Sep 2, 2014
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Hedging Corn and Soybeans

RSS By: Howard Tyllas, AgWeb.com

Howard Tyllas is currently a member of the Chicago Board of Trade and registered with the Commodity Futures Trading Commission as a floor broker and as a Commodity Trading Advisor.

WASDE Report for 8/12/14

Aug 12, 2014

 WASDE Report for 8/12/14

 

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Attention Corn & Soybean Producers:

 

Feel free to inquire on learning about the best way to hedge. In my opinion my strategy is the best I have seen since I became a member in 1976 trading corn and soybeans for my own account.

 


Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 40 years. 

 

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 OILSEEDS:  U.S. oilseed production for 2014/15 is projected at 113.7 million tons, up 0.6 million from last month mainly due to a higher soybean production forecast.  Soybean production for 2014/15 is forecast at 3,816 million bushels, up 16 million due to a higher yield.  Harvested area is forecast at 84.1 million acres, unchanged from July.  The first survey-based soybean yield forecast is a record 45.4 bushels per acre, 0.2 bushels above last month and 2.1 bushels above last year.  Soybean supplies for 2014/15 are projected slightly above last month based on the higher production forecast.  With minimal supply gains, soybean exports and crush are unchanged, leaving ending stocks projected at 430 million bushels.

The U.S. season-average soybean price for 2014/15 is forecast at $9.35 to $11.35 per bushel, down 15 cents on both ends.  Soybean meal and oil prices are forecast at $340 to $380, down 10 dollars at the midpoint.  Soybean oil prices are forecast at 35 to 39 cents per pound, down 1 cent at the midpoint.

U.S. soybean balance sheet changes for 2013/14 include reduced imports and increased exports.  Imports are lowered 5 million bushels to 80 million based in part on revised import data for September – December 2013 from the U.S. Department of Commerce.  Exports are raised 20 million bushels to 1,640 million reflecting both revised export data for September through December 2013 from the Department of Commerce and inspections data for July 2014.  These changes are offset with lower residual use, leaving ending stocks unchanged at 140 million bushels.  With these changes, the 2013/14 soybean stocks-to-use ratio is projected at 4.2 percent, which if realized would be the lowest in more than 40 years.

Global oilseed production for 2014/15 is projected at 521.8 million tons, slightly below last month.  Gains for rapeseed and cottonseed are more than offset by reductions for soybeans, sunflowerseed, and peanuts.  Higher soybean production for the United States is offset by a reduction for India where the delayed monsoon results in lower planted area.  Rapeseed production is raised for China, EU, and Ukraine.  These gains are partly offset by a smaller crop projected for Canada with lower area resulting from flooding in parts of Saskatchewan and Manitoba.  Other changes include lower sunflowerseed production for Russia, reduced peanut production for China, and increased cottonseed production for India.

WHEAT:  Projected U.S. wheat supplies for 2014/15 are raised this month mostly with an increase in forecast Hard Red Winter (HRW) wheat production as well as smaller increases for Soft Red Winter (SRW), Hard Red Spring (HRS), and Durum.  Northern parts of the HRW belt have substantially higher yields than the drought damaged southern and central plains.  The largest HRW increases are in Colorado and Nebraska.  After a delay in planting, HRS wheat has had very good growing conditions and yields are forecast well above average.  Feed and residual use for all wheat in 2014/15 is raised 10 million bushels to 155 million due to the larger supplies.  All wheat exports for 2014/15 are increased 25 million bushels because of the larger HRW crop.  The projected season-average farm price range is lowered 30 cents at the midpoint to $5.80 to $6.80 per bushel. 

World wheat production for 2014/15 is raised 10.9 million tons to a record 716.1 million.  The largest foreign increases are 6.0 million tons for Russia, 2.0 million tons for China, and 1.0 million tons for Ukraine.  The Russia and Ukraine increases are based on harvest reports that indicate very high winter wheat yields, especially for Russia.  The China increase reflects the latest government estimates for summer harvested grains.  Production is also raised 0.6 million tons for Belarus and 0.4 million tons for Moldova. 

Global wheat consumption is raised 6.9 million tons due mainly to increased prospects for wheat feeding.  The biggest feeding increase is for EU, which is raised 2.5 million tons.  Excessive harvest-time precipitation in several European production regions has increased the quantity of feed-quality wheat.  Russia wheat feeding is raised 1.0 million tons, and Ukraine and Belarus are each raised 0.5 million tons due to increased production in those countries.  Smaller feeding increases are made for Philippines, Moldova, and Israel. 

Global wheat trade for 2014/15 is nearly unchanged with increases in Russia and the United States offset by reductions in EU and several other countries.  The changes reflect larger crops in Russia and the United States as well as quality problems in EU.  India exports are lowered 0.5 million tons because of competition, especially from lower quality wheat in Ukraine and southeastern EU.  China and Russia imports are lowered 1.0 million tons and 0.5 million tons, respectively, because of increased production.  Egypt imports are lowered 0.5 million tons due to changes in its bread subsidy program that are expected to reduce waste.  Iran imports are raised 0.5 million tons reflecting government announced purchases.  With supplies rising faster than use, global ending stocks are raised 3.4 million tons and remain at a 3-year high.

COARSE GRAINS:  Projected 2014/15 U.S. feed grain supplies are raised this month with higher production forecasts for corn, sorghum, barley, and oats.  Corn production for 2014/15 is forecast 172 million bushels higher at a record 14,032 million bushels.  The first survey-based corn yield forecast, at a record 167.4 bushels per acre, is up 2.1 bushels from last month’s trend-based projection.  Sorghum production is forecast 19 million bushels higher with the forecast yield 3.0 bushels per acre higher than last month’s projection.  Small yield increases also boost barley and oats production slightly.

Corn supplies for 2014/15 are projected at a record 15,243 million bushels with the increase in production partly offset by a 65-million-bushel reduction in beginning stocks.  Corn use for ethanol and exports are raised 45 million bushels and 20 million bushels, respectively, for 2013/14, based on reported data to date.  Projected corn use for 2014/15 is higher with use for ethanol and exports each raised 25 million bushels, and feed and residual disappearance 50 million bushels higher with the larger crop.  Projected ending stocks for 2014/15 are raised slightly to 1,808 million bushels.  The projected season-average farm price for corn is lowered 10 cents at both ends of the range to $3.55 to $4.25 per bushel.

Sorghum supplies for 2014/15 are projected 4 million bushels higher as a 15-million-bushel increase in 2013/14 exports lowers 2014/15 beginning stocks, mostly offsetting the higher forecast production.  Projected sorghum exports for 2014/15 are raised 10 million bushels.  The season-average farm price for sorghum is also projected 10 cents lower at both ends of the range to $3.30 to $4.00 per bushel.

Global coarse grain supplies for 2014/15 are projected 4.9 million tons higher, mostly reflecting larger expected corn crops in the United States and EU and increased barley production for FSU-12.  The smaller projected carryin for the United States partly offsets this month’s 6.6-million-ton increase in global coarse grain output.  EU corn production is raised 1.4 million tons after abundant rainfall and favorable temperatures during July.  FSU-12 barley production is raised 3.1 million tons with a 2.0-million-ton increase for Russia and smaller increases for Belarus and Ukraine.  Barley production is also raised 0.3 million tons for EU.  Reduced prospects for corn, sorghum, and millet, with the delayed monsoon, lower India total coarse grain production 2.7 million tons, partly offsetting increases elsewhere.  Turkey corn production is also lowered 0.3 million tons.

Global coarse grain consumption for 2014/15 is raised this month with a 2.3-million-ton increase in world corn use.  Higher corn use in the United States accounts for most of the increase.  Corn consumption is lowered 2.0 million tons for EU as heavy summer rains have reduced wheat quality across the region, raising prospects for wheat feeding.  Corn food use is reduced 0.5 million tons for India with the smaller crop outlook.  Higher projected corn use for Egypt, Saudi Arabia, South Africa, Algeria, and Taiwan partly offset these reductions.  Corn imports are lowered for EU, but raised for Turkey, Saudi Arabia, Taiwan, Lebanon, and Algeria.  Global barley trade is raised with higher imports for Turkey and higher exports for Russia and Ukraine.  Global 2014/15 coarse grain ending stocks are projected 2.7 million tons higher reflecting larger barley ending stocks.  Global corn ending stocks are lowered slightly.


SUGAR:  The Mexico 2013/14 estimate for sugar production is reduced by 5,000 metric tons (MT) to 6.020 million, based on end-of-harvest reporting from Mexican authorities.  The 2013/14 estimate of exports is increased by 50,000 MT based on pace-to-date of exports to the United States.  Deliveries for consumption are reduced by 106,000 MT, based on a slowdown in the pace through June.  With 2014/15 beginning stocks 51,000 MT higher than last month, imports in 2014/15 are reduced by that same amount to meet consumption needs until the full start of the 2014/15 harvest in mid-December.  There are no changes to 2014/15 production, deliveries, total exports, or ending stocks.  Exports to the United States are reduced by 575,000 MT based on signed contracts confirmed by the USDA committing Mexico to ship to non-U.S. destinations in that amount in 2014/15.

 

The U.S. 2013/14 cane sugar production is lowered by 25,000 short tons, raw value (STRV) based on a slow harvest pace in Hawaii.  Tariff-rate quota (TRQ) shortfall for 2013/14 is increased by 87,547 STRV and 2013/14 imports from Mexico are increased by 58,423 for a net import reduction of 29,000.  For 2014/15, beginning stocks are reduced 54,000 STRV, cane sugar production is increased by 116,000 based on processors’ reporting, and imports from Mexico are reduced by 672,000 to 1.205 million.  With no other changes, ending stocks are projected at 837,000 STRV.

LIVESTOCK, POULTRY, AND DAIRY:  The forecast for total meat production in 2014 is raised from last month.  Production is raised for beef, pork, and broilers as lower feed prices encourage producers to raise animals to heavier weights.  Turkey production is reduced slightly based on June production data.  Egg production is reduced based on lower expected hatching egg production.  For 2015, lower feed costs are expected to lead to higher cattle, hog, and broiler weights, but in the case of beef, reduced feedlot numbers are expected to lead to lower slaughter, more than offsetting any gains from carcass weights.  Broiler producers are also expected to increase bird numbers more rapidly than previously forecast during 2015 as returns are expected to be more favorable.  Egg production forecasts are unchanged.

Forecasts for 2014 and 2015 beef imports are raised as demand for processing grade beef remains strong.  Exports for 2014 and 2015 are raised as demand in a number of countries remains strong, despite high beef prices.  Pork imports for 2014 and 2015 are raised slightly.  Despite the closure of Russia to U.S. exports into 2015, pork export forecasts for 2014 and 2015 are raised as demand in other major markets is expected to grow.  Broiler exports are reduced for 2014 and 2015 as Russia’s import ban will affect sales.  Turkey export forecasts are raised for 2014, but are unchanged for 2015.  

Cattle price forecasts for 2014 and 2015 are raised from last month on the strength of demand and continued tight supplies of fed cattle.  The annual price forecast for hogs is unchanged for 2014, but is lowered for 2015 from last month on slightly weaker expected demand.  The annual broiler price forecast for 2014 is lowered, but the price for 2015 is unchanged.  The turkey price forecast for 2014 is raised based on July price data.  The egg price forecasts for both 2014 and 2015 are raised as demand remains strong. 

The milk production forecasts for 2014 and 2015 are raised slightly as lower feed costs are expected to support higher output per cow.  Fat basis export forecasts for 2014 and 2015 are lowered as Russia’s ban on imports from a number of dairy exporting countries will likely increase competition in export markets.  Fat basis imports are raised as supplies in competing exporters are expected to be large.  The skim-solids export forecast is raised slightly for 2014, but is reduced in 2015 as competition increases.  Skim-solids imports are unchanged from last month.

Butter prices and whey price forecasts are raised for 2014 with strength in butter prices expected to carry into 2015.  Cheese prices and nonfat dry milk prices are forecast higher in 2014, but their price forecasts for 2015 are unchanged from last month.  Class III and Class IV prices for 2014 are raised on stronger component product prices and the Class III price forecast for 2015 is raised reflecting strength in whey prices.  The all milk price is raised to $23.55 to $23.75 per cwt for 2014, but remains unchanged at $19.75 to $20.75 per cwt for 2015.

COTTON:  The U.S. 2014/15 cotton forecasts include higher production, exports, and ending stocks compared with last month.  Beginning stocks are reduced 100,000 bales due to preliminary stocks indications for July 31, 2014.  Production is raised 6 percent to 17.5 million bales in the first survey-based estimate of U.S. crop production, mainly on lower expected abandonment.  Domestic mill use is unchanged, but exports are raised 500,000 bales to 10.7 million on stronger foreign import demand and the larger available supply.  Ending stocks are now forecast at 5.6 million bales, 39 percent of total use, the largest stocks-to-use ratio since 2007/08.  The forecast range for the marketing-year average price received by producers of 58-72 cents per pound is lowered on both ends, with the midpoint now forecast at 65 cents.

Revisions to the 2014/15 world cotton supply and demand balance sheet result in marginally lower global ending stocks compared with last month’s forecast.  Beginning stocks are reduced 600,000 bales due to adjustments in 2013/14 for several countries.  For 2014/15, production is raised for the United States, India, and Mexico, but lowered for Brazil and Australia.  World consumption is raised about 1 percent from last month to 112.6 million bales, the highest level since 2010/11, as falling prices are anticipated to boost cotton’s share of textile fiber use.  Ending stocks are now projected at 105.1 million bales, with stocks outside of China expected to grow by about 4 million bales from 2013/14.  

RICE:  U.S. 2014/15 total rice supplies are projected at 282.6 million cwt, up 2.8 million from last month on higher production.  USDA's first survey-based forecast of the U.S. 2014/15 rice crop is 228.8 million cwt, up nearly 21 percent from the previous year.  Average all rice yield is forecast at 7,560 pounds per acre, up 91 pounds per acre from last month’s projection, but down nearly 2 percent from last year’s record.  Area harvested is unchanged at 3.03 million acres.  Long-grain production is forecast at 169.3 million cwt and combined medium- and short-grain production at 59.5 million, up 0.3 million and 2.5 million from a month ago, respectively.  The all rice import projection is 21.0 million cwt, down 9 percent from last year.

U.S. 2014/15 total rice use is projected at 243.0 million cwt, 3.0 million above last month, and 12 percent above the previous year.  Total domestic and residual use and exports are forecast at 134.0 million cwt and 109.0 million, up 1.0 million and 2.0 million, respectively.  Long-grain and combined medium- and short-grain exports are projected at 75.0 million and 34.0 million, respectively.  U.S. all rice ending stocks for 2014/15 are projected at 39.6 million cwt, down 0.2 million from last month, but 21 percent above the previous year. 

The 2014/15 U.S. long-grain rice season-average farm price is projected at $12.00 to $13.00 per cwt, unchanged from last month.  The 2014/15 combined medium- and short-grain price is projected at $17.50 to $18.50 per cwt, up 50 cents per cwt from a month ago.  The 2014/15 all rice price is projected at $13.80 to $14.80 per cwt, up 30 cents per cwt on each end of the range from last month.

The projected decrease in global 2014/15 total supply is greater than the drop in total use resulting in a decrease in world ending stocks.  Global production is lowered 2.1 million tons to 477.3 million, still a record, due primarily to forecast reductions for Bangladesh, Brazil, Indonesia, and India, offset partially by an increase in the United States.  India’s 2014/15 rice crop is lowered 1.0 million tons to 103.0 million, attributed mostly to a slower rate of planting of the kharif rice crop due to the late start of the monsoon and below normal precipitation in some rice growing areas.  Global beginning stocks for 2014/15 are lowered 1.4 million tons due mostly to a 1.3-million-ton reduction for Indonesia—where the 2013/14 crop is lowered to 36.0 million tons.  World 2014/15 consumption is reduced 0.3 million tons to 482.1 million, still a record.  Global trade is lowered 0.3 million tons due mostly to a reduction in exports from India, partially offset by an increase in the United States.  Global 2014/15 ending stocks are projected at 105.4 million tons, down 3.2 million from last month, and a decline of 4.7 million from the previous year.  The largest stocks reductions from a month ago are in Bangladesh, Brazil, Indonesia, and India. 


 


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Hedging November Soybean and Commentary for 8/11/14

Aug 12, 2014

 

 

Sign up: Learn a better way to hedge for free

 
Attention Corn & Soybean Producers:

Feel free to inquire on learning about the best way to hedge. In my opinion my strategy is the best I have seen since I became a member in 1976 trading corn and soybeans for my own account.


Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 40 years. 

Sign up: Free 1 Day Trail of My Daily Numbers & Hedge Ideas 

 These numbers were sent on 8/8/14 at 3.00 pm to be used for trading on Monday 8/11/14.

 November Soybeans

 Use the same numbers as used on 8/7 & 8/14
                    
10.98 ¼         
10.94 
--------------10.82    Pivot  
10.70                                           
10.59 ½                                        
5 day chart...         Up from last week same day                                                                            
Daily chart   ….     Down   
Weekly chart …   Down   
Monthly chart ….Down                  11.66 is the 200 DMA
ATR 20 ¾                                                 Balanced 48%

 

 

For 8/11/14: I continue to say "10.88 ¼ bracket line is pivotal on Monday, 2014 low at $10.54 is support.   

In my daily November soybean numbers on Friday; my pivot acted as resistance and was .03 from the actual high; my support was .01 ¾ from the actual low.     

 

All thoughts in this article are of my opinion, and you can have your opinion, but it is my intention for producers to rethink what they are doing, and consider becoming self directed. I do not care what service you use, make sure you are learning a better way to hedge than you are doing now.                
                                    

8/11/14:

Grains: Corn closed just off the contract low but still higher for the week. Soybeans gained $.26 ¼ for the week, buoyed by the August contract which gained $.34 ¾ on Friday alone, and up $.69 ¾ for the week. Dueling forecasts latest winner is the calling for much dryer and warmer temperatures in the 10 to 15 day forecast, just enough to keep the bulls "hope" alive. If corn keeps going down, it will weigh heavily on soybeans. Report on Tuesday is just as important as what the weather forecasts look like on that day. Fundamentals and final crop production will not be known until the grain is in the bin, but perception and market sentiment will swing the pendulum for now. Whatever happens on Monday will be meaningless on Tuesday after the report comes out.   

It is easy for me as a trader to assume risk when I want to, but producers who are truly looking to reduce the gamble and more concerned with assuring some income, are also assuming the risk they want to. But the unhedged or any part thereof, is their gamble and does have significant risk, as the unhedged are finding out again. Months ago I said was really concerned not only about 2015, but 2016 too, and knowing if I were a farmer I would be hedging as far out as I could especially if the price is profitable. I might not get what I want, but I will get what I need. When a shortfall is apparent that would change the supply, I can change my hedge to reflect it. I know it is not easy to hedge at these prices, but I say it is much harder not to.

Nobody knows what the market will do this week let alone by harvest, but knowing how surplus markets act, I have strong feelings that we will be lower than here at harvest. How low depends on how large the crop comes in. I see no reason at harvest to be higher than where we are now. At these price levels we have a long way to go before we see a bottom. Corn charts look terrible, soybeans look like there are still bulls fighting the fight, but the direction is still down.

Monday I do not expect too much to happen, but Tuesday anything can happen. The report can send prices one way, and by the end of the day it can finish the other way. Do not take anything for granted. I just trade the numbers, the report does not have anything to do with how I trade, I do not trade the report, I trade the charts and the numbers I get from them.

This report can be volatile, and unless it is near the average trade estimates, we can move significantly. Corn spreads that are $.02 ½ or less from full value will lose greatly if we rally $.30, and larger spreads like a $.80 put spread will lose greatly. Yes, we want every penny we can get from these hedges, and unless the market is above... Subscribe now!

Obviously nobody thought prices could get below $4 this year, because nobody thought we would get ideal conditions this far either. Give me 80% of the first $.50 down from the original $5.60 hedge and then it was every bear for himself. If I got half of what the market went down from $5.10 until here because my protection ran out, I would be more than happy if I was a bull and got paid for being wrong, or I am going to get the rest with the crop insurance I have. Any scenario including just getting $.40 of a $.50 hedge and did nothing else, I would at least have something to say I am glad I did right.    

Have you looked at your past thoughts lately as you had written down in your journal or notes to keep yourself real? You must ask yourself what you will do if 1 year from today if we trade $2.90 or $5.90. You must have a plan all the way up, or all the way down. Live in the now, but you MUST plan for the future, I have always lived my life this way, and of course reflected in my trading approach, same as I look at what I made not what I left on the table, half full or half empty, and will always be half full to me. Just like being unhedged, whatever I left on the table or what I would not sell/hedge had risk attached to it, and when I ended my trade I ended my risk and so what was left on the table was not just the profit, but the risk I would have taken to have gotten it.

I see why having a hedge protection cheaply and leaving $.50 upside unscathed is not good enough, or $.80 up in soybeans like we do, it is because the unhedged are no different than the 99 out of 100 traders, who do not exit losing trades because they are more worried that the market will turn around and they would make "all this money" instead of worrying about losing more money in a losing trade. $1 down and then $2, and they worry about it going higher? Let me try to say it this way, if you produce $500,000, $5,000,000, or more than $50,000,000 worth of grains when at prices seen in May, how much did you lose? Now take that money lost and tell your wife you lost it in Las Vegas, or that the amount you just lost was lost on the Superbowl, what would she say, or what would you say "it is part of the business" and was lost due to the price of grains going down, really? She does not know you could have hedged, she does not know that a part of farming is betting it all on the Superbowl, or the stock market, or the grain market? I rest my case your honor.

These are my opinions and you or those services can think differently, I feel strongly about the things I say, and if you wonder how you botched marketing this year, look at all the people and services around you and ask yourself if they did any better. If you have a service that you are happy with the last 2 years as the market has come down, continue using that service. If not, you should think about and consider being self directed. Use any service that helps you in the pursuit of being self directed, so you can reflect the risks you want to take, and the rewards you are happy to live with. When services act like without them you are powerless, you should know you are in trouble already. Knowledge will empower you, not the knowledge of how to form the best guess about the fundamentals, but how to get hedge protection cheaply and allow for some upside too. Maybe you do not think the market can get high enough like the service is looking for, why should you follow their bullish thoughts. Take their opinion into consideration, but always do what is right for you. Some want more of a gamble, and some want little gamble at all, so how can they both listen to the service that is "one size fits all"? I am posting this article and the last 2 paragraphs are more for unhedged producers to think about.

Options premiums (prices paid for the strike) should come down after the report is out, and would take a move of twice the ATR to keep the premium in there, so if we have a normal range we will see premiums really decline. Time and crop problems are reduced every day, and every day we are closer to harvest.

I still say "I want to sell rallies today at resistance much more than buying support numbers today, but would trade without bias and risk $.03 in corn and $.05 in soybeans using a stop to protect any idea". That will be my idea for report day too. I have the same chart parameters going into and after the report as before. 

                    
8/8/14:

Grains: November soybeans have closed only 4 times above the bracket line at $10.88 ¼ in the last 4 weeks. Any rally up to there should be sold or hedged before the report on Tuesday. I want to have known risk option bear strategies or be well hedged going into the report, I do not want to have futures on before the report, have no problem day trading futures once the report is out. I could care less what the report says, I am only concerned with how the market reacts to it. Report or no report I trade the charts. Knowing there is a report has always been a "red flag" for futures contracts, but I have no problem using known risk strategies and the odds already in my favor. I will say that soybeans do not look bad, and they are up $.19 ½ for the week. On the other hand they do not look good above $10.88 ¼, and I remind you the parameters I gave you with $11.18 ¾ resistance, $10.55 (now $10.54 contract low) support, and the pivot of those two numbers is $10.87. I said we would trade sideways until the report inside those parameters, and we rotated twice up and down for $.62 or more. If you could take $.25 of each $.60 move up and down, you would make $1 instead of $.62 selling the high and buying the low or looking for more. I want to hedge or improve hedges wherever possible going into the report, and that includes reducing any 2014 call above $12.20, they will no longer do you any good unless we can rally $.60, but will not help you until we get "up there".

Read comments for Monday until now, last Friday we closed in "the hole" with no way of knowing how we would open Sunday night, but not only did I have a plan for the upside on Monday, I had a plan for the week no matter if the market went up or down or both ways more than once. I wanted to "buy" or reduce my upside, and both corn and soybeans still have nice gains for the week.

It is a silly game to bet, with everything unknown, assumed, and can change on any given morning when the weather could change dramatically. We could have much more or less than guesses today, but nobody knows what the reality will be about true production numbers. What is worse, we might have already priced in what is guessed, or the price at harvest based upon expectations, or we could be way off in what the price will be. In October when we can get a better handle with what is out there, only the "old lady" will tell you after the fact what you should do TODAY. So go look into the mirror and ask her to tell you what you should do now. Whatever she said you should do today, DO IT! Always do what is right for you, and make sure that you do not risk too much on any idea such as hedge or improve one.

Days are getting shorter, nights are longer, and temperatures are ideal for a big crop. Rainfall could not have been better for more than half the crop, and only certain areas are crying rain. US grain production has never been in a greenhouse, but this year is one of those years that it looks like it is. Wherever the shortfall, other areas will more than make up for it. Cliché’s get to be cliché’s because there is a lot of truth in the statement. "Big crops get bigger" was around long before I was born, because there is some truth to it. No matter what the crop size is, the next factor the market will need to discover is price, the price that is in balance with supply and demand. Knowing the crop size is one thing, knowing what "fair value" is for that crop is another.  

Some of the downfalls of services and analysts have many things in common, the main thing is that none of them could trade their way out of a paper bag if their life depended on it. They can talk the talk, but not only can they not walk; they have not learned to crawl yet. The first things you have learned from me are, know and control your risks at all times, and never risk more than you are willing to make. I am a simple man and it made sense to me to know what I am doing before I started to trade. It does not take a genius to know that if you lose all your money, you will not be able to continue to trade (or farm). I did not learn from the people who were successful, I learned from the losers, and what did they all have in common, they lost too much money. Making money was not the problem, losing money was. So as a person who is learning what does not work, I am learning what does work or should I say what I need to avoid.

These analysts, brokers, hedge services, let alone producers, should know what I knew before I bought a seat, risk control, and they are nowhere near competent to have a valid mindset to approach trading or hedging. I have taught you to think what you want, but have lines in the sand on EVERYTHING you do, THEY broke my kindergarten rule and now have placed many a farm and trading account in jeopardy. Do not forget "do not sell it below $5.50 and just sell it in 2014"! Do not forget those looking to sell or hedge $1 higher and have lost $2 trying to do so. They are not traders, THINK what you want, but be prepared for reality. Never again will you be anyone’s victim, except if you ignore what you have learned and become your own victim. From what I have seen the last 6 years, I would take advice from most of my producers, but do not want to even listen to anyone who has not been completely hedged 2014 above $5.10. 

Year after year you see I need no reason to sell or capture what I can on rallies, or buy or capture what I can on breaks. I can stay in a trend for almost 2 years and counting, and I could take swing trades against the trend or reduce or improve my position/hedge at the same time when opportunities present it. This is what I reinforce when the market is quiet, things that improve your mindset so you can accept the things that will help you, but does not seem comfortable since it is against your herd mentality that you were running with in the past. You never read or at least I have not seen too much of, anything from anyone that can truly teach you something new that can actually help you in your pursuit of successful hedging or trading, so they mostly talk about fundamentals that can easily be disputed with just another "guess".

These are my opinion, and reasons for you to become self directed, and needing no other information than what you can find in a chart, and the knowledge you have learned to implement and use as a hedging strategy no matter bull or bear market. From what I have seen "out there" the last few years, you would need to try very hard in order to do worse than the "guru’s" have. Just like you learned from your parents growing up, learn how to be self reliant, take responsibility for what you do, and improve in time from the wisdom you get from your experiences. I have 38 years as a member, 3 years prior experience on the trading floor, and I can see how the 38 year olds in these companies might have more to learn, but you would think that the people who "run" these services would have the knowledge and oversight to at least be 100% hedged long ago. Corn can go to $2.90 and they go home and ask "what’s for dinner", and those who listened to them might be wondering if they have a home to go home to after harvest. Shameful! Hedge means to take risk off the table, ask yourself, how well are they doing, and can you do better yourself?

Nothing has changed in the market as far as the charts and I am concerned. I have always said I hate to buy a quiet market, but things do get quiet before a major report, and this one is major. The problem is, they are not factual and are based on best guesses, and then of course the "guru’s" get to second guess the USDA guesses. And you think that I want to bet on that?

You have today, Monday, and Tuesday morning to adjust your positions/hedges. Do what is right for you, reduce the upside exposure as cheaply as possible, and sit back and watch the "game" begin at 11am Tuesday.

I still say "I want to sell rallies today at resistance much more than buying support numbers today, but would trade without bias and risk $.03 in corn and $.05 in soybeans using a stop to protect any idea".
  

 


Want to know what I think for tomorrow and going forward?


The markets covered daily are 2014 & 2015 Soybeans and Corn.


My numbers are sent before the night session begins. (via your email)

Find out why many of my subscribers keep renewing this service for years. 
 
Howard Tyllas Daily Numbers and Hedge Ideas is designed to help you plan your hedging strategies, and speculators for day or longer term trading.

 

 $299.00 USD for each month, renewable monthly

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Howard Tyllas 
Put yourself in a position to make money, use the daily numbers service!

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Tel.1-312-823-9189, 1-702-405-7245

Hedging Corn and Commentary for 7/21/14

Jul 21, 2014

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Attention Corn & Soybean Producers:

 

Feel free to inquire on learning about the best way to hedge. In my opinion my strategy is the best I have seen since I became a member in 1976 trading corn and soybeans for my own account.

 


Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 40 years. 

 

Sign up: Free 1 Day Trail of My Daily Numbers & Hedge Ideas 

 

These numbers were sent on 7/18/14 4 pm to be used for trading on Monday 7/21/14. 

December 2014 Corn


3.95 ¾   
3.89 
------------3.78       Pivot & contract low                  
3.67                             
                        
 
5 day chart….     Down from last week same day                           
Daily chart …     Down     
Weekly chart…  Down              
Monthly chart…Down                          4.66 is the 200 DMA
ATR 10                                                          Ex. Oversold 1%
     

 

For 7/21/14: Contract low is a pivot now, daily numbers provide support and resistance.       
  
In my daily December 2014 corn numbers on Friday; my pivot acted as resistance and was .01 (.00 ¾ in open outcry) from the actual high; my support was the EXACT actual low.        

"The low of 2014 made in January is an automatic bracket line, now resistance".

7/21/14:

Grains: Corn closed on its lows, and is highly likely to gap lower on Sunday night unless the weather forecast changed. September corn jabbed below the low made last Friday to see if there was sell stops below, and since there was not, they held off from jabbing below the low in the December contract, they will wait for Sunday night for that. Bears are already in total control, they might as well wait for the weekend weather and latest forecast to give the green light on Sunday to press the downside, and punish the bulls. The best the bulls can look for is a retest of last week’s high.

November soybeans actually closed $.10 ¼ higher for the week, but $.33 ½ off the previous day’s high, closing the week poorly. The market needed to correct as I noted before the correction began. Last Monday’s comments said it might go down for a day or two, but I thought a retest of the previous weeks high was likely. On Tuesday I said I was looking for $11.17 ½ and I said I would sell it there. Wednesday comments I was looking for $11.17 ½ and said it was dangerous to be long looking for a rally. On Thursday it got to $11.18 ¾.  I am not a reporter after the fact, I tell you what I think and why, and what I want to do no matter if the market goes higher or lower, I have a plan even if it means doing nothing.

Bulls have a chance if above the bracket line at $10.88 ¼, but below there they are in for more trouble and at least a retest of last Fridays contract low of $10.65. Best the bulls can look for this week is a retest of last week’s high.  

Low volume and small ATR’s do not bode well for higher prices. I never like to buy a quiet market, although normally the grain market is slow and low volume during the growing season when there are no weather events.

I have the same story since September 2012 and will tell it again, if you get decent growing seasons going forward, grain prices will have nowhere to go but lower without regard to the cost of production.

I still think we will go down to my projections by harvest, and then should claw our way back until March. The claw back at best will be to our current levels. Next year at this time if the 2015 crop looks like this one, I project $2.90 corn and $7.90 soybeans, those prices held the huge meltdown in 2008, and good enough to earn my respect.

Our 2015 corn hedges are now below our protection, 95% of my producers hedges are $4.90/$4.40 or the $4.80/$4.30, but in time these spreads will get to $.45, and then you can start over with $.37+ in your pocket and get new protection. If you let it go to full value, most paid $.04 or less by selling a call spreads, leaving you with $.46 minus commissions.  

Our 2014 and 2015 soybean hedges are doing fine now, but it is only a matter of time before that protection runs out.

New hedges should consider selling more upside away, or closer to the put spreads, to make it cheaper to buy a little more protection than $.50 corn or $.80 soybean hedges. Many the last few years have bought much more than that, or morphed cheaply when they had one of many chances, and have really paid off. Maybe they were bearish, maybe just glad to lock in more of what could be high prices, but whatever the reason for their decisions, it was comfort for them when they hedged, it was comfort when we rallied, and certainly is comfort now.

Take responsibility for your decisions.

Instead of saying what you should have done (the old lady at the racetrack), learn from your past and do what is right for you now.

Many have hedged 2015 100%, some only a percentage of what they NEED. With my many warnings for the unhedged, and demand for you to have a plan if not, you are in jeopardy of working for nothing next year. A few weeks ago you could have gotten $5, many a day for months it was offered there, and I do not know how much you were looking to sell it higher for, but right now you are losing over $1.20 to get it.

Think what you want, but reality is the only real. Corn, or a car, or a house might be worth a price in your mind, but go into the real world and you will find what reality says they are worth. Grain pricing is easy; the last price is always reality.

Now reality hits home, with a good crop this year stocks will be burdensome, and the only way to use the crop is to go lower and find demand only low prices can activate that cannot be used at current price levels.

Nobody on my book has December 2014 corn protection below $4. Your insurance should be taking over for protection below there. Nothing could be done cheaply once the market went below $4.80, if the decision was made not to need more protection when above $5 and cheap; the price makes the decision for not getting it when expensive. Instead of worrying about more protection for 2014, worry about what is unhedged for 2015 where you can always get $.50 protection and at least $.50 upside unhedged really cheap for $.04 or less. Buying $.20 at the money corn 2014 put spreads will cost almost $.10 and not worth it when your insurance should really be working for you at this price.

You must wait until your 2014 corn call spreads are bought back, and your put spreads are within $.02 of full value, before you can make another decision. In time and you already have the price of the insurance locked in, and then you can easily start over and do ... Subscribe now... You made between $.40 to over $1 depending if you started when at $5.60, and how bearish you were, or how well you morphed when cheap. Add that to a $4 call you might sell, and what you get in return is a new 3 way protection for little to no cost depending on the strikes you select.  

This is the first week this year that I am hearing bad news from many a producer who called when placing orders. My producers are doing great, but everyone around them is turning into if not already, the living dead. There are many at every exchange, and I have seen many every year and now can remember them as "ghosts of bad decisions past". I never want to put myself into that "position", and it is their position that gets them into deep trouble. It was easy to learn from watching traders make that fatal lesson before I bought a "seat", nobody had to tell me the reasons why they could not last more than 6 months, nor what they were doing and why, I just learned that if you lose too much on one bad idea, you go "bust". So the easiest way to avoid that was to not risk too much on one idea. That is one important lesson I learned from the losers that I keep in the forefront of my approach to this day, the winners rarely taught me anything about what they do. 

Now reality is sinking into the unhedged, and instead of thinking how they will spend all the money when they can sell corn at $6 or whatever they were looking for, now they are looking on how to pay the bills. "The market went down, there was nothing I could do, or that is a part of the "business" they tell their wives or worse if they really tell themselves that, because all that means is that is their way of masking the "gambler" inside themselves.  Life must be boring without the gamble, like there are no other gambles in farming, but the one gamble should never be allowed to be neglected, is some sort of hedge to protect your income separate from what you think. The unhedged are more worried about what they leave on the table or do not make if it goes higher, than worried about what happens if the market goes lower instead. Just as I form trade ideas, I taught you to hedge, the first thing I look at is protecting the risk if wrong versus the reward for being right. I do not want to try and hedge $.40 higher and watch the market go down $.80 instead. Just like I worry about what the risk is on a trade idea, you must worry about protecting your income if the market goes down.

I am proud of this hedge service, you have all one way or another, hedged all or part of your risk, you have total control of what you do, and you know all the reasons when to improve your hedge cheaply as time goes on. You use the chart as your road map, and that is all you need to make your hedge decisions. I am getting many calls and inquire from the walking wounded, and the one from the other day is the winner so far this year. He opened a hedge account at a "big name" firm, he hedged and of course he made money, and the broker told him he "was suppose to use that money to gamble on the grain market", and within an hour he lost most of the money made on the hedge. How many victims are out there? It is like going to a "quack" when you thought he was a real doctor. He says he graduated from Harvard, but if you look closely at his paper on the wall it says "Harvard" Nigeria. Big name firms in my opinion have a lot of quacks and very few doctors. Being self directed is the most important thing you can do to protect yourself from what is "out there".

As the weather permits, we will work our way lower. Rallies will be short lived and met with sellers at resistance levels. If producers and funds turn sellers, we can see sharply lower prices by September after the weather premium is taken out of soybeans. You can say it is like an odds on favorite paying only $2 for every $5 bet, but heavier favorites than that lose more than you would expect. This crop is NOT in the combine yet, and I have respect for the market knowing it can rally for some unforeseen or unknown reason, but it can rally.

I said in September 2012 we could be starting "the great bear market" because we started from "all time highs". Those highs was the first mile in the marathon, we are much more than half way to the finish line now, but plenty of race to run yet.  

Now the whole farming industry will feel the change, and those who live in the now but do not plan for the future, are their own victims, and I say that in all aspects of life. I have always "lived for today, but plan for the future", and I certainly did that daily to make a living, let alone on plans for the future of my family. 

Red ink is here and now, and it does not look like things will get better until there is a production shortfall, and that is a terrible bet. Betting the "normal" is better odds than the abnormal. I tell my producers that in time they will see "fire sales" but to make sure the fire is out before you buy it.

Hedgers who are 100% hedged through 2015 have taken "income" off the table, as well as stress, and buys time for more decisions for 2016. This is the first day of the rest of your life, write in your journal daily what you feel is right for you, the reasons you hedged or did not hedge, and at least try to execute your plan, and learn from your experiences to improve the way you look and do things in the future. The BEST thing that can happen to you after you hedge, is for the market to get into 2008 or 2012 mode and rally straight up, because that means you can capture more money than your original hedge.

I know I have said things you do not want to hear, and put words in front of your eyes that you know you cannot ignore, but just like it is easy to be a bad parent and hard to be a good parent, it is worth it for me to take the hard road to say what is right for you.

I know what sad faces say weeks before they are never seen again, because the gorilla in the clearing house will not tolerate trading on reasons, you must trade money, so he makes sure he gets between you and the floor. Your bank and other places have the own gorillas, you have seen them too pass over your farm on their way to another, so make sure you never let potential profits cloud the responsibilities of protecting your money if it goes down instead. Hedge service or not, as a trader I live by the same rules. 

I would think current levels will hold, but I would not bet on it, I would rather sell significant rallies like at the highs of last week if we can get up there. I continue to say "I want to day trade futures without bias today but realize the market is extremely oversold and would be cautious when taking the sell signals down here, and risk $.03 in corn and $.05 in soybeans using a stop to protect any idea".              

7/18/14:

Grains: I do not think we are going anywhere today, I expect a slow day with a lot of position adjustments before the weekend. With a continued ideal forecast Sunday night, we should be eroding further next week. With a change in weather, and it would not take much, we would see what the market is made of. Just as sellers appeared in a big way when at my first resistance numbers, they should also appear at every chart resistance level.

I think the lows corn made this week will not be far from if not the bottom for the next week. Soybeans are more vulnerable to the downside next week if weather permits. Soybeans seem high priced to me versus corn, and soybean possibilities of getting a record yield must be on the table. With a big crop, soybeans are doomed from this price level. Soybeans have been Humpty Dumpty for at least 2 years now, but it is on the edge right now before the fall.

Prices seem right for now, and the bets made by the bulls and bears are now based upon the weather. Continued good weather will ensure much lower prices, hot/dry will rebound prices from what has been factored in for this price level. Weather futures are the trade idea. Perception and market sentiment based upon guesses, lets the market pendulum swing. I just want to take advantage of that, by waiting for the market to swing to a level I can risk little and be rewarded nicely when the number/chart level holds. I know where I am right (it holds) and when I am wrong (the number failed to hold), and that is impossible to do using fundamentals alone.

I continue to want to keep my known risk bear strategies for soybeans, same goes for corn, but the downside appears limited for now. 

November soybeans had the correction I was looking for to the tune of $.53 ¾, $.01 ¼ from my $11.17 ½ resistance level I talked about in my comments for Thursday. The question I had was if the market could hurdle $11.17 ½ and try to fill the gap $.16 above there. My producers who wanted to sell, most were buying protection, did sell above $11.08 to $11.18. People who bought the market or reduced call spreads, or sold put spreads, waited for the market to get below $11 before doing so.

I think the range will be below average, I would tell you to adjust your position to make yourself comfortable going into one of many to come weather weekends. Compare Friday weather forecast at the close with the forecast Sunday night, if you are looking for direction to come from that. After last year I have no respect for weather forecasts, so I disregard the affect one might think the weather has, and stick to the charts because that is 100% factual based on everyone’s opinion in the past up to the last trade price. That is the only reality I can touch and feel.     

I continue to say "I want to day trade futures without bias today but realize the market is extremely oversold and would be cautious when taking the sell signals down here, and risk $.03 in corn and $.05 in soybeans using a stop to protect any idea".              

 

 

 


Want to know what I think for tomorrow and going forward?

 


The markets covered daily are 2014, 2015, & 2016 Soybeans and Corn.

 


My numbers are sent before the night session begins. (via your email)

 

Find out why many of my subscribers keep renewing this service for years. 
 
Howard Tyllas Daily Numbers and Hedge Ideas is designed to help you plan your hedging strategies, and speculators for day or longer term trading.

 

 

 

 $299.00 USD for each month, renewable monthly

 

Howard Tyllas Daily Numbers and Hedge Ideas $299.00 monthly

 

 

 

Howard Tyllas 
Put yourself in a position to make money, use the daily numbers service!

 

Email: dailynumbers@futuresflight.com

http://www.futuresflight.com/

 

Tel.1-312-823-9189, 1-702-405-7245

WASDE Report for 7/11/14

Jul 11, 2014

  

Sign up: Learn a better way to hedge for free

 
Attention Corn & Soybean Producers:

 

Feel free to inquire on learning about the best way to hedge. In my opinion my strategy is the best I have seen since I became a member in 1976 trading corn and soybeans for my own account.

 


Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 40 years. 

 

Sign up: Free 1 Day Trail of My Daily Numbers & Hedge Ideas 

 

OILSEEDS:  U.S. oilseed production for 2014/15 is projected at 113.1 million tons, up 5.0 million tons with higher soybean production accounting for most of the change.  Soybean production is projected at a record 3,800 million bushels, up 165 million due to increased harvested area.  Harvested area, forecast at 84.1 million acres in the June 30 Acreage report, is 3.6 million above the June forecast.  The soybean yield is projected at 45.2 bushels per acre, unchanged from last month.  Soybean supplies are 180 million bushels above last month’s forecast due to higher beginning stocks and production.  Soybean crush is projected at 1,755 million bushels, up 40 million reflecting increased domestic soybean meal disappearance in line with adjustments for 2013/14 and higher U.S. soybean meal exports that offset lower projected exports for India.  Soybean exports for 2014/15 are raised 50 million bushels to 1,675 million reflecting record U.S. supplies and lower prices.  U.S. soybean ending stocks are projected at 415 million bushels, up 90 million.  If realized, projected stocks would be the highest since 2006/07.
 
Prices for soybeans and products for 2014/15 are all reduced.  The U.S. season-average soybean price is projected at $9.50 to $11.50 per bushel, down 25 cents on both ends of the range.  Soybean meal prices are projected at $350 to $390 per short ton, down 5 dollars on both ends.  The soybean oil price range is projected at 36 to 40 cents per pound, down 1 cent on both ends.
 
Global oilseed production for 2014/15 is projected at a record 521.9 million tons, up 5.8 million from last month with soybeans and rapeseed accounting for most of the change.  Global soybean production is projected at 304.8 million tons, up 4.8 million mostly due to higher production in the United States.  Higher soybean production is also projected for Russia and Ukraine, both reflecting higher harvested area.  Lower soybean production for India resulting from reduced harvested area partly offsets these gains.  Harvested area is reduced based on planting delays resulting from the slow development of the monsoon in the main soybean producing states.  Rapeseed production is raised for Canada based on higher planted area reported by Statistics Canada.  Rapeseed production is also raised for Australia on higher area and yield.  Global oilseed ending stocks for 2014/15 are projected at 99.7 million tons, up 3.6 million mostly reflecting a sharp increase in U.S. soybean stocks.
 
U.S. soybean crush for 2013/14 is raised 25 million bushels to 1,725 million on both increased soybean meal exports and domestic soybean meal use.  Soybean exports for 2013/14 are projected at 1,620 million bushels, up 20 million reflecting record shipments through early July.  Seed use is raised and residual is reduced based on indications from the June 30 Acreage and Grain Stocks reports, respectively.  Soybean ending stocks for 2013/14 are projected at 140 million bushels, up 15 million.
 
COARSE GRAINS:  Projected 2014/15 U.S. feed grain supplies are raised with increases for corn and sorghum beginning stocks and higher expected sorghum production.  Corn production is projected 75 million bushels lower based on harvested acres from the June 30 Acreage report.  The national average corn yield remains projected at a record 165.3 bushels per acre.  Favorable early July crop conditions and weather support an outlook for record yields across most of the Corn Belt, however, for much of the crop, the critical pollination period will be during middle and late July.  At the projected 13,860 million bushels, this year’s crop remains just 65 million bushels below last year’s record.    
 
Corn use changes for 2014/15 are limited to a 50-million-bushel reduction in expected feed and residual use based on the lower production projection and higher projected sorghum feed and residual use.  Sorghum food, seed, and industrial use, exports, and ending stocks are also raised for 2014/15 with sorghum production projected up 50 million bushels on the higher area reported in the Acreage report.  Corn ending stocks are projected up 75 million bushels with a higher carryin and lower feed and residual use more than offsetting the small acreage-driven decline in production.  The projected range for the season-average corn price is lowered 20 cents on each end to $3.65 to $4.35 per bushel.  Lower farm prices are also projected for sorghum, barley, and oats.
 
A number of 2013/14 feed grain supply and use changes are made this month reflecting June 1 stocks estimates from the June 30 Grain Stocks and based on final marketing-year barley and oats trade data from the U.S. Census Bureau.  Projected corn feed and residual use is lowered 125 million bushels based on lower-than-expected March-May disappearance as indicated by the June 1 stocks.  Corn used to produce ethanol is projected 25 million bushels higher based on the pace of ethanol production to date and lower projected sorghum food, seed, and industrial use, most of which is for ethanol.  Sorghum exports are projected up 10 million bushels reflecting continued steady export sales and the large 2013/14 outstanding sales balance.  Projected 2013/14 farm prices for corn and sorghum are lowered this month as favorable weather for developing 2014 crops reduce summer price prospects.
 
Global coarse grain supplies for 2014/15 are projected 7.0 million tons higher with larger beginning stocks for the United States, Brazil, and China and larger production for China, the EU, Ukraine, Russia, and Serbia.  Lower corn production for the United States and lower corn, barley, and oats production for Canada partly offset this month’s increases in world coarse grain output.  World barley production is higher with larger crops expected in Ukraine and Russia.  Foreign corn production for 2014/15 is raised 1.7 million tons.  China corn production is up 2.0 million tons on higher expected area.  China 2013/14 corn production is also raised, up 0.8 million tons based on the latest government estimates that include higher area.  EU 2014/15 corn production is raised 0.4 million with larger crops expected in Germany and France.  Serbia corn production is also raised 0.3 million tons.  Partly offsetting is a 0.9-million-ton reduction in Canada corn reflecting the lower planted area recently reported by Statistics Canada.  Brazil corn production is unchanged for 2014/15, but raised 2.0 million tons for 2013/14 based on higher area indications for second crop corn.
 
Global 2014/15 corn trade is nearly unchanged with a reduction for Canada exports partly offset by an increase for Serbia.  For 2013/14, world corn trade is raised with higher imports for the EU and South Korea more than offsetting a reduction for China.  Corn exports for 2013/14 are raised for Canada, the EU, and Russia.  Global corn consumption is lowered slightly for both 2013/14 and 2014/15 mostly reflecting the lower U.S. feed and residual use projections. Global 2014/15 corn ending stocks are projected 5.4 million tons higher with increases for China, Brazil, and the United States more than offsetting the Canada reduction.
 
 
WHEAT:  Projected U.S. wheat supplies for 2014/15 are raised this month with a sharp increase in forecast Hard Red Spring (HRS) wheat more than offsetting a decrease for Hard Red Winter (HRW).  The HRW crop was damaged by drought and April freezes in the Southern and Central plains; however, the HRS crop in the Northern Plains has benefitted from abundant soil moisture and cooler than normal early summer temperatures.  Yields for Durum and other spring wheat are forecast to be above average.  Feed and residual use for all wheat in 2014/15 is lowered 15 million bushels to 145 million as tight supplies of HRW wheat and relatively more attractive prices for feed grains reduce expected feed and residual use.  All wheat exports for 2014/15 are lowered 25 million bushels reflecting expectations of large world supplies and strong competition in export markets.  Ending stocks are projected 86 million bushels higher.  The projected season-average farm price range is lowered 40 cents at the midpoint to $6.00 to $7.20 per bushel.  
 
Global wheat supplies for 2014/15 are raised 1.8 million tons with increased production more than offsetting lower beginning stocks.  World production is raised 3.6 million tons to 705.2 million.  This is down 9.0 million tons from last year but still the second largest production on record.  The biggest foreign increases are 1.6 million tons for the EU and 1.0 million tons for Ukraine both due to continued favorable weather.  Production is raised 0.5 million tons for Australia based on the latest government indications for area.  Production is also raised 0.3 million tons each for Brazil and Serbia.  Partly offsetting this month’s production increases is a reduction of 1.0 million tons for Kazakhstan due to June dryness and a decline of 0.5 million tons for Canada based on the latest area indications from Statistics Canada.
 
Global wheat consumption is raised 0.9 million tons with increased wheat feeding for the EU and higher food use for several countries.  EU wheat feeding is raised 1.0 million tons as wheat quality is expected to suffer in the lower Danube region because of excessive rainfall in recent weeks.  Feeding reductions for Kazakhstan, Egypt, and Thailand are partly offsetting.  Food use is raised for Indonesia, Sudan, Morocco, and Bangladesh but lowered for Egypt.  Global wheat trade for 2014/15 is lowered with exports reduced 1.0 million tons for Kazakhstan and 0.7 million for the United States.  Partly offsetting increases in exports are made for Australia, Ukraine, and Serbia with improved crop prospects.  EU imports are lowered 0.5 million tons due in part to larger expected supplies of feed quality wheat in Bulgaria and Romania.  Imports are also lowered for Egypt and Mexico, but raised for Sudan, Indonesia, and Nigeria.  With supplies rising faster than use, global ending stocks are raised 0.9 million tons and remain at a 3-year high.
 
 
RICE:  U.S. all rice supplies in 2014/15 are raised 12.5 million cwt or nearly 5 percent to 279.8 million, the highest since 2010/11, as beginning stocks and production are raised 0.5 million and 13.0 million, respectively.  Conversely, the import forecast is lowered 1.0 million cwt to 21.0 million.  All rice production for 2014/15 is forecast at 226.0 million cwt, up 13.0 million or 6 percent due entirely to an increase in area.  All rice average yield is estimated at 7,469 pounds per acre, nearly the same as last month, but 3 percent below record 2013/14.  All rice total use for 2014/15 is raised 10.0 million cwt or 4 percent to 240.0 million, the highest since 2010/11, as domestic and residual use and exports are each increased 5.0 million to 133.0 million and 107.0 million, respectively.  Ending stocks for 2014/15 are projected at 39.8 million cwt, up 2.5 million.
 
Changes to U.S. 2013/14 rice supply and use include larger imports, lower domestic and residual use, larger exports, and higher ending stocks.  All rice imports for 2013/14 are forecast at 23.0 million cwt, up 1.0 million from last month, due mostly to an unexpectedly large May shipment of broken rice from Thailand reported by the Bureau of the Census.  Domestic and residual use for 2013/14 is lowered 1.0 million cwt to 123.0 million based largely on NASS’ Rice Stocks report showing larger than expected stocks as of June 1.  Exports for 2013/14 are raised 1.5 million cwt to 93.5 million based on data from the Bureau of the Census through May and data from the weekly U.S. Export Sales report through early July.
 
The 2014/15 U.S. long-grain rice season-average farm price is projected at $12.00 to $13.00 per cwt, down 80 cents per cwt on each end of the range from last month.  The 2014/15 combined medium- and short-grain price is projected at $17.00 to $18.00 per cwt, down $1.20 per cwt from a month ago.  The 2014/15 all rice price is projected at $13.50 to $14.50 per cwt, down 90 cents per cwt on each end of the range from last month.  Larger domestic supplies of both long-grain rice and medium-grain rice along with plentiful supplies among most of the major global exporters will exert downward pressure on prices.
 
Global 2014/15 rice supplies are reduced due to both lower beginning stocks and production.  Beginning stocks for 2014/15 are lowered 0.6 million tons due chiefly to reductions for China and the Philippines, partially offset by an increase for Vietnam.  Global production is projected at a record 479.4 million tons, down 1.3 million from last month owing mostly to a decrease in India, partially offset by increases for Vietnam and the United States.  India’s 2014/15 rice crop is projected at 104.0 million tons, down 2.0 million from last month attributed to the slow and erratic start to the Southwest Monsoon.  Global trade and consumption are changed little from a month ago.  U.S. 2014/15 exports are raised 160,000 tons from a month ago.  World ending stocks for 2014/15 are projected at 108.5 million tons, down 2.1 million from last month, and 3.0 million below the revised 2013/14 stocks forecast.  Ending stocks projections for 2014/15 are lowered for India, China, and the Philippines, partially offsetting increases for Brazil, Vietnam, and the United States.
 
 
SUGAR:  The Mexico 2013/14 estimate for sugar production is reduced by 75,000 metric tons (MT) to 6.025 million, based on very close to end-of-harvest reporting from Mexican authorities.  The 2013/14 estimate of exports is increased by 80,000 MT based on industry reporting of increased exports to non-U.S. destinations.  No other changes were made, implying ending stocks at 663,000 MT, for a low stocks-to-consumption ratio of 15.4 percent.  The Mexico 2014/15 forecast of production is lowered to 6.140 million MT based on expected reduced harvested area, and average sugar yields.  Imports are forecast to increase 224,000 MT to cover domestic consumption in that period before the harvest begins in late November.  Because consumption and ending stocks forecasts are unchanged, exports are forecast 291,000 MT lower at 1.616 million.  
 
The U.S. 2013/14 beet sugar production is lowered by 50,000 short tons, raw value (STRV) to 4.750 million, based on an expected slow start of 2014/15 harvesting in September.  Imports are increased by 89,000 STRV due to the reallocation of the tariff-rate quota (TRQ) by USTR.  Total deliveries are increased by 90,000 STRV based on pace.  These events imply lower ending stocks, estimated at 1.808 million STRV with stocks-to-use at 14.5 percent.  The U.S. 2014/15 sugar production is forecast 130,000 STRV lower due to revised cane sugar processors’ forecasts.  Total production is forecast at 8.225 million STRV.  Imports from Mexico are reduced to 1.877 million STRV, down 234,000 STRV.  Deliveries for human consumption are increased by 50,000 STRV, based on modest growth from the previous year.  Ending stocks are forecast at 1.447 million STRV for a stocks-to-use ratio of 11.9 percent.
 
LIVESTOCK, POULTRY, AND DAIRY:  The forecast for total meat production in 2014 is raised from last month.  Beef production is raised on higher steer and heifer and cow slaughter and slightly higher carcass weights.  Pork production is lowered as USDA’s Quarterly Hogs and Pigs report indicated a slower-than-expected expansion in farrowings during the second quarter.  This implies lower than previously forecast hog slaughter later in the year, but strong hog prices and lower feed costs are expected to provide incentives to feed hogs to heavier weights.  No change was made to broiler production as the production expansion remains muted.  Turkey production is raised on higher second-quarter production. Egg production is raised on strong table egg prices and lower feed costs.  For 2015, beef and broiler production is forecast higher, but pork production is forecast lower.  Cattle slaughter is forecast higher in early 2015 based on 2014 placements.  Pork production is reduced as supplies of market hogs will remain relatively tight.  Broiler production is forecast higher as lower expected feed costs support a more rapid increase in production.
 
Forecasts for 2014 and 2015 beef imports are raised as demand for processing grade beef remains strong.  Exports for 2014 are raised on recent data.  Pork imports for 2014 are reduced slightly.  Despite high prices, pork exports remain robust and forecasts for both 2014 and 2015 are raised.  Broiler and turkey exports are raised for 2014 based on May data, but forecasts for 2015 are unchanged from last month. 
 
Cattle and hog price forecasts for 2014 are raised from last month on the strength of demand.  Broiler price forecasts for both 2014 and 2015 are unchanged from last month.  The turkey price forecast for 2014 is raised based on June price data, but the egg price is reduced.  The hog price forecast is raised for 2015 on expectations of tighter supplies and continued strong demand.  Prices for cattle, broilers, turkey, and eggs are unchanged at the midpoint for 2015.   
 
The milk production forecast for 2014 is lowered from last month as slower growth in output per cow more than offsets a more rapid expansion in cow numbers.  The forecast for 2015 is raised as higher milk prices and lower feed costs are expected to support more rapid growth in cow numbers and output per cow.  Export forecasts for 2014 are lowered on a fat basis but raised on a skim-solids basis.  High domestic butter prices are expected to limit export opportunities, but nonfat dry milk/skim milk powder (NDM/SMP) exports are expected to remain strong.  For 2015, no change is forecast to fat-basis exports, but strength in NDM/SMP sales will help support higher skim-solids exports.  
 
Product prices are forecast higher for 2014 with strength in butter prices expected to carry into 2015.  Despite increased production, robust domestic demand and stronger NDM/SMP exports will support prices.  Class III and Class IV prices for 2014 are raised on stronger component product prices and the Class IV price forecast for 2015 is raised reflecting strength in butter prices.  The all milk price is forecast at $23.25 to $23.55 per cwt for 2014, and $19.75 to $20.75 per cwt for 2015.
 
COTTON:  The 2014/15 U.S. cotton forecasts show sharply higher production and ending stocks relative to last month.  Expected production is raised 1.5 million bales to 16.5 million due to larger planted area indicated in the June 30 Acreage report and lower expected abandonment based on favorable precipitation and improved crop conditions.  Domestic mill use is raised 100,000 bales due to expanding domestic mill capacity, while exports are raised 500,000 bales due to the larger available supply.  Despite the higher disappearance, ending stocks are raised to 5.2 million bales which, if realized, would be the largest since 2008/09.  The forecast range for the marketing-year average price received by producers is 60 to 76 cents per pound, with a midpoint of 68 cents, a 5-year low.
 
A combination of higher estimated beginning stocks, higher production, and lower consumption raise projected 2014/15 global ending stocks by 3.0 million bales this month.  World beginning stocks are raised nearly 1.6 million bales due mainly to higher estimated 2013/14 production for Brazil and lower consumption for China and Pakistan.  China’s consumption is reduced 1.0 million bales for 2013/14 and 500,000 bales for 2014/15, as high domestic price levels and uncertainty about future policies have discouraged cotton use in textiles in favor of polyester.  However, China’s consumption is expected to grow nearly 6 percent in 2014/15 as a result of the announced elimination of government price supports.  For 2014/15, world production is raised 500,000 bales, as the forecast increase for the United States is partially offset by lower production for India, Australia, and Brazil.  Aggregate world trade is about unchanged from last month, but exports are raised for the United States, Australia, and Brazil and reduced for several other exporting countries.  World stocks for 2014/15 are now projected at 105.7 million bales.
 

 

 


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Acreage Report 6/30/14

Jun 30, 2014

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 Acreage Report 6/30/14

Corn Planted Acreage Down 4 Percent from 2013
Soybean Acreage Up 11 Percent
All Wheat Acreage Up Less Than 1 Percent
All Cotton Acreage Up 9 Percent

Corn planted area for all purposes in 2014 is estimated at 91.6 million 
acres, down 4 percent from last year. This represents the lowest planted 
acreage in the United States since 2010; however, this is the fifth largest 
corn acreage in the United States since 1944.

Soybean planted area for 2014 is estimated at a record high 84.8 million 
acres, up 11 percent from last year. Area for harvest, at 84.1 million acres, 
is up 11 percent from 2013 and will be a record high by more than 7.4 million 
acres, if realized. Record high planted acreage is estimated in Michigan, 
Minnesota, Nebraska, New York, North Dakota, Ohio, Pennsylvania, South 
Dakota, and Wisconsin.

All wheat planted area for 2014 is estimated at 56.5 million acres, up less 
than 1 percent from 2013. The 2014 winter wheat planted area, at 42.3 million 
acres, is down 2 percent from last year but up less than 1 percent from the 
previous estimate. Of this total, about 30.4 million acres are Hard Red 
Winter, 8.50 million acres are Soft Red Winter, and 3.41 million acres are 
White Winter. Area planted to other spring wheat for 2014 is estimated at 
12.7 million acres, up 10 percent from 2013. Of this total, about 
12.0 million acres are Hard Red Spring wheat. The intended Durum planted area 
for 2014 is estimated at 1.47 million acres, down slightly from the previous 
year.

All cotton planted area for 2014 is estimated at 11.4 million acres, 
9 percent above last year. Upland area is estimated at 11.2 million acres, up 
10 percent from 2013. American Pima area is estimated at 178,000 acres, down 
11 percent from 2013.


 

 


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The markets covered daily are 2013 & 2014 Soybeans and Corn.

 


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Find out why many of my subscribers keep renewing this service for years. 
 
Howard Tyllas Daily Numbers and Hedge Ideas is designed to help you plan your hedging strategies, and speculators for day or longer term trading.

 

 

 

 $299.00 USD for each month, renewable monthly

 

Howard Tyllas Daily Numbers and Hedge Ideas $299.00 monthly

 

 

 

Howard Tyllas 
Put yourself in a position to make money, use the daily numbers service!

 

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Tel.1-312-823-9189, 1-702-405-7245

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