocks will remain virtually "unchanged;" global corn stocks push higher; global soybean stock pushing a little lower.
 
Be sure to catch my full break down of the USDA report by signing up for my free daily email wire.  
 

What should we expect with tomorrows USDA report?

Apr 09, 2013

 Traders are obviously eager to see just how much higher the ending stocks for corn and soybeans are going to jump following the March 28th Quarterly Stocks Report. Just remember WASDE and NASS don't always see eye to eye. Meaning we may not see ending stocks jump nearly as high as many are anticipating. 

 
Let’s also keep our eye on the USDA's estimate for Chinese soybean imports. Currently they are estimating China will import 63 million metric tons. There is some talk this number could eventually be drastically reduced sub-60 million. I doubt we see anything like this in this report, but it wouldn't surprise me to see the USDA make a 1-2 million ton cut.
 
Wheat stocks here in the US seem as if they are also wanting to inch a little higher from the previous estimate of 716 million, closer to 730 million. I am doubtful we see many positive changes to the balance sheets, guessing exports stay the same. Talk is for less "feed and residual." I am not so sure this happens. Therefore I continue to stick with my current belief that tomorrow’s report could actually be more bullish than many are thinking sub-730 million.
 
South American production will also be a main focal point. I am currently hearing a lot of mixed estimates so it should be interesting to see it play out. The trade seems to be thinking Brazilian soybean estimates are too high...I thinking this number is too high as well. Personally I believe we may eventually see the number pull back closer to 82 million metric tons. Brazilian corn estimates are another story, with most in the trade thinking they push even higher. I am not so sure, as I continue to point it will all come down the late rains in April and May. Hence my hunch is the USDA leaves their estimate "unchanged." Argentine corn production estimates are expected to move lower. I am not sure they will cut it by that much, but I do expect a number south of 26 million. Argentine soybean production estimates are also expected to be coming down. Personally I am looking for a number closer to or even below 50 million metric tons.
 
Global grain stocks will also be reported. Most in the trade thinking wheat stocks will remain virtually "unchanged;" global corn stocks push higher; global soybean stock pushing a little lower. For my summary and for information on which way I am leaning going into the report click the link below and I will send it right to you.
 

For the rest of the story including more insight into what traders believe are influencing market prices currently, sign-up here to receive a RISK-FREE 30-Day trial of my daily Grain and Livestock commentary. 

Van Trump Report


 

 

What corn traders are expecting this week from the USDA...

Apr 08, 2013

 Corn ending stocks will be the focus this week, as traders prepare for another dose of USDA estimates. From what I can gather most in the trade seem to be thinking the USDA will bump their old-crop ending stocks estimate from 632 million to just over 835 million bushels. Several sources in the trade are thinking the number will eventually be much higher, maybe 900 million bushels plus. Obviously more plentiful supplies will make it tough for the bulls to add to their position. Keep in mind this reaction is coming on the heels of the USDA surprising the trade less than two-weeks ago in the "Quarterly Stocks Report."  Corn traders will also be waiting to see what the USDA has to say about South American production. Remember the April and May rains will do a lot to determine the overall yields of the large second crop planted in Brazil. I thought it was interesting to hear talk out of Brazil this weekend that they are thinking about importing corn from Argentina to their most Northeast regions who have been hit hard by the recent drought. The rumor is there are not many alternatives, especially since the freight truck companies aren't interested in carrying corn to this region with all of the soybean and sugar business in full-swing.

For more information click the link below to recieve my free daily report and find out what the next curveball the USDA will throw your way.

CLICK HERE

What does Brazil corn imports from Argentina say about their corn crop?

Apr 08, 2013

Corn traders will also be waiting to see what the USDA has to say about South American production. Remember the April and May rains will do a lot to determine the overall yields of the large second crop planted in Brazil. I thought it was interesting to hear talk out of Brazil this weekend that they are thinking about importing corn from Argentina to their most Northeast regions who have been hit hard by the recent drought. The rumor is there are not many alternatives, especially since the freight truck companies aren't interested in carrying corn to this region with all of the soybean and sugar business in full-swing. 

 

For the rest of the story including more insight into what traders believe are influencing market prices currently, sign-up here to receive a RISK-FREE 30-Day trial of my daily Grain and Livestock commentary. So many advisors want to tell you exactly how to market your crop, I want to teach you to better understand the markets and how you should respond.  If you are looking to be educated and not just told what to do, simply click here and get started!

Van Trump Report


 

How the USDA could have found 400 million bushels of corn....

Apr 07, 2013

This seems to be the question of the year so far in the corn market and one that many in the trade seem to be asking themselves. Below are a few of the more thought out responses I have heard on what may have actually taken place:

 

  • A "production" error was made following harvest as the national yield estimate was simply too low. Thoughts are producers in Minnesota, the Dakotas and other areas to the north may have actually had much better yields late in the season than what the USDA had estimated. 
  • This is the first time EVER in the March Quarterly Stocks Report that "Off Farm" stocks were larger than "On Farm" stocks. This generally never happens until the June report. Thoughts are the farmers (who now have more storage than ever) were not accurately reporting the number of bushels they had in storage. Once more of the corn was moved to the commercials, the accuracy and participation rate of the "voluntary surveys" greatly increased, and the USDA followed by making the appropriate adjustments. 
    • It is reported that the USDA surveys about 9,000 commercial entities (ethanol plants, mills, elevators, etc...) and receives around an 85-90% response rate form this group. On the flip side there are about 80,000 farmers surveyed and I would have to believe both the accuracy and the response rate are much lower. Hence when more corn is moved into the commercials hands the USDA is able to get a better assessment of total supply. This may have been some contributing factor. 
  • There is talk a mistake could have been made in regards to corn "in transit." Meaning the USDA didn't have a good handle on what was being transported or moved. Remember the Mississippi river was having some serious problems around this time frame, and perhaps more grain was stuck on the river or "in transit" than many had estimated.    
  • A mistake was made by adjusting the "feed usage" numbers higher back in the March report. There may have been more feed alternatives being used than recognized. Most believe this "feed usage" number will need to be reversed, the question is by how much, 200 million, 250 million, 300 million???

 

Corn traders will also be waiting to see what the USDA has to say about South American production. Remember the April and May rains will do a lot to determine the overall yields of the large second crop planted in Brazil. I thought it was interesting to hear talk out of Brazil this weekend that they are thinking about importing corn from Argentina to their most Northeast regions who have been hit hard by the recent drought. The rumor is there are not many alternatives, especially since the freight truck companies aren't interested in carrying corn to this region with all of the soybean and sugar business in full-swing.

If you have not already you need to check out my free daily reports by clicking the link below.

Click Here

 

 

 

 

 

Grain and Soy "re ownership" A fools play?

Apr 06, 2013

Grain and soy traders have been asking me about "re-ownership" on the recent breaks. Personally I believe this is a fool’s play. In my opinion rallies should be used exclusively as an opportunity to reduce further risk, build a better floor or hedge more of your estimated production. I could go back several months when I first talked about a "MAJOR" storm brewing on the horizon. I told subscribers to make plans, build a floor and prepare for a possible massive price storm. Now all of a sudden with the storm in full-swing and upon our doorstep producers and traders are scrambling. What I find amazing is the fact there are still people out there who do not recognize the high winds and dark clouds moving in overhead??? I could continue, but I think you get the drift...it is raining "negative headlines" outside and the bearish winds are really starting to blow. Throw on top the outside market headwinds...and I am thinking you have to be somewhat oblivious to what is taking place if you are looking to step out of the comfort of your hedges or strategies to re-own in the face of more downward pressure. Understand the US dollar is posting highs not seen in months; North Korea is about to go to war with South Korea; tensions in the Middle East (with Iran in particular) are still extremely concerning; Europe remains on the brink of economic hardship, and money flow continues to pour into US equities.. NOT commodities! Technically speaking, the grain and so markets have been in a downhill sideways channel since late 2012. My point is the "bulls" are not only swimming upstream into bearish fundamental "supply and demand" data, but they are also swimming into bearish technical chart formations, and bearish outside macro market influences. Rallies will certainly take place as traders listen to short-term supply side concerns and weather related glitches. These rallies though need to be closely monitored and used to reduce more risk! 

For the rest of the story including more insight into what traders believe are influencing market prices currently, sign-up here to receive a RISK-FREE 30-Day trial of my daily Grain and Livestock commentary. So many advisors want to tell you exactly how to market your crop, I want to teach you to better understand the markets and how you should respond.  If you are looking to be educated and not just told what to do, simply click here and get started!

Van Trump Report


China may have bought 1 million tons of US SRW wheat...

Apr 05, 2013

 Wheat traders have been talking about the fact China may have bought between 500,000 and 1 million tons of US SRW wheat for summer delivery. The word is they are trying to bump up domestic reserves. The question is will China continue buying US corn or will they soon start looking for other alternatives? Some speculate they will simply wait on their own domestic harvest before becoming bigger buyers. In the end even though domestic Chinese wheat prices are trading higher than corn, I don't see this being enough at this time to sustain any type of longer-term rally. Certainly keep your eye on China, but don't get overly excited just yet....  

To view my daily comments for 30 days just click the link below.  

Click Here

"Bird Flu" outbreak pressuring soybean price

Apr 04, 2013

 Soybean traders are somewhat confused by the recent "bird flu" outbreak in China. The latest word on the street is that the H7N9 virus has actually mutated and it can now spread more easily to other animals. Talk is the virus can somehow move through poultry without making them sick. This has the trade extremely nervous, as does the term "pandemic," which is starting to be thrown around a little in the headlines. The soybean bulls are worried that if something happens to the hog herd there will certainly be less demand for soymeal and other feed stock. Pigs are a particular concern because bird and human flu viruses can mingle there, similar to what happened in 2009 with the "swine flu." There is also some concern as the Chinese consumers ease back their pork and poultry demand. Technically I have to believe near-term the NOV13 contract will test support at the July low of $12.25^2.

 I am confident once the "bird flu" headlines subside, and or we start to see more renewed soy buying interest out of China, prices will actually rebound for a brief period. Producers who need to get more bushels priced need to be looking for this window of opportunity...it might be one of the last in new-crop for several weeks.

To hear more about the issues surrounding soybeans sign up for my free daily report by clicking below.  

CLICK HERE

Will Soybean demand pick back up in the near future?

Apr 03, 2013

 Soy traders continue to talk about tight US supplies and the fact Brazilian export shipments are still running below last years pace. March estimates show Brazil only exporting 5.1 million tons, 200,000 short of what they shipped last March. Brazil's soymeal shipments are extremely poor.  Some now estimating close to 40% below last years pace for the first few months. Point is Brazil continues to struggle with soy exports, continually falling below expectations. The bears will argue that the situation in Brazil is starting to improve and that they could actually export a new record amount during the month of April (possible 5.5 to 6.0 million tons).

The bears are also talking about the fact China is importing fewer soybeans. Which is actually correct when comparing the data from last year. Last March between Brazil and the US we shipped China around 4.9 million tons of beans, this year it was closer to 4.2 million tons. Bottom-line Chinese demand continues to fall further behind the USDA's 63MMT estimate. Not saying Chinese demand won't soon pick-up, but as of right now it has some serious catching up to do. The market is concerned about more South American supplies coming online, record US soybean acres being planted, and the thought that Chinese soybean demand may NOT be increasing as fast as many had anticipated. Keep in mind Chinese pork demand is wavering right now in China, with the mystery pig deaths, in return hog margins remain negative and meal demand is soft. Net-net, not a real pretty picture for new-crop soy on the horizon.

I will be making moves to price and/or hedged ASAP.  Click the link below to follow my report and find out what I will be doing. Thanks

CLICK HERE

 

 

The "Butterfly effect" is in full-play!

Apr 03, 2013

 With so many moving parts now in place across the world, the "Butterfly effect" is in full-play. One tiny mishap by just one country and its monetary or military leaders and it could now cause major problems across the entire globe. Keep your eye on the military conflicts in North and South Korea, they may be the "Butterfly." For those who don't fully understand the inference please read the following explanation:

 
In chaos theory, the "butterfly effect" is the sensitive dependence on initial conditions, where a small change at one place in a deterministic nonlinear system can result in large differences to a later state. The name of the effect, coined by Edward Lorenz, is derived from the theoretical example of a hurricane's formation being contingent on whether or not a distant butterfly had flapped its wings several weeks before. The phrase refers to the idea that a butterfly's wings might create tiny changes in the atmosphere that may ultimately alter the path of a hurricane or delay, accelerate or even prevent the occurrence of a hurricane in another location. Note that the butterfly does not have the power or can directly create the hurricane. The flap of the wings is a part of the initial conditions; one set of conditions leads to a hurricane while the other set of conditions doesn't. The flapping wing represents a small change in the initial condition of the system, which causes a chain of events leading to large-scale alterations of events (compare: domino effect). Had the butterfly not flapped its wings, the trajectory of the system might have been vastly different - it's possible that the set of conditions without the butterfly flapping its wings is the set that leads to a tornado.
 
Big week for Macro traders as global economic data is plentiful. We have the Bank of Japan releasing their latest monetary policy on Thursday. On the same day we also have the latest monetary policy decisions being released by the European Central Bank. Then on Friday we have the highly anticipated monthly US jobs report.
 
To find out what our thoughts are on where we go from here, click on the link below.
 

For the rest of the story including more insight into what traders believe are influencing market prices currently, sign-up here to receive a RISK-FREE 30-Day trial of my daily Grain and Livestock commentary. So many advisors want to tell you exactly how to market your crop, I want to teach you to better understand the markets and how you should respond.  If you are looking to be educated and not just told what to do, simply click here and get started!

Van Trump Report


 

"Hold on to your hat," we are still in extremely rough waters.

Apr 02, 2013

Like I have been saying, and most are in agreement, the USDA must have simply underestimated last year’s crop.  Many in the trade continue to talk about how corn ending stocks could jump from 632 million to over 950 million bushels by the time all of the smoke clears and dust settles. My guess is there will be 250-350 million fewer bushels of corn used for feed; fewer bushels of US corn exported; and certainly more corn imported (rumors of 8-10 Argentine cargoes already purchased). Net result...much higher old-crop ending stock number coming down the pipe. I should point out, it is not just old-crop supplies that are growing, but you now have to believe new-crop ending stocks could be push closer to 2.0 to 2.5 billion bushels.  We should quickly learn more in the upcoming April 10th USDA crop report, my suggestion, "hold onto your hat," we are still in extremely rough waters.

For the rest of the story including more insight into what traders believe are influencing market prices currently, sign-up here to receive a RISK-FREE 30-Day trial of my daily Grain and Livestock commentary. So many advisors want to tell you exactly how to market your crop, I want to teach you to better understand the markets and how you should respond.  If you are looking to be educated and not just told what to do, simply click here and get started!

Van Trump Report


As with all markets, "fundamentals" will eventually win out!!

Apr 02, 2013

 "FUNDAMENTALLY" we should NOT be trading at these levels, BUT WE ARE!!!  As with all markets, "fundamentals" will eventually win out... but "WHEN" is the question??? Conventional wisdom and fundamental reasoning have cost many investors millions as they have been trying to short the US Stock and Bond markets the past several years. With the monetary base per dollar of nominal GDP at record highs, and the federal deficit as a percentage of GDP trading at extremes... "FUNDAMENTALLY" we should NOT be trading at these levels, BUT WE ARE!!!  Similarly in the Ag markets, "money-flow" is responding much differently now than in years past. Traditional supply and demand wisdom doesn't always win out immediately and the markets interpretation doesn't always make sense. Point is, be careful beating on what appears to be a "sure thing." Yes, the recent USDA numbers will make it harder for prices on the board to rally, but lack of "REAL" supply may ultimately tell a different story. Remember, as producers we are trying to be the best "Risk Managers" we can be. Leave predicting overall market direction to those who prefer to gamble. Continue mitigating risk and you will have a successful operation!

 

For the rest of the story including more insight into what traders believe are influencing market prices currently, sign-up here to receive a RISK-FREE 30-Day trial of my daily Grain and Livestock commentary. So many advisors want to tell you exactly how to market your crop, I want to teach you to better understand the markets and how you should respond.  If you are looking to be educated and not just told what to do, simply click here and get started!

Van Trump Report

 

 


They say wet weather in China's Northeast region reduced their overall corn “quality."

Apr 01, 2013

 Bulls will want to argue that Chinese corn demand is poised to push dramatically higher, as insiders don’t think there’ll be enough good "quality" corn to meet feed-mill demand by the late summer months. The talk is wet weather in China's northeast region reduced their overall "quality." Heavy snow this winter increased moisture content and reduced density, making the grain more susceptible to mold and less suitable for feeding animals (Bloomberg). This in turn might induce more of a national shortage of good quality corn in the months ahead for China. Even though I don't doubt the fact China will be importing more corn, I question how much will actually be sourced from the US. Remember, Argentine corn is already begin offered at close to $1.50 cheaper than US new-crop corn. Let’s also not forget Brazil and Ukraine corn is being offered much cheaper as well. Also keep in mind China just invested a large sum of money in a partnership with Ukraine Ag leaders. Moral of the story, yes, China maybe in the market for more new-crop corn moving forward, but the question remains, how much will sourced from US providers? Click here and fill out the information for my report, I will send it directly to you.

Did the USDA Understate Production and or Imports?

Apr 01, 2013

 Corn bulls are reeling from the biggest single day price move "LOWER" since last May, as the USDA estimates close to 400 million more bushels then the trade was anticipating in the "Quarterly Stocks Report." The question is did the USDA understate production and or imports? or have they overstated feed usage, exports and corn used for ethanol? My guess is some slight combination of ALL the above, but more than likely they are going to say they UNDER-ESTIMATED last years production. Several sources have been saying for months the USDA under-estimated the late corn production out of Minnesota and North Dakota this past year. Regardless this was definitely a "BEARISH" report and the trade will quickly being trying to readjust. You have to believe one of the first steps will be to realign the "spreads," meaning the bull-spreads could seriously get pounded in the days ahead. The only good news is, as the bull spreads are unwound, it should help to keep the back-end of the trade somewhat supported, giving producers another opportunity to reduce risk and lock in some type of profit. Where do we go from here??? Click here now and fill out the basic information, I will let you know where we see old crop and new crop corn going as well as some specific numbers on the May-Dec and Dec-July Spreads.

 For the rest of the story including more insight into what traders believe are influencing market prices currently, sign-up here to receive a RISK-FREE 30-Day trial of my daily Grain and Livestock commentary. So many advisors want to tell you exactly how to market your crop, I want to teach you to better understand the markets and how you should respond.  If you are looking to be educated and not just told what to do, simply click here and get started!

Van Trump Report


Log In or Sign Up to comment

COMMENTS

Receive the latest news, information and commentary customized for you. Sign up to receive Dairy Today's eUpdate today!

 
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions