Play Turner’s Take Podcast Episode 164

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FOMC Hikes Rate 0.25%

The FOMC announced rate hikes of 0.25% yesterday, bringing the overnight Fed rate to 2.25% to 2.50%.  The market took this as bearish as they hoped the Fed we ease off interest rate hikes in the face of the stock market correction.  Lost in the bearish mood is the fact the Fed only sees 2 rate increases in 2019, which is less than the 3 to 4 that had been expected.

CNBC | Fed Hikes Rates

If the stock market declines more than 20% from the highs it is consider a bear market.  The S&P futures are about 2480.  We only need to go to 2360 to hit that level.  A recession is when GDP growth declines significantly. I don’t think going from 3% GDP growth to 2% is a recession.  Some economists define a recession as negative GDP growth for 2 consecutive quarters.  Other economist define it based on declines in GDP, inflation, unemployment, manufactures, and retails sales.

It is possible to be in a bear market for stocks while not in a recession.  That can happen when the economy transitions from high growth the low growth.

Emini S&P 500

CRUDE OIL DECLINE CONTINUES

The decline in crude oil continues.  Crude is down $30 in three months!  That is a 40% sell off.  At this point the market is severely oversold and anyone long is trying to get out as best they can. Funds with long positions heading into their year end performance review are not happy one bit.

I think crude stabilizes at some point down here but you have to let the sell off run its course.  This feels like heavy liquidation of long positions.  It does not help that Christmas is Tuesday and the markets are already trading at relative low volumes.

OPEC+ will start production cuts in January.  That should be the natural period when crude stabilizes. For now until New Years I think the volatility continues

Crude Oil

Corn & Soybeans Fill The Gap

Corn and Soybeans are filling the gap they left after the market rallied on confirmation of China buying ag production again from the US. I think we are seeing the “selling the fact” after a very long “buy the rumor” rally.  Corn and soybeans seem to be fairly priced in these area.  We like playing the ranges (buy support/sell resistance) and I like short straddles.

Corn carryout will most likely range between 1.7 and 1.8 billion bushels.  Old crop should range in the $3.60s to $3.90s.  New crop should be $3.90 to $4.10 given those numbers.

At best China buys 10mm mt of soybeans from the US which means old crop stocks can’t get much better than 600mm and a 15% stock-to-usage.  That puts front month soybeans in the high $8s and low $9s with new crop in the mid to high $9s.

CORN

SOYBEANS

 

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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!

While the podcast does not have specific actionable trading recommendations, we do publish them in

Play Turner’s Take Podcast Episode 164

If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes!

FOMC Hikes Rate 0.25%

The FOMC announced rate hikes of 0.25% yesterday, bringing the overnight Fed rate to 2.25% to 2.50%.  The market took this as bearish as they hoped the Fed we ease off interest rate hikes in the face of the stock market correction.  Lost in the bearish mood is the fact the Fed only sees 2 rate increases in 2019, which is less than the 3 to 4 that had been expected.

CNBC | Fed Hikes Rates

If the stock market declines more than 20% from the highs it is consider a bear market.  The S&P futures are about 2480.  We only need to go to 2360 to hit that level.  A recession is when GDP growth declines significantly. I don’t think going from 3% GDP growth to 2% is a recession.  Some economists define a recession as negative GDP growth for 2 consecutive quarters.  Other economist define it based on declines in GDP, inflation, unemployment, manufactures, and retails sales.

It is possible to be in a bear market for stocks while not in a recession.  That can happen when the economy transitions from high growth the low growth.

Emini S&P 500

CRUDE OIL DECLINE CONTINUES

The decline in crude oil continues.  Crude is down $30 in three months!  That is a 40% sell off.  At this point the market is severely oversold and anyone long is trying to get out as best they can. Funds with long positions heading into their year end performance review are not happy one bit.

I think crude stabilizes at some point down here but you have to let the sell off run its course.  This feels like heavy liquidation of long positions.  It does not help that Christmas is Tuesday and the markets are already trading at relative low volumes.

OPEC+ will start production cuts in January.  That should be the natural period when crude stabilizes. For now until New Years I think the volatility continues

Crude Oil

Corn & Soybeans Fill The Gap

Corn and Soybeans are filling the gap they left after the market rallied on confirmation of China buying ag production again from the US. I think we are seeing the “selling the fact” after a very long “buy the rumor” rally.  Corn and soybeans seem to be fairly priced in these area.  We like playing the ranges (buy support/sell resistance) and I like short straddles.

Corn carryout will most likely range between 1.7 and 1.8 billion bushels.  Old crop should range in the $3.60s to $3.90s.  New crop should be $3.90 to $4.10 given those numbers.

At best China buys 10mm mt of soybeans from the US which means old crop stocks can’t get much better than 600mm and a 15% stock-to-usage.  That puts front month soybeans in the high $8s and low $9s with new crop in the mid to high $9s.

CORN

SOYBEANS

 

hbspt.cta.load(2022783, ‘aa656e8e-c64a-469e-93e8-45612ef5d6d9’, {});

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!

While the podcast does not have specific actionable trading recommendations, we do publish them in

Play Turner’s Take Podcast Episode 163

If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes!

China Buying US Soybeans

China bought 1mm mt of soybeans this morning and the market is expecting at least another 1mm mt before the weekend.  2mm mt is just under 80mm bushels.  Assuming this is all in old crop sales, carryout goes from 950 to 870.  There is talk China will eventually buy 5mm mt or just under 200mm bushels. If true and it is all in old crop then ending stocks are about 750.  That is still a large carryout and argues for front month bean prices in the high $8s.  I have heard rumors of a possibility of China buying 8mm mt and also allowing private Chinese companies to by 2mm mt tariffs free.  10mm mt total is almost 400mm bushels. I doubt all of that would be in old crop.  If you think 300mm in old crop and 100mm in new crop, then old crop carryout is 650mm bushels.  At that point $9 soybeans sounds about right.

Farmers should be selling this rally or buying puts.  Speculators should look to sell the rallies after large sales announcements. The balance sheet is improving but global stocks will stay the same.  The South American crop is large and weather has been good.  Once the bullishness of the China trade deal wears off and priced in, I find it hard to get bullish soybeans.  If you look at the chart below the old support line (before soybean tariffs) is now the new resistance line.

NOVEMBER 19 SOYBEANS

Wheat  Breaks Out Higher

SRW Wheat (Chicago) is breaking out higher on the charts.  Cash prices are rising in Russia on the global export market.  If China buys some wheat from the US we can go even higher.  Below is a report on Paris wheat trading at 8 week highs too.  We have been waiting for global stocks to get tight, especially for high quality wheat. It looks like we are finally here and the US should continue to be competitive on the global export market.

REUTERS | Paris Wheat Hits 8-Week High, Spurred By Rising Russian Prices

MARCH 19 SRW WHEAT

Corn Testing A Major Resistance Level

Corn is testing a major resistance level at $3.88.  Ending stocks are projected to be around 1.8 billion.  There are some rumors going around China may buy 5mm mt of corn from the US as a result of the new trade deal. That is just under 200mm bushels.  If that happens in old crop it brings ending stocks to 1.6 billion. That will take March corn over $3.88 and into the $4s.  If not then I think this resistance level holds for the time being.  I still like short straddles in corn and playing the ranges.  Farmers should start looking to price new crop above $4.05 and have some orders to sell at $4.15 and $4.25 incase we get a spike due to the Chinese trade deal.

CONTINUOS CORN

Crude Oil Range Bound

We feel crude oil will be range bound and spend a majority of it’s time between $50 and $60.  The bears will point to a slowing US and global economy, but we are not in recession, just slower growth.  The bulls will point to OPEC cutting production, but it will only be enough to stabilize prices until global growth picks up.  We are going to trade crude as a range bound market.  Buy support, sell resistance, sell option spreads at the edge of the ranges, and if we are around the middle of the range we might right straddles.

CONTINUOS CRUDE OIL

hbspt.cta.load(2022783, ‘aa656e8e-c64a-469e-93e8-45612ef5d6d9’, {});

Play Turner’s Take Podcast Episode 163

If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes!

China Buying US Soybeans

China bought 1mm mt of soybeans this morning and the market is expecting at least another 1mm mt before the weekend.  2mm mt is just under 80mm bushels.  Assuming this is all in old crop sales, carryout goes from 950 to 870.  There is talk China will eventually buy 5mm mt or just under 200mm bushels. If true and it is all in old crop then ending stocks are about 750.  That is still a large carryout and argues for front month bean prices in the high $8s.  I have heard rumors of a possibility of China buying 8mm mt and also allowing private Chinese companies to by 2mm mt tariffs free.  10mm mt total is almost 400mm bushels. I doubt all of that would be in old crop.  If you think 300mm in old crop and 100mm in new crop, then old crop carryout is 650mm bushels.  At that point $9 soybeans sounds about right.

Farmers should be selling this rally or buying puts.  Speculators should look to sell the rallies after large sales announcements. The balance sheet is improving but global stocks will stay the same.  The South American crop is large and weather has been good.  Once the bullishness of the China trade deal wears off and priced in, I find it hard to get bullish soybeans.  If you look at the chart below the old support line (before soybean tariffs) is now the new resistance line.

NOVEMBER 19 SOYBEANS

Wheat  Breaks Out Higher

SRW Wheat (Chicago) is breaking out higher on the charts.  Cash prices are rising in Russia on the global export market.  If China buys some wheat from the US we can go even higher.  Below is a report on Paris wheat trading at 8 week highs too.  We have been waiting for global stocks to get tight, especially for high quality wheat. It looks like we are finally here and the US should continue to be competitive on the global export market.

REUTERS | Paris Wheat Hits 8-Week High, Spurred By Rising Russian Prices

MARCH 19 SRW WHEAT

Corn Testing A Major Resistance Level

Corn is testing a major resistance level at $3.88.  Ending stocks are projected to be around 1.8 billion.  There are some rumors going around China may buy 5mm mt of corn from the US as a result of the new trade deal. That is just under 200mm bushels.  If that happens in old crop it brings ending stocks to 1.6 billion. That will take March corn over $3.88 and into the $4s.  If not then I think this resistance level holds for the time being.  I still like short straddles in corn and playing the ranges.  Farmers should start looking to price new crop above $4.05 and have some orders to sell at $4.15 and $4.25 incase we get a spike due to the Chinese trade deal.

CONTINUOS CORN

Crude Oil Range Bound

We feel crude oil will be range bound and spend a majority of it’s time between $50 and $60.  The bears will point to a slowing US and global economy, but we are not in recession, just slower growth.  The bulls will point to OPEC cutting production, but it will only be enough to stabilize prices until global growth picks up.  We are going to trade crude as a range bound market.  Buy support, sell resistance, sell option spreads at the edge of the ranges, and if we are around the middle of the range we might right straddles.

CONTINUOS CRUDE OIL

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Play Turner’s Take Podcast Episode 162

If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes!

G20 | US & China Reach Trade Truce

The US and China reached a trade truce over the weekend at the G20 meeting.  For now the market is cautiously optimistic about the deal.  Shorts covered today but we did not see new buying.  For the markets to rally further we need to see real export demand come to the US from  China

G20 Meeting | US and China Reach Trade Truce

Today Larry Kudlow said they expect fast progress on the trade deal.  You may read a summary of the expected changes and developments here: Kudlow Says Progress in US-China trade will happen “very quickly”

OPEC+ | Russia and Saudi Arabia Make a Deal

The latest reports out of the G20 say Russia and Saudi Arabia agreed to a renew oil output cuts.  There is an OPEC meeting later this week and we will know then if this is true or not.  Crude is up $2.00 and the spreads are trading bullishly, but with bearish macro fundamentals as a headwind, the market will wait for OPEC to make an announcement before going too much higher.

hbspt.cta.load(2022783, ‘aa656e8e-c64a-469e-93e8-45612ef5d6d9’, {});

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!

While the podcast does not have specific actionable trading recommendations, we do publish them in Turner’s Take Market Alert for spec traders and Turner’s Take Ag Marketing for hedgers. Want to know what to look for in the commodity futures markets? Take a listen to Turner’s Take podcast!

Craig Turner – Commodity Futures Broker

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 Podcast Episode 162

If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes!

G20 | US & China Reach Trade Truce

The US and China reached a trade truce over the weekend at the G20 meeting.  For now the market is cautiously optimistic about the deal.  Shorts covered today but we did not see new buying.  For the markets to rally further we need to see real export demand come to the US from  China

G20 Meeting | US and China Reach Trade Truce

Today Larry Kudlow said they expect fast progress on the trade deal.  You may read a summary of the expected changes and developments here: Kudlow Says Progress in US-China trade will happen “very quickly”

OPEC+ | Russia and Saudi Arabia Make a Deal

The latest reports out of the G20 say Russia and Saudi Arabia agreed to a renew oil output cuts.  There is an OPEC meeting later this week and we will know then if this is true or not.  Crude is up $2.00 and the spreads are trading bullishly, but with bearish macro fundamentals as a headwind, the market will wait for OPEC to make an announcement before going too much higher.

hbspt.cta.load(2022783, ‘aa656e8e-c64a-469e-93e8-45612ef5d6d9’, {});

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!

While the podcast does not have specific actionable trading recommendations, we do publish them in Turner’s Take Market Alert for spec traders and Turner’s Take Ag Marketing for hedgers. Want to know what to look for in the commodity futures markets? Take a listen to Turner’s Take podcast!

Craig Turner – Commodity Futures Broker

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 Podcast Episode 161

If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes!

G20 Meeting is 11/30-12/1

The G20 meeting is Friday and Saturday in Argentina.  The G20 is a group of leading economic nations who get together to address pressing economic issues.  During this meeting nations will get together who need to address specific issues just between them.  There are two of these discussions that are of particular note to our markets.

US / China Trade Negotiations

The US and China are currently talking “on all levels” about a trade ahead of the G20.  Their is a very interesting story from the South China Morning Post that thinks there will be a truce offered this weekend and if accepted the US and China will be able to start ironing out their differences.  This trade war doesn’t do the US or China any good. It is in the best interest of both parties to get something done.  If there is an announcement over the weekend about the US and China agreeing in principal to work out a trade deal in good faith, then the Sunday open should gap open for the CBOT contracts and probably energy and equities too.

I think soybeans and lean hogs will benefit most from US and Chinese trade relations going back to normal.  I like the Feb vs April Hogs and July vs Nov Soybean spreads if this deal gets done.

Feb vs April Lean Hogs

July vs Nov Soybeans

Saudi Arabia, Russia, and OPEC Production Cuts

Saudi Arabia and Russia will both be at the G20.  Dec 6 and 7 there is an OPEC meeting.  Saudi Arabia and Russia will most likely talk about potential crude oil production cuts at the G20 and if they agree on something it will be announced at the Dec OPEC meeting the following week.  It is probably in the best interest of these nations to limit production in the near term now that crude is down 30%!

The funds had been net long crude for years but now are relatively flat.  Money flow could sent crude lower or higher. If OPEC cuts and the US/China trade conflict gets resolved, you have to think that is bullish for crude.  If OPEC does not cut and the US/China can’t get a deal, crude probably makes the next leg lower.  I like the June vs Dec Crude futures spread to trade crude for the next couple of weeks.

June vs Dec Crude

hbspt.cta.load(2022783, ‘fc5d0ce0-32ed-4c69-9b75-60e3b557c931’, {});

hbspt.cta.load(2022783, ‘aa656e8e-c64a-469e-93e8-45612ef5d6d9’, {});

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!

While the podcast does not have specific actionable trading recommendations, we do publish them in Turner’s Take Market Alert for spec traders and

Play Turner’s Take Podcast Episode 161

If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes!

G20 Meeting is 11/30-12/1

The G20 meeting is Friday and Saturday in Argentina.  The G20 is a group of leading economic nations who get together to address pressing economic issues.  During this meeting nations will get together who need to address specific issues just between them.  There are two of these discussions that are of particular note to our markets.

US / China Trade Negotiations

The US and China are currently talking “on all levels” about a trade ahead of the G20.  Their is a very interesting story from the South China Morning Post that thinks there will be a truce offered this weekend and if accepted the US and China will be able to start ironing out their differences.  This trade war doesn’t do the US or China any good. It is in the best interest of both parties to get something done.  If there is an announcement over the weekend about the US and China agreeing in principal to work out a trade deal in good faith, then the Sunday open should gap open for the CBOT contracts and probably energy and equities too.

I think soybeans and lean hogs will benefit most from US and Chinese trade relations going back to normal.  I like the Feb vs April Hogs and July vs Nov Soybean spreads if this deal gets done.

Feb vs April Lean Hogs

July vs Nov Soybeans

Saudi Arabia, Russia, and OPEC Production Cuts

Saudi Arabia and Russia will both be at the G20.  Dec 6 and 7 there is an OPEC meeting.  Saudi Arabia and Russia will most likely talk about potential crude oil production cuts at the G20 and if they agree on something it will be announced at the Dec OPEC meeting the following week.  It is probably in the best interest of these nations to limit production in the near term now that crude is down 30%!

The funds had been net long crude for years but now are relatively flat.  Money flow could sent crude lower or higher. If OPEC cuts and the US/China trade conflict gets resolved, you have to think that is bullish for crude.  If OPEC does not cut and the US/China can’t get a deal, crude probably makes the next leg lower.  I like the June vs Dec Crude futures spread to trade crude for the next couple of weeks.

June vs Dec Crude

hbspt.cta.load(2022783, ‘fc5d0ce0-32ed-4c69-9b75-60e3b557c931’, {});

hbspt.cta.load(2022783, ‘aa656e8e-c64a-469e-93e8-45612ef5d6d9’, {});

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!

While the podcast does not have specific actionable trading recommendations, we do publish them in Turner’s Take Market Alert for spec traders and

Play Turner’s Take Podcast Episode 160

If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes!

Happy Thanksgiving!

I know I am six days early but I will be out of the office next week. I am taking the wife and four kids to see my sister’s family in Washington, DC. My mother also moved to DC and now lives close to my sister so it should be a nice time. I’m looking forward to the International Spy Museum.

In this week’s podcast we go over the big movement in Natural Gas. I talk about some of the special podcasts I plan to do, like trading in limit markets, in-depth looks at the spread markets, and many more. So be on the look out for that! We finish up with the grain and livestock markets.

hbspt.cta.load(2022783, 'fc5d0ce0-32ed-4c69-9b75-60e3b557c931', {});

Soybeans – Trump Says the US May Not Need More Tariffs on China

The big news today was President Trump saying the US may not need more tariffs on China. The market has already put a good bit of “trade deal premium” into soybeans and as long as the side keep talking that will support soybeans. If a deal with China gets done in last 2018 or early 2019 you have to think carryout will be reduced to 600mm and prices should be in the low $9s. If we plant only 83 or 84 mm acre next year then we can finally get back to $10.

There are two charts below. The first is Jan 19 Soybeans. The bottom zone is the most likely range of prices for soybeans while the US and China work out a trade deal. When a deal gets done the carryout will be at best 600mm and it hard to see soybeans above $9.50. The top zone is where I see prices with a US/China trade deal PLUS reduced new crop US soybean acres. We need to reduce acres by 5 million or so just to get to carryouts around 400mm (under 10% stocks to usage). At that point soybeans can trade above $10.

The second chart is July vs Nov soybeans. This is the spread I recommend to the bulls. Owning futures is risky and the options are expensive. July/Nov should be bullish when we get a trade deal and if we have less acres next year.

Jan 19 Soybeans

July 19 vs Nov 19 Soybeans

hbspt.cta.load(2022783, 'aa656e8e-c64a-469e-93e8-45612ef5d6d9', {});

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!

While the podcast does not have specific actionable trading recommendations, we do publish them in Turner’s Take Market Alert for spec traders and Turner’s Take Ag Marketing for hedgers. Want to know what to look for in the commodity futures markets? Take a listen to Turner’s Take podcast!

Craig Turner – Commodity Futures Broker

Turner’s Take Ag Marketing:

Play Turner’s Take Podcast Episode 160

If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes!

Happy Thanksgiving!

I know I am six days early but I will be out of the office next week. I am taking the wife and four kids to see my sister’s family in Washington, DC. My mother also moved to DC and now lives close to my sister so it should be a nice time. I’m looking forward to the International Spy Museum.

In this week’s podcast we go over the big movement in Natural Gas. I talk about some of the special podcasts I plan to do, like trading in limit markets, in-depth looks at the spread markets, and many more. So be on the look out for that! We finish up with the grain and livestock markets.

hbspt.cta.load(2022783, 'fc5d0ce0-32ed-4c69-9b75-60e3b557c931', {});

Soybeans – Trump Says the US May Not Need More Tariffs on China

The big news today was President Trump saying the US may not need more tariffs on China. The market has already put a good bit of “trade deal premium” into soybeans and as long as the side keep talking that will support soybeans. If a deal with China gets done in last 2018 or early 2019 you have to think carryout will be reduced to 600mm and prices should be in the low $9s. If we plant only 83 or 84 mm acre next year then we can finally get back to $10.

There are two charts below. The first is Jan 19 Soybeans. The bottom zone is the most likely range of prices for soybeans while the US and China work out a trade deal. When a deal gets done the carryout will be at best 600mm and it hard to see soybeans above $9.50. The top zone is where I see prices with a US/China trade deal PLUS reduced new crop US soybean acres. We need to reduce acres by 5 million or so just to get to carryouts around 400mm (under 10% stocks to usage). At that point soybeans can trade above $10.

The second chart is July vs Nov soybeans. This is the spread I recommend to the bulls. Owning futures is risky and the options are expensive. July/Nov should be bullish when we get a trade deal and if we have less acres next year.

Jan 19 Soybeans

July 19 vs Nov 19 Soybeans

hbspt.cta.load(2022783, 'aa656e8e-c64a-469e-93e8-45612ef5d6d9', {});

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!

While the podcast does not have specific actionable trading recommendations, we do publish them in Turner’s Take Market Alert for spec traders and Turner’s Take Ag Marketing for hedgers. Want to know what to look for in the commodity futures markets? Take a listen to Turner’s Take podcast!

Craig Turner – Commodity Futures Broker

Turner’s Take Ag Marketing: