AG TIME Record Turkey on the Way
Nov 21, 2018
The markets up again. The banter regarding what The Trump Admin will do is getting old. Frankly, if this is what is the most important thing to the market, which it seems it is, then I must be long in the tooth. The one long term constant in, my opinion, is that the numbers matter. Today perhaps there exists a new paradigm. The US crop is big, perhaps a bit behind at 91% harvested. The carry a record, regardless if China was buying US beans. Regardless if they start buying US beans. RECORD! The global numbers record! The Brazilian crop planting pace record fast. What does this mean ? MMMM… that the Brazilian will have beans to export in January. Let’s see 45 days away. Is the world short of beans in the next 45 days? Not even close. The crush pace is a, guess what, RECORD ! Creating what ? Record meal stocks. That’s correct folks, record meal stocks. To look at the price you would think there was a shortage. Now, in addition, China is starting to reduce Pig numbers. The AFV is expanding. In closing, I am wrong like everyone, however, to me the numbers relative to the price just don’t add up.
The Corn is lackluster. There is nothing to spark a good rally. The domestic numbers in my opinion remain friendly. However, the global outlook is for larger corn production. The window for being friendly will only last so long. The wheat has some friendly concerns. The Russian prices are starting to increase. This has been anticipated for some time. As I said yesterday, do not press the short side of wheat further. The next question will be acreage and the US planting. Remain optimistic in the short run. However, if long, use puts as a protection.
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