Play Turner’s Take Ag Marketing Podcast Episode 266

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This week we go over our thoughts on the WASDE, where prices can go from here, and why we are changing our thoughts on old crop corn.  We are still bullish soybeans and the grain markets in general, but the USDA threw some cold water on the corn market and we can’t hide from it.  Make sure you take a listen to Turner’s Take Podcast!

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Corn

Here’s the deal. I want to be bullish on old crop corn but there is something in that WASDE report yesterday that we have to address.  The USDA acknowledged China’s increased corn demand and only increased exports by 50mm bushels.  It looks like they expect some traditional buyers of US corn will move to S. America, Ukraine, or S. Africa as China buys more from the US.  The opposite happened in soybeans when China left for S.America beans during the tariff years.  The US lost China but gained a lot of the traditional business that usually goes to Brazil.

I think old crop corn is now range bound between the high $4s and mid $5s until we know more about the S. American crop and new crop acres.  Old crop still has potential to rally but it will most likely be from a weather rally.  Corn prices around the world are high.  China probably does not have all the corn they say they have in storage.  Demand is strong for US corn.  All three of those things are true but you can’t fight the USDA.  You can but it is usually a losing effort.

I put out a rec to sell old crop and new crop corn this morning.  Even though we traded at our price (and higher) I am not going to count it as a sale yet in the newsletter.  The market moved too fast for everyone to take advantage.  I’ll wait until we trade through those prices again to take credit.

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

The USDA put old crop at the 120mm bushels, which is close enough to pipeline minimum stocks.  Any rally for old crop to $14 will most likely be lead by a US spring/summer weather rally.

Play Turner’s Take Ag Marketing Podcast Episode 265

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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.

This week we go over the latest news in the stocks market and why we like crude oil to go higher this year.  We also look at the grain markets and talk about the Feb WASDE next week.  We continue to like crude oil, KC wheat over Chi wheat, and the bull story in the grain markets is not over.  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.

Turner’s Take Podcast

If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes! Craig Turner – Commodity Futures Broker 312-706-7610 [email protected] Turner’s Take Ag Marketing: https://www.turnerstakeag.com Turner’s Take Spec: https://www.turnerstake.com Twitter: @Turners_Take Contact Craig Turner

Subscribe to Turner’s Take Newsletter & Podcast

Turner’s Take Newsletter & Podcast – Turner’s Take is a complimentary weekly market commentary newsletter that covers the Grain, Livestock and Energy futures spread markets using fundamental, technical and seasonal analysis.

Play Turner’s Take Ag Marketing Podcast Episode 264

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This week we go over the GameStop story in the equity markets, the possible bull market in energy for 2021, and how we are positioning ourselves in the grain markets.  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.

GME Short Squeeze

The big story this week in the financial press is GameStop and the short squeeze retail traders are putting on professional hedge fund mangers. I’ll be shocked if this event is not made into a documentary or movie some day.  If you are not up to speed on the story please click here for a good summary from CNBC.

I think the GameStop situation is a good reminder that even the pros need to have a good risk management strategy.  If you are going to sell calls or short the futures, a stop or farther out long call is a good strategy against a black swan event.  The same goes for long positions and short puts in leveraged markets. I have been talking a lot about replacing long futures with long calls or call spreads and short put spreads.  It just makes the risk management a lot easier when you know you have a fixed risk on a position.

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 Outlook

When a new president and administration comes in to the presidency, policies are expected to change.  Energy is a great example.  Keystone has been cancelled, energy production leasing on public land will be stopped, and the government is going to get tougher on fracking.  Green energy policies will try to make up for the difference in production but I highly doubt it will be 1:1 for replacement.  Crude was in the mid to high 40s around the election and now it is trading in the low $50s.

Supply and production capacity is likely to take a hit on the new energy policy.  Economic growth and energy demand is likely to expand this spring and summer.

Play Turner’s Take Ag Marketing Podcast Episode 263

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Today we take a deep dive into soybeans and where we think old crop and new crop prices could be going.  We also talk about soybean oil, corn, and the KC vs Chicago wheat spread.  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.

Soybeans

We are still bullish soybeans but our range remains $12.00 to $15.50 based on the current carryout estimates.  Rains are falling in South America and that should help stabilize the crop.  The correction in prices has lead to greater export demand.  Time will tell if Arg and Brazil have the beans or not.  If production is lower this season we could see soybeans at $15 later this winter or early spring.

Below is my supply and demand table for old crop and new crop.  For new crop we are estimating 91mm acre and 50.5 bpa.  At those levels the US new crop production equals the total usage.  Soybean stocks are still around 140mm bushels and a 3% stock/usage ratio.  The bull market in soybeans should be a two year story at minimum.

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.

Soybean Oil

Below is a chart of annual global vegetable oil stock/use and soybean oil highs dating back to 2006.  For soybean oil prices I rounded to the nearest cent.  The point of the table below is to show how global vegetable oil usage has inelastic demand. It doesn’t seem to matter what vegetable prices are any given year.  Demand has grown year-over-year since 2006.  It grew during the drought years. It grew during the Chinese ASF and tariffs years.  Demand is expected to grow this year and most likely next year too.

Moral of the story is global vegetable oil is in tight supply.  Soybeans are in tight supply.  In 2008 soybean oil traded as high as 70 cents/lb.  In 2011 to 2013 period soybean oil was consistently in the 50s.  We think price go back to the 50s this year and next year until global soybean supplies can be build back up to adequate levels.

Play Turner’s Take Ag Marketing Podcast Episode 262

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The January WASDE was bullish across the board for the grain markets.  Soybeans, corn and wheat all closed higher. Corn finished the day limit up. In this podcast we take a look at the numbers and what we think it means for old crop and new crop.  Below we have our updated supply and demand tables a few trade ideas.  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.

Supply and Demand Tables

CORN

Below are my updated supply and demand tables for both corn and soybeans.  The columns on the left are old crop per the USDA report yesterday.  The middle column is my estimates for old crop.  The right column is for new crop.

We see corn ending stocks coming down to 1.3 billion bushels. This justifies corn prices at current levels.  My target for now is $5.50 old crop.  If we have weather issues this spring/summer in the US I can make a case for $6 old crop at some point.  That in turn could bring new crop to $5.

We’ll hold our current old crop positions.  I am getting a lot of calls about marketing new crop.  If you take a look at the new crop column, we estimate 92mm acres and a trend line 180.5 bpa. Personally, I think 180.5 is a lot to ask for considering it is dry in the Midwest, La Nina could continue into the spring and bring drier and hotter conditions, and the acres the US adds on will tend to have yields below the national average.

New crop corn should stay above $4 all marketing year.  A carryout of 1.5 billion bushels is right on the line of being adequate or tight.  Odds are the production number is more likely to go lower than higher.  It is hard to argue for $5 or higher in new crop with out serious weather issues this summer.

For farmers looking to start marketing and hedging new crop, I like the following as a spread

* Buy the Dec 2021 Corn $5.00 Call

* Sell the Dec 2021 Corn $6.00 Call

* Sell the Dec 2021 Corn $4.00 Put

We were doing these today for around 2 cents and margin was around $650.  Farmers who want to start pricing corn for 2020 can use this as a re-ownership strategy. I also like it a lot as a courage option spread for future sales.  If you put this option spread on you can then sell new crop on the rallies this spring/summer and still have a lot of upside left.  

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

Play Turner’s Take Ag Marketing Podcast Episode 261

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The CBOT rally refuses to stop and we have the Jan WASDE next week (Jan 12th) at 11 am.  Back in 2007 to 2013 I think all but one of the Jan WASDE reports resulted in limit move in either corn, wheat or soybeans. If the USDA throws a big curve ball at the market I would not be surprised to see a limit move next week.  In this podcast we go over why we are taking some profits heading into the WASDE and what we think about old crop and new crop prices going forward.  I also take a look at our supply and demand tables for both old crop and new crop.  The podcast ran a little long this week but we had a lot to go over.  Make sure you take a listen to our latest 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.

Supply and Demand Tables

Below are my latest tables for corn and soybeans.  I am assuming we plant 230mm acres of corn + wheat + soybeans this year. That would be the second highest total in the past 20 years.  Only 2014 would be higher after years of high grain prices.  If wheat gets 46mm acres then corn and soybeans have to split 184mm acres.  We’ve decided to split it evenly as most farmers I talk to see both corn and soybeans as attractive crops to plant.  This number can change but you have to start somewhere.

Corn – I think exports go higher and old crop production comes down.  The carryout will be around 1.4 t o1.5 billion. That justifies corn in the mid to high $4s.  If Argentina continues to lose production (exportable bushels) then old crop can break into the low $5s.  The old high from 2014 is around $5.25 and then $5.70 from 2013.

If new crop acres are “only” 92mm and we have a trend line yield around 180 (big number for so many acres), then we only produce as much as we use for new crop.  Stocks are still around 1.6 billion. That means there is no room for error this spring and summer for US production.  Planting and growing weather rallies should be volatile.

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 260

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As Gordon Gecko said in Wall Street, “if you’re not inside, you’re outside”.  The price action today in corn and soybeans reminded me of that famous scene.  There was not much new in the press or from the USDA.  Weather forecasts have not changed much and it looks like the workers strike in Argentina is coming to a conclusion.

For those of us who have been around the block a few times, we’ve seen this kind of price action before. This is a classic price rationing rally.  The world and US corn and soybean stocks are getting tighter.  Weather in Argentina and Southern Brazil have been dry and now hot.  We are getting to the point where crop conditions will only get worse or some acres just won’t get planted. Unless Arg and S. Brazil get soaking rains in the next couple of weeks (which are not in the forecast) then production will be lower in a significant way.

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We are now in a price rationing market and it is just a matter of time before soybeans are $13 (beans in the teens) and we could even make a run at $14.  The big surprise for me is corn as my target was $4.60 for March and we are now beyond that.  If old crop soybeans can hit $13.50 or $14 then old crop corn can go to $5.

Current carryout projections for soybeans already suggests $13 soybeans and that is without reducing South American production.  Corn basis in the US is getting tighter, exports are strong, and US corn is still a decent value for feed grain on the global export market.

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

The market now has two jobs to do for soybeans and corn

#1 – price old crop as high as necessary to curb demand

#2 – price new crop as high as necessary to increase acres this spring

If you want to know more about my thoughts on corn and soybeans, then take a listen to this week’s Turner’s Take Podcast!!!

About Turner’s Take Podcast and Newsletter

If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes! Craig Turner – Commodity Futures Broker 312-706-7610 [email protected] Turner’s Take Ag Marketing: https://www.turnerstakeag.com Turner’s Take Spec: https://www.turnerstake.com Twitter: @Turners_Take Contact Craig Turner

Play Turner’s Take Ag Marketing Podcast Episode 258

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Merry Christmas!  The markets are open half day tomorrow, most close between noon and 12:45pm central time.  The office will be closed by 1pm on Christmas Eve.  Markets will open back up on Sunday night.  We will be closed again on Friday, Jan 1 for New Years Day.  New Years Eve is a full trading day.  Please click here for the full holiday market hour schedule.  .

In today’s podcast we go over the macro markets, corn, and soybeans.  We talk about how farmers and speculators can get some long exposure in these markets and why we are bullish for 2021.  Make sure you take a listen 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.

Grain & Oilseed

I talked on the podcast on how to get long corn and soybeans for 2021.  The idea is the same for both.  We want to buy call spreads and sell puts to finance.  We don’t see July Soybeans trading below $11 or July corn below $4 anytime soon.  There will be breaks in these markets and if we see soybeans pull back 30 to 50 cents, or corn 15 to 20 cents, we will be using these strategies for both hedgers and spec traders.

For spec traders we want to get long corn and beans as there is still a lot of upside potential in 2021 between now and July.  For farmers there are two plays going on there.  Many farmers I know sold a lot of soybeans around harvest and stored corn on farm.  For farmers looking to re-own some soybeans, we will be looking for the pullback to buy the call spreads and sell a put.  It will be a nice way to get back into soybeans.

For corn we buy the call spreads and sell the puts as a “courage call” play.  It think corn can go higher this spring and summer.  Farmers will hold onto their crop and if prices do get in the high $4s they will be a lot of uncertainty of when to sell.  It is going to be a whole lot easier to sell cash if you already have the calls and call spreads in the hedge account so as you sell the cash corn you are still long the board.

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

As for what spreads we put on, it all depends on what the market gives us. Right now I’m looking at buying the $5 July call, selling the $6,and selling the $4 put.  The idea is to have the call spread in place in case we trade into the high $4s this spring/summer.  Farmers can pull the trigger with confidence on cash sales at that point and still be long the board.  I like the short $4 put because I don’t see July corn going below $4 given the current carryout, likely S. American production issues, high prices around the world, the fight for acres we are going to see in the US between corn and soybeans.  If we get a big pullback in corn I’ll adjust the the call spread lower and still write the $4 for financing.

For soybeans we need a pullback. We can get a 30 to 50 cent pullback over the course of ...

Play Turner’s Take Ag Marketing Podcast Episode 257

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Goldman Sachs is calling for a long lasting commodity bull market that will benefit energy, metals, and agriculture.  We are bullish on corn, the soybean complex, and winter wheat. The US will be issuing more debt for stimulus in the aftermath of the coronavirus shutdowns the the rest of the world’s central banks and governments will most likely follow suit.  Ag and the rest of the commodity markets look bright for 2021.  If you want to hear more then 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.

Secular Commodity Bull Market

Goldman Sach’s global head of commodity research, Jeffrey Currie, is predicting a long lasting bull market in most commodities.  Crude Oil is breaking out on the charts after nine months of lower production and under investment.  Copper is strong as emerging markets and China find demand in a post COVID economy.  Strong feed demand is supporting corn and the oilseed complex.  Combine economic growth with a weaker USD due to stimulus and new government debt and commodity prices could be on the upswing for years.  You can read more in the link below:

S&P Global Platts | Goldman Sachs’ Currie Predicts Long Lasting Commodity Bull Market

Goldman has a $65 target on crude oil by the end of 2021.  That would match the highs from Dec 2019, right before COVID started to become a concern.  Below is a continuous chart of crude oil with the $65 price target.  A move from $48 to $65 is $17 dollars.  That is $17,000 in the standard 1000 barrel contract or $8,500 in the mini 500 barrel contract.

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Continuous Crude Oil Daily Chart

Corn

US corn is the cheapest feed grain on the global export market.  Below is a chart of US corn vs Matif Maize (Europe) and US Corn vs Black Sea Corn (Ukraine).  US corn at $4.20 is about $210/mt.  Black Sea corn is $230/mt or $4.60/bushel.  Matif is $250/mt or $5.00 per bushel.  US corn is much cheaper than Europe and the Black Sea.  US corn should have strong demand until the South American harvest, At a 1.7 billion to 1.5 billion carryout and superior export price competitiveness, corn will be supported at $4.00 across the board.  A strong demand rally or weather issues in S. America this winter or the US this spring/summer could send old crop to $4.60.

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

Play Turner’s Take Ag Marketing Podcast Episode 256

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The December WASDE was neutral for corn and soybeans and moderately bullish for wheat. The corn balance sheet was unchanged while the soybean crush was increased 15mm bushels bringing ending stocks to 175mm.  We view this report as supportive for all the major grain and oilseed markets.  If you want to know more then 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.

WASDE

Pre report soybeans were up 15 cents as traders with short positions feared the USDA could surprise the market and increase exports.  The USDA only increased the crush by 15mm bushels and soybean prices came back down by the close.  The corn balance sheet was unchanged while wheat got tighter, lead by a 5mm mt decrease in global stocks.

This report was neutral but will be viewed as supportive for elevated prices in corn, soybeans and wheat.  The market will now focus on S. American weather and daily export announcements until it is time to anticipate the Jan 2021 WASDE. Below is a good summary of the report today

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

Soybeans

Below we have two charts to show how tight soybeans are this year in the US and around the world. The first is US farm price of soybeans vs the stock/use ratio.  US soybean stock/use is now 3.86%.  If stocks stay this tight or get tighter the chart below suggest soybeans can trade $13 or higher.

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

This chart shows the three major exporter carry outs vs their stock/use ratios.  Things are going to get real tight not just in the US but in the global exporting market too!  If you want ideas on how to get long soybeans before the January 2021 WASDE please call or email me. My number is 312-706-7610 and email is [email protected] 

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

 

About Turner’s Take Podcast and Newsletter

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