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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 Producers Must Know About This Bearish Market

Nov 12, 2012

 

 


Bearish thoughts continue to creep into my head.  I know many of you will want to argue my position but let's take a look at a few of the cards now in the deck which may influence the trade over the next several weeks. Don't get me wrong, there are still some major bullish cards out there, but each and every day it seems some new bearish cards are being added. Below are some important developments and the way I currently see the deck being stacked: 
 
Funds continue to remain excessively long and prices are still extremely high. Net-net this could be bearish as year-end liquidation on their part could cause further pricing setbacks. Possibly bearish for corn, soybeans and wheat.
 
  • Rumors of China canceling some recent soybean shipments, and talk of their overall demand slowing aggressively or at least until the South American production comes back online. Market extremely front-end loaded with China looking as if they are 80% of our export business. Talk circulating that prices in China are falling and crush margins are setting back, many thinking China could go hand-to-mouth until more South American supplies hit the marketplace. Near-term Bearish soybeans
  • Improving weather conditions in Brazil. Good rainfall now in several areas that were thought to be extremely dry. Talk of Brazil's soybean production possibly topping 80MMT's. Also talk of soybean production in Argentina moving higher on poor planting conditions for corn. Bottom-line some corn acres in Argentina could be moving to soybean acres. Bearish soybeans / Bullish corn
  • USDA improving US soybean yields to 39.5 bushels per acre. The biggest increase ever in a Nov USDA report. If we can now grow close to 40 bushel per acre soybeans with last years weather conditions, just tell me what we are going to grow in above average conditions??? Obviously bearish Soybeans, as production estimates work higher. 
  • Talk here in the US of record soybean acres going in the ground in 2013. Many respected sources talking about 80 million acres plus. Especially once all of the double-crop beans are accounted for. Bearish soybeans 
  • Weather is a far cry from normal. Just this weekend new record temps were being reported all across the Midwest. This is absolutely the  MOST important bullish card in the deck for corn, soybeans and wheat. don't know when, but you have to assume at some point in time it returns to normal. 
  • US Fiscal Cliff rapidly approaching and both fund traders and money managers are nervous. Money-flow could be in jeopardy. Bearish corn, soybeans, wheat 

 

This is just a portion of the full-list, if you would like to see all of the variables that I believe are influencing tha grains, get signed up for the Free-Trial of my newsletter here:  The Van Trump Report

***If you are looking at today's price action and getting worried about what you should do about making your cash sales, I would recommend that you don't just take it a day at a time.  You need to have a plan in place so that you can take the emotions out of your decision making and be able to pull the trigger when the market tells you to.  If you would like some help with that, or would like to follow our cash sales recommendations, get started with us today. Our Trial subscribers have access to the full report and can see where we have made cash sales.   

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