Play Turner’s Take Podcast Episode 193

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Over 100 of the S&P 500 corporations have reported earnings and 80% of them have beat estimates.  The Fed is expected to cut interest rates by a quarter point next week.  This should keep the stock market and macro markets well supported in the near term.  The grain markets feel range bound until the Aug 12 WASDE report.  It is hard to see corn break $4.20 and soybean break $8.90 ahead of such a big report.  We have some idea on bear spreading old crop corn, why we like new crop calls heading into the WASDE, and what kind of numbers it takes for the WASDE to take corn to the next level.  Make sure you take a listen to Turner’s Take Podcast!

Supply Bulls vs Demand Bears

In the podcast I go over what the supply bulls and demand bears are fighting about.  On the supply side the US could be at a 12.25 billion production level for corn and 3.5 billion for soybeans.  If corn production is 12.25 billion (78mm acres harvests X 160 yield) then demand needs to be rationed 400 to 500mm to make sure ending stocks are around 1 billion.  The supply bulls argue corn needs to go higher for price rationing.

The demand bears are saying the world has plenty of corn.  Major exporters have excess stocks of at least 16mm mts (over 600mm bushels). They also argue some feed demand can be switched from corn to wheat for swine and poultry. Ethanol plants will most likely lower production the longer corn is above $4 and crude is below $60.

As for soybeans, production of 3.6 billion would normally be very bullish but we have a 1 billion old crop carry in to help cushion the crop losses.  World exporters have plenty of soybeans on hand.  The US/China trade war is bearish for soybeans as well as the ASF break out.  If it weren’t for this year’s late planting soybeans could be at $8 and threatening to trade a $7 handle.

The August WASDE is going to be a HUGE report.  We will see the updated acres report, changes in yields, and the USDA could adjust demand too.  For reports like these I like short dated options and I’ll have recommendations for both corn and soybeans as we get closer to the report.

Dec Corn

Nov Soybeans

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

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