Play Turner’s Take Ag Marketing Podcast Episode 280

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This week we go over the Fed minutes, crude oil, natural gas, and the grain and oilseed markets.  We like crude oil but it is due for a correction. Natural Gas is up about 50% year over year and we talk about why that trend is likely to continue.  Finally we talk about the grain and oilseed markets and why we like soybeans and soybean oil more than corn.  Make sure you take a listen to this week’s Turner’s Take Podcast!

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free!  You may also click here to register for Turner’s Take.

Fed Meeting Minutes

The Federal Reserve meeting minutes for were released today for the June meeting.  While the committee talked about tapering and higher rates, they want to see a full recovery post-COVID first.  Rate hikes and tightening are a long way off in 2023.  The Fed did acknowledge inflation concerns but said most of the price increases were transitory, which means short term in nature due to unique market supply and demand events.

Interested in working with Craig Turner for hedging and marketing?  If so then click here to open an account.  If you are a speculative or online trader then please click here.

Energy

I still like Crude Oil but we are due for a correction.  The delta variant could cause some shutdowns overseas and that would put a short term hit on the crude market.  Longer term I still like energy but in the short term there could be some opportunity in the bear futures spreads. Sept/Dec rarely gets above $3.00 and it is around $2.85 now.  A correction could bring that spread to $2.00 or lower.  Longer term I like crude and if you don’t want to take a shot shorting the market, then use the next correction to get long Dec call spreads.

Natural Gas is up 50% in the past year. Supplies have come down as production slowed due to COVID shutdowns and demand has surged due to renewed economic activity, warmer weather, and strong export demand. The draw on Natural Gas could continue for the rest of 2021 as supplies are not seen building on demand until 2022.  That makes $4 a target for Dec NG this summer and possibly $4.50 this winter.

Sept vs Dec Crude Oil

Dec 2021 Natural Gas

Play Turner’s Take Ag Marketing Podcast Episode 279

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The acres report and quarterly stocks report is next week, June 30th, at 11 am central.  Expectations are high for gains in both corn and soybean acres.  Quarterly stocks can also be a huge wild card this time of year for old crop corn.  Weather has been getting better for the Midwest but we are still in the midst of a strong grain demand market.  We go over all of these aspects of the grain markets and how we want to position ourselves going into the big report next week.  Make sure you take a listen to this week’s Turner’s Take Podcast!

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free!  You may also click here to register for Turner’s Take.

June 30th Report Estimates 

The CBOT has been selling off due to weaker cash prices, better Midwest weather, and the expectations of increased corn and soybean acres.  The Acreage and Quarterly Stocks reports will be released Wednesday, June 30th, at 11am central.  Traders have been reducing risk into the report due to the uncertainty that surrounds expected acres.

CORN

On March 31st the Perspective Plantings report has 91.114mm corn.  The trade is looking for a 2.6mm increase.  Some analysts this the acres could be 95mm while no one thinks it is lower than 92.  Quarterly stocks are always a wildcard for corn.  When it comes to tracking stocks and demand, the trade does a good job understanding the export and ethanol usage.  Feed is another animal all together. This is where the market can really get expectations wrong since we are only updated on this figure once every three months.

Here is something to think about next week.  94mm acres and a trend line yield put ending stocks close to 2 billion and prices towards $4 at harvest.  92mm acres and a 174 yield puts ending stocks closer to 1.1 billion and corn goes back to trading in the $6s and $7s.

SOYBEANS

The March 31st report pegged soybean acres at 87.6mm.  Teh trade is looking for almost 89mm. The high estimates are 90.4 and the low is 87.9.  For every million acres of soybeans we add to new crop, production increases by 50mm bushels.  A 2mm acre increase could put new crop soybean ending stocks around 250mm. That is tight but suggest soybeans trade in the $10 to $12 range.  If we don’t get the increased acres or yields are lower this summer, we could see soybeans go back to trading in the $12to $15 range.

The Big Takeaway

Traders are reducing risk into a highly unpredictable report next week.  I suggest you all do too. There is no reason to be naked short options into this report.  If you have have futures positions then make sure you have a long option for protection.  Don’t get heavy into this report on Wednesday!

Interested in working with Craig Turner for hedging and marketing?  If so then click here to open an account.

Play Turner’s Take Ag Marketing Podcast Episode 278

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This is the kind of volatility you can get when crop stocks are tight and new crop stocks are projected adequate-to-tight.  The summer weather volatility can be off the charts.  Expect more of the same over the next few weeks.  In our latest podcast we go over how to trade, hedge and market in these periods. Make sure you take a listen to this week’s Turner’s Take Podcast!

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free!  You may also click here to register for Turner’s Take.

Weather Market 

We are in a full blown weather market.  Old crop stocks are tight.  New crop production needs to be at trend line yields or to have adequate stocks in corn and moderately tight stocks in soybeans.  Changes in the weather lead to estimated changes in final yield, and that is why this market is so volatile.  The difference between 174 and 179 yield in corn is about 500 million bushels.  That could mean 1.4 billion carryout or 900 million!  Harvest prices at 1.5 billion or higher argue for corn to be below $5 across the board.  Ending stocks below 1 billion suggest corn should be $6, $7 or even $8!  I drastic change in the weather could mean a dollar in corn or two in soybeans.

I’ve seen this type of price action before. It reminds me of 2012-2013 and 2007-2008.  The markets are trading at high prices, stocks are tight, and there are less resting orders in the market than usual due to the volatility.  This can create vacuums in the depth of market when support and resistance levels are broker.  The price action on Thursday and today are good examples.

Sunday night should be volatile. Will we get rain this weekend?  What will happen with the tropical storm coming through New Orleans?  How will that change the weather forecasts for the next two weeks?

Another thing to keep an eye on is China.  New hit today that China bought 8 US soybean cargos, the most they have bought from us in the past four months. Is South America out of soybeans already?

This is setting up for a wild summer. Good luck out there and stay calm.  I said this on the podcast but I will put it down in writing now:

* If you trade futures then make sure you have an options for protection. When buying soybeans make sure  you have a put. When selling corn make sure you have a protective call.  If you don’t want to have a protective option then I would suggest only using 25% of your margin and keep the other 75% unused to deal with the extreme volatility.

* If you don’t want to trade futures then I would use call spread and put spreads.  When buying soybeans I would buy call spreads and sell put spreads. If you want to be short I would buy put spreads and sell call spreads.  That goes for spec traders but is also relevant for hedgers.

We all need to know our risk in these types of markets. Everyone looks at the big moves and thing about the potential gains, but it is the risk management that keeps you in the game.  In this type of market the options are the price of admission. If you don’t manage risk you could be out of the game sooner than you thought possible.

Interested in working with Craig Turner for hedging and marketing?  If so

Play Turner’s Take Ag Marketing Podcast Episode 277

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It is June, corn and soybean stocks are tight, and we are in a weather market.  There is a WASDE report this week on June 10th and I don’t think anyone is paying attention to it.  It is all about the weather between now and July 4th.  We have some ideas on price ranges, trading patterns, and how to get through the uncertainty and volatility that will occur this month. Make sure you take a listen to this week’s Turner’s Take Podcast.

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free!  You may also click here to register for Turner’s Take.

Weather Market 

According to the latest 6-10 day forecasts temps will be higher than normal and precipitation will be lower than normal. A lot of the weather services are calling for much of the same between now and July 4th.  A weather market adds premium every day until we see rain in the forecast.

Corn: I like buying the $7/$8 Dec 21 call spread and selling the $5.00/$4.50 put spread. You can get that done under a dime.  Spec traders will be looking for a big weather market. Farmers can use it to sell cash grain into this June and July.

Soybeans: I like buying the $15/$17 Nov 21 call spread and selling the $13/$12 put spread for around 30 cents.  I don’t see a lot of risk right now below $13.  Spec traders get upside exposure and farmers can use the spread to sell into at the elevator.

Interested in working with Craig Turner for hedging and marketing?  If so then click here to open an account.  If you are a speculative or online trader then please click here.

Floors for Farmers

While I am still bullish on the grain markets right now, I know there is a lot of downside risk for farmers on grain not sold or hedged. I don’t think you need a floor for soybeans. Soybeans are going to be tight either way the next marketing year.  I think soybeans are between $12 and $17 all year.  Nov 2021 $12 puts are 7 cents.  If you need a floor you can protect $12 for seven cents.

I feel differently about corn. We could see a few million additional acres and if the weather gets better and we have trend line yields or better, corn could be in the $4s across the board at harvest this fall.

Play Turner’s Take Ag Marketing Podcast Episode 276

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In this week’s podcast we go over the latest news in the grain and oilseed markets.  We also take a look at the May WASDE from last week to get an idea of possible price ranges for old and new crop going forward. Make sure you take a list to Turner’s Take Podcast!

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free!  You may also click here to register for Turner’s Take.

May WASDE 

The May WASDE showed tight stocks for old crop and new crop soybeans.  Even with additional acres or a better than trend line yield, soybeans will most likely be under 200mm bushel ending stocks for new crop. This keeps soybean prices elevated until the next South American harvest in 2022.

Corn is a different story. Adding a few million acres of corn could push new crop ending stocks to a 2.0 billion and prices into the $4s.  A loss of 5 bpa this summer off the national yield could send new crop over $6 and maybe even $7.  When corn is projected to have a 1.5 billion ending stock that means we are at 10% stock to usage. That is right on the line of adequate and tight stocks.  A loss of 500mm bushels (6 bpa) or a gain of 500mm bushels (3mm acres) can have a huge impact on prices.   It is the difference between burdensome stocks (over 2 billion) and very tight stocks (just over 1 billion).

The charts on the bottom of this email show the net change of corn and soybean acres from the March to June report for the past 20 years. Only in 2007 was corn up 3mm acres (soybeans down 2mm) and in 2012 soybeans were up 3mm acres (corn up 1mm).

We haven’t even started to talk about new crop Chinese demand, the shortage of old crop corn in Europe, and the dry conditions in much of China’s top corn producing regions.  We do think more wheat will be used for feed instead of corn but that can’t solve all the balance sheet issues. Good growing weather and more than a couple million acres could send new crop corn into the $4s.  A serious weather threat and yield loss cold send the market much higher.

Interested in working with Craig Turner for hedging and marketing?  If so then click here to open an account.  If you are a speculative or online trader then please click here.

Play Turner’s Take Ag Marketing Podcast Episode 275

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The USDA will release their May WASDE on Wednesday the 12th at 11am central.  The May WASDE tends to be a big report because this is the first time the USDA includes new crop supply and demand tables for new crop.  We go over the industry analyst estimates, what that means for prices, and where we could see some surprises.  The spec trade is very long, prices are high, and we have a long way to go before this new crop is made.  Make sure you take a listen to this week’s Turner’s Take Podcast!

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free!  You may also click here to register for Turner’s Take.

May WASDE Estimates

Below are the industry analyst estimates for US old and new crop endings stocks, World old and new crop ending stocks, and South American production.  Here are a few observations

* Old crop corn at 1.275 is tight and increases to exports and ethanol could be bullish. Bears will argue more wheat is being used for feed over corn so the USDA could have some wiggle room as they add export demand but take away feed demand

* Old crop soybeans will remain tight in the 120 area.  It is difficult to see the soybean numbers changing much given the current environment.

* Old crop wheat could be a little more bullish. We are hearing a lot about wheat for feed in the western corn belt.

* New crop corn at 1.344 is why new crop is so strong.  There is no room for error this summer and a trend line yield starts off at a lofty 179.5.  The USDA will most likely use the acreage number from the March planting intentions report but the trade will price in more acres as planting progresses in the US

* Soybeans are tight year over year.  Soybeans can not lose acres to corn. Soybeans need a 50 bpa national yield or higher.  There is zero room for error with this soybean crop

* South American Brazil corn production is a big wild card. It is not a question of IF the USDA will reduce Brazilian corn production but HOW MUCH.  Most in the industry think it will be 5 to 6mm mt in this report but could ultimately be closer to 10 million mts when it is all said and done

The big risk probably lies to the downside only because the spec side of the market is so long and prices have come up very fast.  Any kind of bearish surprise probably causes a big sell off.  If so I still think the breaks are bought but you never know what the USDA is going to report.  I think the grain and oilseed markets are bullish but we’ve seen some HUGE curveballs from the USDA in the past so trade with caution!  In other words, when it comes to a report like this everyone is swimming at their own risk.

Give me a call if you need some help protection your positions and risk ahead of the report. My number is 312-706-7610 or you can email me at [email protected]

Interested in working with Craig Turner for hedging and marketing?  If so

Play Turner’s Take Ag Marketing Podcast Episode 274

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Earlier this week we sent out an email to take profits on old crop grain and oilseed positions.  US farmers will most likely plant a majority of their corn and soybeans over the next three weeks.  The May 12th WASDE will report new crop supply and demand numbers for the first time this year.  Domestic old crop stocks are tight but the US is overpriced on the global export market. This all points to a big choppy trading range for the next few weeks and we have some idea on how to trade it. We also need to get serious about new crop sales and 2022 hedges. Make sure you take a listen to this week’s Turner’s Take Podcast!

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free!  You may also click here to register for Turner’s Take.

Corn

Dec 2021 corn reversed on Tuesday and we expect a choppy market for the next few weeks.  New crop corn should have a lot of resistance at $5.70 and strong support around $5.20.  Aggressive traders can buy support levels and sell resistance levels. I like selling put spreads if we get to $5.20 and selling call spreads if we get to $5.70.

On the chart below I have a couple of highlighted sections on the chart.  If we dip into the lower yellow area then corn is too cheap based on current ending stock projections. If corn gets to the upper yellow area I think corn is expensive (given there are no big weather threats yet).

This is my expected trading range for the next few weeks.  A weather market can develop in late May and June but the story of the next couple of weeks will most likely be the accelerating pace of corn and soybean planting.

Interested in working with Craig Turner for hedging and marketing?  If so then click here to open an account.  If you are a speculative or online trader then please click here.

Soybeans 

I have the same ideas for soybeans as I do for corn (see the corn section above).  Below $13.00 new crop soybeans get too cheap based on current ending stock projections.  Breaking out over $14 is too expensive without a serious weather threat.  I like selling put spreads on a decline to $13. We’ll look to make cash sale recommendations if new crop rallies past $14.  Nov 2022 soybeans are $12 and considering how ...

Play Turner’s Take Ag Marketing Podcast Episode 273

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New Podcast

The grain markets are on fire. Corn and soybean oil closed limit up today (4/22) and wheat was limit up mid session but couldn’t quite stay at those levels by the close.  We go over why the CBOT is trading this way, what to look for, and how to trade it this spring and summer. Make sure you take a listen to this week’s Turner’s Take Podcast!

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free!  You may also click here to register for Turner’s Take.

Limit Up – Corn

Corn was limit up today lead by a very strong cash market.  End users need coverage between now and harvest and the grain is just not readily available. They have to bid up prices to get the last remaining bushels out of farmer storage.

There is concern about production declines in Brazil (2nd crop corn).  Any exports that Brazil can not fill usually comes back the US.  That could be 5mm mt of corn or 200mm bushels the US might not have to export. We also heard rumors of China looking to buy US corn but we could not verify that today.

Planting is not off to a good start and based on the long term weather reports this spring/summer could be warmer and drier than normal. We have tight old crop stocks, not enough US acres, and if need a record yield just to have adequate stocks next year!!!

No one wants to get short, even farmers who eventually have to sell their grain.  Inflation trade and money moving into the Ag space is a reality.  Seasonally this is a time of year to be long grain (especially when stocks are tight)

Add in all of that and we get a big rally.  Keep in mind May FND is a week away and if the supply is not out there then commercial end users will be buying for delivery. I’m sure there are margin calls and forced liquidation too. Moral of the story is we are in for a wild spring and summer.  Big breaks, big rallies, no place for the faint of heart.

Interested in working with Craig Turner for hedging and marketing?  If so then click here to open an account.  If you are a speculative or online trader then please click here.

Trade Ideas – FILLED

FILLED  – OLD CROP – Bought the July Corn $6.50 calls for 14 cents on 4/20 and sold the $7.

Play Turner’s Take Ag Marketing Podcast Episode 272

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Today we take a look at the macro market, the potential for a big summer rally in the grain markets, and why farmers should look to the OTC markets with myself and StoneX for hedging 2022 crop this summer.  Make sure you take a listen to this week’s Turner’s Take Podcast!

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free!  You may also click here to register for Turner’s Take.

Corn and Soybean Oil Lead CBOT Higher

Corn has been the upside leader lately and that should continue to be the case during a summer weather rally.  Cash corn prices are bullish in the US, setting records in Brazil, near historic highs in China, and the market thinks the USDA needs increase exports and lower ending stocks on the balance sheet.

Soybean oil is getting a boost due to strong demand, tight stocks, and a lower crush is limiting much needed vegetable oil on the domestic and global market.

These markets will be volatile. I still like buying buy call spreads and financing them with short put spreads.  These markets could get wild this spring and summer so it is important to find positions that you can hold onto during extreme moves.

Interested in working with Craig Turner for hedging and marketing?  If so then click here to open an account.  If you are a speculative or online trader then please click here.

Dec 2022 Corn 

I had a few farmers ask me about pricing for Dec 2022 corn.  For farmers who qualify for an OTC account I really like the structured products StoneX has available.  This summer we could see Dec 2022 corn get to $4.80 or higher. Some of the accumulators could price Dec 2022 corn at $5.00 or higher with no knockout.  There are some very interesting ways to hedge 5% tp 10% of 2022 crop in the OTC market with myself and StoneX

Why do I like pricing some Dec 2022 corn this summer?  I think we are going to see a massive expansion in acres next year in the US and around the world. We saw it after 2012/2013 and at these prices I think we see it again next year and into 2023.  Old crop and new crop are bullish and will most likely remain bullish until this year’s crop is made.  There is a possibility the best prices for Dec 2022 happen this summer.

Play Turner’s Take Ag Marketing Podcast Episode 271

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Today we look at what the Planting Intentions report means for potential price moves this summer.  Corn and soybean acres were lower than expected last week.  We think acres will come up but not enough to prevent tight new crop ending stocks.  Weather rallies this spring and summer could be the biggest we’ve seen in years if conditions are hot and dry.  Make sure you take a listen to this week’s Turner’s Take Podcats!

If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free!  You may also click here to register for Turner’s Take.

Spring & Summer Weather Rally Potential

The Planting Intentions report sets up the possibility of big weather rallies this spring and summer. If conditions are hot and dry the US planting and growing season will be challenging.  Below are two supply and demand scenarios for corn and soybeans.  Any loss in yield could send prices higher and the market will be volatile with each change in the weather forecast this season.

I like using options for weather markets this spring and summer.  Futures will be hard to hold onto during the volatility.  Here are some ideas for both old crop and new crop.  Please call me at 312-706-7610 or email [email protected] with questions.  We can always adjust these ideas based on your account, strategies, and risk/reward preferences.

Old Crop Soybean Oil – July Soybean Oil 55/60 bull call spreads are about 1.15 cents.  The 50/47 Put spread is about 1 cent.  You could buy the call spread and sell the put spread for about 10 to 20 ticks. Each tick in bean oil is $6

New Crop Soybeans – Nov Soybean $15 calls are about 24 cents. You could sell the $17 for 8 cents to make is a 16 cent spread for $2 of upside.  The $11.60/$11.00 puts are trading about 12 cents so you pay for most of the call spread by selling a put spread but you do open yourself up to 60 cents of risk.

Old Crop Corn – $6 July Calls are 13 cents.  This is a bit of a flier but if acres don’t increase and we lose 5 to 10 bpa this summer, corn could be well above $6.  The $5.70/$6.20 July call spread is about 11 or 12 cents.  That is a good limited risk way to play old crop corn too.

New Crop Corn – The Dec Corn $5/$6 call spread is about 25 cents.  The $4.40/$4.00 put spread is 13 cents. You could probably be long the call spread and short the put spread for around 12 cents.

Interested in working with Craig Turner for hedging and marketing?  If so then click here to open an account.  If you are a