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The USDA released their Oct 2019 WASDE report today and it was bullish soybeans but bearish corn.  We spend much of the podcast going over what this means for prices in the near term. I think front month corn can trade between $3.60 and $4.00.  We think soybeans can trade between $9.00 and $9.50.  For an in-depth look into today’s report make sure you take a listen to Turner’s Take Podcast!

Corn 

The USDA held corn production steady as harvested acres came down 200K and yield went up 0.2 bpa.  Old crop stocks came down over 300mm (expected) but demand also suffered in exports and ethanol.  The trade was looking for new crop ending stocks to be 1.7 to 1.8 billion.  It is 1.929 billion and corn sold off 14 cents, closing at $3.8025.

The bulls think production is coming down.  At best we get a 165 yield in Nov, but I can’t see the USDA getting any more aggressive. That means rallies are capped at $3.95 until the Nov WASDE.  The only way we break out higher is if reported yields drop significantly and/or S. Am becomes very dry.

Below are my scenarios for corn. I do think the corn crop gets smaller but the potential for a rally might be lower now.  I get the feeling we really will not know the real yield number until January.  In the mean time we like buying the breaks for the spot months while using rallies to sell the deferred months for 2020 and 2021.

Corn Supply & Demand Scenarios

Soybeans

The report for soybeans was bullish.  Old crop stock came down, harvested acres, and yield.  Demand increased a little in the Crush.  This leaves ending stocks at 460mm bushels, which is adequate.  I think soybeans goes to $9.50 in the front month if the market thinks we are at a 46 yield.  It can go to $10 or higher if the market thinks soybeans is sub 45. Stay tuned!

I like being long the spot month.  I also like using the rallies to hedge for 2020 and 2021.  For soybeans to rally we need corn and wheat to stabilize. I expect that to happen tomorrow.  Soybean yields from the field have been disappointing.  China wants to buy pork and beans (in that order) and that could be good for demand.  I think soybeans can rally next week.

Soybean Supply & Demand Scenarios

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Craig Turner – Commodity Futures Broker

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