Play Turner’s Take Podcast Episode 167

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We are now in the first full week of trading in 2019 and the markets are trading higher for the most part.  The US dollar is down and metals are struggling a bit, but the stock market, crude, grains, and livestock are generally higher.  We go over all the major futures market sectors and give our opinions for each in the latest episode!

Macro Markets

The US-China trade talks seem to be going well. The best article I’ve read about it recently is from the South China Morning Post.  This should be supportive for the markets as it is good for US growth, global growth, and US exports.  The US government shutdown is a bearish factor on the markets but many traders are shrugging it off. About 25% of the government is closed but many of the “essential” services are open.  Apparently the CFTC and the USDA are considered “non-essential”.

Natural Gas

March Natural Gas rallied to over $4.00 in Nov and Dec only to come back down to $2.80 support levels.  Winter has been unseasonably warm but we should have colder temperatures in Jan and Feb. The Cullen Outlook highlighted NG this week and I like getting NG long to oat these levels and that gap on the chart looks like a good target.

March Natural Gas

Coffee

Technically it looks like coffee double bottomed and then broke the red trend line.  Fundamentally Brazil and Vietnam are having some production issues and we may see global stock decline this year after years of gains.  I like coffee as long as we stay above the 99 level (blue line below).  A short covering rally combined with better demand and continued weather issues in Brazil has the potential to send coffee to 1.14 and then finally 1.26.

March Coffee

Corn

Below is my corn supply and demand table for old crop and new crop. This is part of my Turner’s Take Ag Marketing service.  Right now we have old crop at 1781mm bushels but I think it can be 1.6 to 1.7 billion when the USDA opens back up and releases the next WASDE.  That should be supportive of old crop.  Corn yield loss in South America has the potential to rally March Corn in the upper $3.80s or lower $3.90s.  At those levels we expect a lot of farm sales as old crop is plentiful in the country and farmers need to make sales.

The next three columns show projections for new crop corn.  The most bullish scenario we have right now is 91mm acres and a 175 yield.  The most bearish is 93mm acres and a 181 yield.  We do this to figure out a realistic price range for 2019 corn.  Traders and hedgers who want to get more in depth about this table and how we trade and hedge around these expectation should give us a call and we can talk about it.  As market conditions change I update the tables and the expected price ranges, so if you are a client at Daniels Trading you should get access to Turner’s Take Ag Marketing.

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