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WHEAT: U.S. wheat ending stocks for 2014/15 are projected 5 million bushels higher as reduced exports more than offset an import reduction. Projected imports are lowered 20 million bushels to 160 million on pace to date. Projected exports are lowered 25 million bushels to 900 million on increased competition from EU and the recent strengthening of the dollar, which makes U.S. exports less competitive. Ending stocks are increased to 692 million bushels. The season-average farm price is lowered 5 cents on the low end and 15 cents on the high end to $5.85 to $6.15 per bushel. The reduction reflects prices received to date as well as a loss of competitiveness for U.S. wheat.
Global wheat supplies for 2014/15 are raised 3.3 million tons with both increased production and beginning stocks. World wheat production remains record high and is raised 1.7 million tons led by 0.5-million-ton increases for both Argentina and Kazakhstan. The Argentina change reflects harvest reports to date; Kazakhstan’s increase is from updated government statistics. Turkey is raised 0.3 million tons based on a multi-year review of production. Ukraine is raised 0.3 million tons on updated government statistics. Beginning stocks are raised 1.7 million tons mostly on back-year revisions to the Turkey production.
Global wheat trade for 2014/15 is raised with exports up 0.9 million tons on larger supplies and stronger demand. Exports are raised 1.0 million tons for EU and 0.5 million tons each for Argentina and Brazil. The EU increase stems from a fast sales pace and competitive prices. Argentina is raised on the larger crop, and Brazil is up on pace of shipments to date. A 0.5-million-ton reduction for Australia is partly offsetting. Egypt imports are raised 0.5 million tons; Philippines, Saudi Arabia, and Sri Lanka are each raised 0.2 million tons. Partly offsetting are 0.3-million-ton reductions each for Bangladesh, Brazil, and Turkey. All the import changes reflect the pace of trade to date.
Global wheat consumption for 2014/15 is up 1.5 million tons on both higher food and feed use. The largest increases for food use are for Egypt and Russia, up 0.5 million tons each. Turkey feed use is up 0.4 million tons. Partly offsetting are 0.5-million-ton and 0.3-million-ton reductions, respectively for Canada and Brazil feed use. Ending stocks are up 1.9 million tons, mostly with a 1.3-million-ton increase for Turkey on back-year revisions to production.
COARSE GRAINS: U.S. feed grain ending stocks for 2014/15 are projected lower with reductions for corn, sorghum, and barley. Corn accounts for most of the reduction with projected use in ethanol production raised 75 million bushels on higher forecast 2015 gasoline consumption by the Energy Information Administration. Corn feed and residual use is projected 25 million bushels lower with the accompanying increase expected in supplies of distillers’ grains. Corn ending stocks for 2014/15 are reduced 50 million bushels. The projected range for the corn season-average farm price is narrowed 5 cents on both ends to $3.40 to $3.90 per bushel.
This month’s changes to 2014/15 sorghum and barley supply and use are driven by adjustments in the trade outlooks for both commodities. Sorghum exports for 2014/15 are raised 30 million bushels with further strong export sales and shipments to China. Projected sorghum feed and residual use is lowered 10 million bushels and food, seed, and industrial use is lowered 15 million bushels. Sorghum ending stocks are projected 5 million bushels lower. The sorghum farm price range is narrowed 5 cents on each end to $3.55 to $4.05 per bushel. Projected barley imports are lowered 10 million bushels based on the lagging pace of trade to date. Feed and residual use and ending stocks are both lowered 5 million bushels. The barley farm price range is narrowed 5 cents on each end to $5.05 to $5.45 per bushel based.
Global coarse grain supplies for 2014/15 are projected 5.0 million tons higher mostly on higher corn production for Ukraine and Argentina and higher corn beginning stocks for South Africa, Argentina, and Brazil. Higher 2014/15 beginning stocks for South Africa reflect reduced 2013/14 exports and an upward revision to 2013/14 production. Argentina and Brazil corn production are both revised higher for 2013/14. The largest production change for 2014/15 is a 1.5-million-ton increase for Ukraine corn based on the latest government statistics. Argentina corn production for 2014/15 is raised 1.0 million tons reflecting mostly favorable growing conditions. Corn production is raised 0.5 million tons for India and 0.2 million tons each for EU, Kazakhstan, Mexico, and Turkey. Russia corn production is reduced 0.5 million tons. Other coarse grain production changes are mostly offsetting with sorghum raised for Argentina, but lowered for Mexico, and Russia barley and oats production raised and rye production lowered.
Global coarse grain consumption for 2014/15 is raised 4.8 million tons with foreign consumption up 4.3 million tons. Leading the increases are a 1.0-million-ton increase in EU corn feed use and a 0.8-million-ton increase in China sorghum feed use. Corn use is also increased for Canada, Mexico, Argentina, and Turkey. Sorghum feed use is lowered for Mexico. Global coarse grain trade for 2014/15 is raised with corn imports higher for EU, Canada, and China, and sorghum imports higher for China. Corn exports are raised for Argentina, Ukraine, and South Africa, but lowered for Russia. In addition to the United States, sorghum exports are also raised for Argentina. Global coarse grain and corn ending stocks for 2014/15 are raised slightly.
RICE: Slight revisions are made to the U.S. all rice and rice-by-class 2014/15 supply and use balance sheets. All rice imports are increased 1.0 million cwt to 23.0 million, all in combined medium- and short-grain rice. Imports of broken rice from Australia of about 21,000 tons (milled basis) were reported in the U.S. Census Bureau’s December trade data. The all rice export forecast is unchanged at 103.0 million cwt, but the by-class projections are shifted by increasing long-grain 1.0 million to 71.0 million and lowering combined medium- and short-grain 1.0 million to 32.0 million. All rice ending stocks are raised 1.0 million cwt to nearly 42.0 million with long-grain stocks lowered 1.0 million to 28.1 million, and combined medium- and short-grain stocks raised 2.0 million to 11.5 million. Stocks of broken rice, not reported by class, are projected at a little over 2.0 million cwt.
The 2014/15 long-grain season-average price range is narrowed to $11.90 to $12.50 per cwt, up 20 cents on the low end of the range and down 20 cents on the upper end—the midpoint is unchanged from a month ago at $12.20 per cwt. The all combined medium- and short-grain season-average price range is narrowed to $17.90 to $18.70 per cwt, down 10 cents on the low end of the range and a decrease of 30 cents on the high end—the midpoint is lowered 20 cents from last month to $18.30 per cwt. Two additional combined medium- and short-grain farm prices are introduced this month: a California price (on an October-September basis) and a price for Other States (on an August-July basis). The California combined medium- and short-grain price is forecast with a midpoint of $20.00 per cwt, and the midpoint for the Other States is $15.10.
Global 2014/15 rice supply and use projections are lowered from last month. Global 2013/14 rice production is forecast at 474.6 million tons, down 0.9 million from last month. The largest declines for Thailand and Cambodia are partially offset by increases for Sri Lanka and Iraq. Thailand’s 2014/15 rice crop is lowered 1.0 million tons to 19.5 million due to a reduction in dry-season plantings resulting from an on-going drought and a reduction in irrigation water availability concentrated in the Central Region. Thailand’s 2014/15 crop would be the smallest since 2006/07. Cambodia’s crop is lowered 200,000 tons to 4.7 million due mostly to flooding of the main-season crop. Global consumption is down slightly from a month ago. World trade in 2014/15 is lowered 400,000 tons due mostly to reductions for Thailand and Cambodia. Imports are lowered for Iraq. World ending stocks are lowered 0.8 million tons to 98.2 million due mostly to a reduction for Thailand, which is partially offset by increases for Pakistan and Sri Lanka. Thailand’s 2014/15 ending stocks are lowered 1.4 million tons to 9.6 million, the lowest since 2011/12. Pakistan’s 2014/15 ending stocks are raised 0.5 million tons owing to a reduction in the 2013/14 export projection.
OILSEEDS: U.S. soybean supplies are increased 10 million bushels to 4,086 million on higher projected imports. Soybean exports for 2014/15 are projected at 1,790 million bushels, up 20 million reflecting the record pace of shipments through January. Soybean crush is raised 15 million bushels to 1,795 million on increased domestic soybean meal disappearance, which is raised in line with projected gains in meat production. Soybean oil production gains from additional crush are mostly offset with a lower extraction rate. With increased production and reduced exports, soybean oil ending stocks are projected at 1.505 billion pounds, up 75 million. Soybean ending stocks are projected at 385 million bushels, down 25 million from last month.
The 2014/15 season-average soybean price range projection is unchanged at $9.45 to $10.95 per bushel. The soybean meal price is projected at $350 to $390 per short ton, up 10 dollars on both ends of the range. The soybean oil price range is projected at 30 to 34 cents per pound, down 1 cent on both ends.
Global oilseed production for 2014/15 is projected at a record 532.1 million tons, down slightly from last month. Global soybean production is raised 0.7 million tons to a record 315.1 million. Prospects for the Argentina soybean crop have improved with ample moisture and mild temperatures. As a result, the crop is projected at a record 56.0 million tons, up 1.0 million. Soybean production is also raised for China, Russia, and Ukraine. Soybean production for Brazil is projected at 94.5 million tons, down 1.0 million on lower yields reflecting the impact of limited rainfall in eastern growing areas. Sunflowerseed changes this month include reduced production for Russia and India with a partly offsetting increase for Ukraine. India rapeseed production is projected at 6.9 million tons, down 650 thousand tons on lower area. Other changes include reduced peanut production for India, increased peanut production for Argentina, and increased cottonseed production for Pakistan. Palm oil production is reduced for Malaysia as a result of recent flooding.
Global soybean and product supply and use changes this month include increased crush and product exports for Argentina, Bolivia, and Russia; increased soybean imports for Russia and the United States; and reduced soybean meal exports for India. Global oilseed stocks are projected lower, mostly reflecting reduced soybean stocks for Brazil and the United States and reduced rapeseed stocks for Canada and India.
SUGAR: There are no changes in the 2014/15 U.S. sugar supply and use from last month. Imports from Mexico are still projected at 1.602 million short tons raw value (STRV), based on the Target Quantity of U.S. Needs defined in the Agreement Suspending the Countervailing Duty Investigations on Sugar from Mexico, dated December 19, 2014. Ending stocks are calculated residually at 1.666 million STRV. The implied stocks-to-use ratio is 13.6 percent. There are no changes in the 2014/15 Mexico sugar supply and use from last month.
LIVESTOCK, POULTRY, AND DAIRY: The 2015 forecast of total red meat and poultry production is higher than last month on increases to beef, pork, and poultry production. USDA’s Cattle report, released January 30, revised the 2014 calf crop higher and pointed to a higher level of cattle outside feedlots on January 1, 2015. Given greater supplies of cattle outside feedlots, placements are expected to decline less rapidly during 2015 with fed cattle slaughter higher than forecast last month. Cow slaughter is raised slightly from last month with larger cow numbers, but is still expected to be below 2014. The increase in slaughter is partly offset by slower growth in carcass weights. Pork production is raised as slaughter to date has been above expectations. Broiler production is higher as recent hatchery data shows faster-than-expected growth in chicks placed. Turkey production is also raised on hatchery data. Egg production is unchanged. Estimates of 2014 meat and egg production are adjusted to reflect December data.
The 2015 beef import forecast is raised from last month as demand for processing grade beef remains strong and strength of the dollar makes the United States an attractive market. Beef exports for 2015 are reduced due to relatively high U.S. prices. Pork exports are lowered based on increased competition from other exporters and slower growth in global demand. The broiler export forecast is lowered on weaker demand. Turkey exports are also reduced. The egg export forecast is raised. Meat and egg trade estimates for 2014 are updated based on data for December.
Larger meat supplies are expected to pressure prices for livestock and poultry. Cattle prices for 2015 are lowered from last month, reflecting recent price weakness for fed cattle and greater supplies of competing meats. The hog price forecast is down on greater supplies of market hogs and weaker-than-expected demand. Broiler and turkey prices are reduced on larger production. Egg prices are unchanged.
The milk production forecast for 2015 is lowered from last month as slower growth in output per cow more than offsets faster herd expansion. USDA’s Cattle report estimated dairy replacement heifers expected to calve during 2015 were up about 1 percent from a year ago, while the number of milk cows on January 1, 2015, was 1 percent above 2014 and the highest since 2009. Fat-basis exports for 2015 are unchanged from last month. Skim-solids exports are higher mostly on greater shipments of whey. Fat basis imports are higher on expectations of greater cheese imports during 2015. For 2014, production, output per cow, trade, price and stock estimates are adjusted based on published data through December.
Product price forecasts for butter and whey are higher, supported by strong demand and price strength to date. The nonfat dry milk (NDM) price is lower as strong competition in export markets is expected to persist during the first half of 2015. The cheese price is unchanged, but the range is narrowed. The Class III price is raised on higher whey prices. The Class IV price is down as a lower NDM price more than offsets a higher butter price. The all milk price is lowered to $17.40 to $18.10 per cwt.
COTTON: The 2014/15 U.S. cotton estimates show lower domestic mill use and higher exports compared with last month. Estimates of production and total supply are unchanged. A reduction of 150,000 bales in domestic mill use to 3.65 million bales reflects slower-than-expected consumption through December. U.S. exports are raised 700,000 bales to 10.7 million based on remarkably heavy sales of about 2.0 million bales for the past 4 weeks, due to strong foreign mill demand for medium- and high-grade cotton. This level of exports would account for 31 percent of world trade, the highest U.S. share in four seasons. Forecast ending stocks of 4.2 million bales are reduced 0.5 million from last month. The expected marketing year average price received by producers of 61 cents is lowered 0.5 cents per pound at the midpoint and on both ends of the range.
A combination of slightly higher production and sharply lower consumption is raising projected world ending stocks by 1.2 million bales this month. Production is raised primarily in Pakistan, reflecting the latest ginning arrival data. Consumption is reduced mainly in China and the United States, but is raised for Vietnam and Indonesia. The available data continue to indicate a sluggish world consumption response to lower cotton prices, mainly because prices of manmade fibers have also fallen. World trade is raised slightly, owing to a 300,000-bale increase in forecast imports by China. Exports are raised for the United States and Pakistan, partially offset by a decrease for India. World ending stocks are now projected to reach nearly 110 million bales.
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