News & commentary on the USDA Crop Report and Grain Futures markets including wheat, soybeans, corn & more
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USDA Crop Report is a blog dedicated to bringing updates, news and commentary on the USDA Crop Report and the grain futures markets including wheat, corn, soybeans and more.
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Posted on 4/24/2015 2:07:44 PM by: Larry Baer, Market Strategist @ Zaner. 312-277-0112.
Call me for trade
Posted on 4/24/2015 2:04:38 PM by: Larry Baer, Market Strategist @ Zaner. 312-277-0112.
Posted on 4/23/2015 3:35:54 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.
In the last few years we have seen a trend of corn acres shifting to soybean acres. Last year we had a decline in corn acres while soybeans had record acres in the US and South America. This year the trade and the USDA expect more of the same. The most recent USDA estimates are 89.2 million acres for corn (lowest since 2010) and 84.6 million acres for soybeans (a new record). As we slowly get into planting soybeans are making a last minute bid for even more acres likely at the expense of corn.
Strong soybean demand in the last few years had kept soybean prices relatively high compared to corn. The market has responded with increasing soybean acreage both domestically and abroad. The US planted record soybean acreage last year and South America seems to set new soybean acreage records year after year. This trend is continuing as we get into the US growing season with another large shift of corn acres to soybeans expected. Relatively strong soybean prices in the last couple of years have suggested the need to add soybean acreage, but at what point do we overshoot the mark? This could be happening this year as projected global soybean stocks would be a record by a long shot. However, we may need a year with relatively low soybean prices to slow down the trend.
Price is not the only factor in determining planted acreage, but it is one of the most important factors. Just in the last few days soybeans have made a last minute push to add even more acreage. As of Thursday afternoon November soybeans are up 8 3/4 cents for the week while December corn is down 8 3/4 cents. This may have an impact on producers that are on the fence, or that have been late getting corn planted.
Price is not the only factor that is encouraging more soybean acres at the moment. In the delta and the southern corn belt wet, cold conditions are keeping some producers from planting corn. In some areas the window of opportunity will be closing soon and soybeans may become the better option. In the North and the West dry conditions have producers concerned about yield potentials this year. This could be encouraging producers to look at planting more beans and less corn as well. Soybeans have a smaller cost of production on a per acre basis so the may be seen as the less risky crop to plant this year. In the eastern corn belt subsoil conditions are much more favorable, but here too a cold and wet start may develop into planting delays if the weather pattern does not change soon.
With global demand for soybeans growing global production needed to grow as well. The market uses price to encourage this, and this seems to be working. However, if both the US and South America have average growing seasons on record acreage we could be getting to the point where global production is growing faster then global demand. This may not have happened yet and we still have two growing seasons to get through to see if this is the case. So, for now soybeans still seem to be on a mission to get as many acres as possible. But, much like corn in the past few years, the market at some point may need to work to give back some of the acres that have switched to soybeans.
Please give us a call if you would like more info on the strategies we are using or if you would like to set up an account to put a plan in action. Ted Seifried - (312) 277-0113.
Feel free to give me a call or shoot me an email if you would like to talk about your marketing plan, the markets, weather, or just to visit. Also, follow me on twitter @thetedspread if you like.
May Corn Daily chart:
May Soybeans Daily chart:
May Wheat Daily chart:
All this means that speculators should be looking for opportunities and producers need to look to lock up some prices. Give me a call for some ideas. In particular, producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.
In my mind there has to be a balance. Neither technical nor fundamental analysis alone is enough to be consistent. Please give me a call for a trade recommendation, and we can put together a trade strategy tailored to your needs. Be safe!
Ted Seifried (312) 277-0113 or firstname.lastname@example.org
Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie
Posted on 4/23/2015 2:56:35 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.
Corn and soybeans found some strength on Tuesday based on very little new fundamental news. A weaker dollar was supportive and may have been the spark. Is this bounce off lows the start of a new trend higher, or is it just a temporary bounce?
The fundamental set up for grains has been mostly bearish for some time now. While demand has been good, especially for soybeans, record crops in the US and large global supplies have cast a negative shadow over grain markets. However, this is old news and in the relatively near future the trade will begin to focus on the new growing season. While we do have some reasons to be more optimistic, especially for corn, in the new growing season we may not be quite ready yet.
Weather will become a major driving factor in the months to come. For the moment the trade is looking at early season planting weather as bearish. With all of the rain in the Eastern half of the corn belt and the dryness in the Western half weather at some point may become a bullish factor for corn in particular. If the soggy weather persists in the East the trade may get worried that some corn acres could be lost from an already lower acreage number. And, if the dryness persists in the West the trade may get concerned about yield potentials. But, for now there is a lot of time to get planted and get rain so it may be too early for markets to start to add weather premium.
For soybeans it is difficult to imagine a bullish planting weather situation aside from planting delays persisting all the way into June. If planting delays keep some corn acres from getting planted this could mean more soybean acres. If planting goes smoothly and quickly we could see overall acreage increase and soybeans could not only stand to gain acreage but could also see an increased yield potential. In the mean time demand has gotten softer as global demand for soybeans and soybean products has shifted to South America.
The bottom line is that, short of a deeper correction in the US$, we are not likely looking at a change in trend for grains. It is likely too early to get excited about planting delays for corn and it is difficult to see a bullish planting scenario for soybeans. However, in weeks and months to come the attention will shift more to the new crop and the growing season may offer reasons to be more optimistic on pricing at some point.
Posted on 4/23/2015 1:33:19 PM by: Larry Baer, Market Strategist @ Zaner. 312-277-0112.
Posted on 4/22/2015 1:39:28 PM by: Larry Baer, Market Strategist @ Zaner. 312-277-0112.
Markets: Grains, CME Group (CME), Chicago Board of Trade (CBOT), Corn (C, ZC), Wheat (W, ZW), Red Wheat (KW, KE), Soybeans (S, ZS), Soymeal (SM, ZM), Soyoil (SO, ZL), Oats (O, ZO), Rough Rice (RR, ZR), Grain Price.
Futures, options and off-exchange retail foreign currency ("forex") trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. Past performance is not necessarily indicative of future results.