Play Turner’s Take Podcast Episode 160

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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.

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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

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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 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

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