USDA Crop Report

News & commentary on the USDA Crop Report and Grain Futures markets including wheat, soybeans, corn & more

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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Soybeans: What to Look for Going Forward

Posted on 10/30/2014 2:27:55 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

At the moment the soybean trade is dominated by what is going on in soybean meal.  A very tight old crop soybean carry over has left soy meal stocks very tight in the short term and prices have increased significantly.  This has rallied soybean prices despite the record crop being harvested.  This soy meal tightness may only last a short period of time as crushers get more soybean availability and a very positive crush margin adds incentive for crushers to produce meal as fast as possible.  So, going forward what might the market be looking at for soybean price direction?
 
The "meal deal" has been an increasingly important factor for the soybean market in the last few weeks.  A very tight old crop soybean carry over and harvest delays made it difficult for soybean crushers to get their hands on beans and therefore slowed the crush down to near 10 year lows.  This has put a major pinch on soybean meal stocks and commercials have had to bid prices up dramatically to fill their near term needs.  However, with a record soybean crop coming on line here in the US and very positive crush margins it would seem that crushers will be going full speed ahead for the foreseeable future.  This could mean that the "meal deal" is temporary and that soybean meal prices could be peaking in the short term.
 
Going forward soybean meal prices could come back down, especially if a very positive crush margin causes the crush to overshoot demand.  But beyond the soybean meal situation there are other factors on the horizon that could have a significant impact on soybean price direction.  The most important factor could be the South American soybean crop.  South America is expected to plant a record amount of soybean acres and contribute significantly to the USDA's projected record world soybean carry over.  If there were any problems with the South American soybean crop this could significantly increase the demand for US soybeans and send prices higher.  If South America has a good growing season global soybean prices could fall.  The soybean market will be watching South American weather closely going forward.
 
Another major factor for soybeans will be export demand.  Right now we are seeing strong export demand especially from China.  This is to be expected at this point in the marketing year but if export demand were to continue longer then usual this could have a positive impact on prices.  This could be related to issues in South America as well.  If South America had issues with their crop or harvest delays the US could see more export business then expected.
 
Getting into the new year the market will be looking at US acreage intentions.  At current prices soybeans could stand to build on last years record planted acreage.  While it is not the case that soybean prices offer strong profit margins at the moment they could be the lesser of the evils.  Corn production takes a lot of input cost comparatively.  This could mean that producers lean toward more soybean acres and less corn acres just from a risk perspective.  This could be a moot point however, if corn prices were able to manage a rally to more profitable prices.
 
In the short term the soybean market will still very much have it's eye on soy meal.  However, with November soybeans going into delivery period deliveries may steal some of the spotlight.  If there were hefty deliveries in the November soybean contract it may remind the market that there are a lot of soybeans coming out of fields right now and it could drive home the idea that the tightness in soybeans and soybean meal is more of a regional problem with the East coast rather then a national issue.  This could suggest that basis may be more responsible for fixing the supply issue then market prices.  Deliveries on the November soybean contract could happen given the availability of soybeans near delivery points and the sharp increase in prices over the last few weeks.
 
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 that is your thing. 
 
December Corn Daily chart:

November Soybeans Daily chart:

December 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 tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie


10/29/2014 bean meal buy signal

Posted on 10/30/2014 1:18:13 PM by: Larry Baer, Market Strategist @ Zaner. 312-277-0112.

Call me for trade

 

 


What is the Deal with Soybean Meal?

Posted on 10/30/2014 12:51:18 PM by: Ted Seifried, VP, Ag Hedging @ Zaner. 312-277-0113.

Soybean Meal prices have been on a tear lately with the December meal contract posting current highs almost $105 a short ton over lows since October 1st.  The recent high in December soybean meal also represents the highest traded price since June of 2013.  This means that for the moment soybean meal has shrugged off all of the bearishness of a record soybean crop.  What caused this strength, and will it continue?
 
December soybean meal prices have risen sharply in the last 4 weeks.  This is mostly due to tight soy meal stocks and strong domestic and global demand for meal.  The USDA has been forecasting strong demand to spill over from last year but the tight stocks situation is what is causing concern. 
 
With a record soybean crop in the US the expectations were that soybean meal stocks would be abundant at this point.  However harvest delays in September and the first half of October have slowed the process of getting soybeans in the hands of crushers and therefore slowed soy meal production.  Normally this would not have been a huge issue as we would have been able to rely on old crop carry over to get us through harvest delays but old crop ending stocks were a very tight 92 million bushels.  This is much tighter then what the USDA generally considers "pipeline" supply of soybeans and in effect suggests that many crushers had all but run out of soybeans sometime in September.  This helps explain the recent crush pace near 10 year lows.
 
A few weeks ago the slow pace of soybean crush had been seen as a bearish indication of slow demand when the reality was that there was a shortage in supply of soybeans to crush.  Soybean meal prices have responded by going sharply higher and soybeans have been able to follow to an extent.  However, with a record soybean crop coming out of fields it seems likely that soybean crushers will soon have all the soybeans they need.  This could make the tightness in soy meal supplies temporary.
 
What is more is that the soybean crush margin has risen dramatically in the last 4 weeks as well.  This means it has gotten substantially more profitable to crush soybeans for meal and to a lesser extent for soybean oil.  Markets have a way of using money to get what they want and in this case the market wants more soy meal and it wants it now.  However, markets also have a tendency to overshoot the mark when it's goal is not achieved right away.  In this case harvest delays made it difficult for the crush to ramp up immediately on a national scale and crush margins may have out preformed the extent of longer term soybean meal demand.  This could mean that crushers may start to overproduce soy meal because of good crush margins and eventually production could out pace demand.  We certainly have enough soybeans this year to increase crush dramatically and still have a very comfortable carry over.
 
The bottom line is that soybean meal is now reflecting the effects of a very tight old crop soybean carry over coupled with early harvest delays.  This has created a major pinch on soy meal stocks and prices have risen sharply to accommodate the current tight supply/strong demand structure.  However the tight supply situation may be very temporary and we could swing to a period of overcompensation and possibly overproduction.  If this is the case soy meal prices may top out soon and head back lower as soon as the crush is able to catch up.  Soybean supply should not be a limiting factor for soy meal production for the balance of the year.
 
In the mean time sharply higher soy meal prices have given support to soybean prices at a time that leaves many analysts scratching their heads.  A common thought had been that we should be seeing lower soybean prices as we brought in this record crop.  Soy meal prices may have put that on hold, but be careful.  It may be premature to think that soybean prices will only go higher from here.  This certainly could be the case if there is any issue with the South American growing season.  However, if the South American crop does not have any major problems record global soybean stocks could still push prices lower.
 
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 that is your thing. 
 
December Corn Daily chart:

November Soybeans Daily chart:

December 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 tseifried@zaner.com

Additional charts, studies, and more of my commentary can be found at: http://markethead.com/2.0/free_trial.asp?ap=tseifrie


NO UPDATE TODAY

Posted on 10/30/2014 7:35:31 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

WE HAVE A VERY GOOD HEDGING DEPARTMENT HEADED BY TED SEIFRIED. WHY NOT TALK TO HIM OR ANY OF OUR OTHER HEDGING BROKERS. NO ONE WILL PRESSURE YOU AND WHAT HAVE YOU GOT TO LOSE? I'VE BEEN A LICENSED FUTURES BROKER FOR 41 YEARS AND TRUST NO ONE MORE THAN TED AND HIS GROUP

 

Higher closes Minneapolis, Kansas City and Chicago wheat along with corn, soybeans, soybean meal oil and soybean oil while lower for oats and rough rice., Meal remains the story with record demand and delayed bean harvest leading the way higher for the entire complex excluding rough rice. However, today the December contract made its highest high since June before tumbling over $2500 to settle lower in reversal type action. I'm not saying it will make a new high but the beans are out there and, sooner or later, the meal will come back 'down to earth' probably taking the rest of the complex with it! The wheat complex settled higher seemingly just along for the ride like corn has been. Minneapolis and KC's nearest resistance is still way up around 620 while Chicago's around 650. I really don't expect to see those prices reached anytime soon if at all. While my sell signals remain intact I would suggest standing aside for now. The Minneapolis/KC spreads have bounced back as you can see from the chart below but still look weak. Oats closed down but look strong while possibly in an exaggerated BULL PENNANT. Huge support remains underneath. What happened to rice? It crashed down to its one dollar limit before rallying back sharply, still settling down but 'only' 27.5. There sure must have been a large sell order doing that. Of course, rice made another new CONTRACT LOW AND CLOSE.. Heavy resistance remains overhead. Corn, helped early on by meal, had its best high and close since August but is till in a resistance area closing well off its highs and I just don't trust it to go much higher. I would be careful and like the bean complex, is setting up for gift hedges for the farmers in my opinion barring any unforeseen circumstances. CHECK THROUGH ME WITH OUR HEDGE DEPARTMENT. Strong looking resistance remains from 360 up to around 375.The beans (best high and close since  Aug. - Sept.) and meal (best high and close since June again) continue to have strong rallies led by the meal for the reasons mentioned above. However, both sold off sharply from their highs and only the former settled higher. Oil had a good close led by unwinding of meal/oil spreads but has been trending sideways since last August.  As you can imagine the July15/Dec15 meal/oil spreads have exploded to their best close since June. Oh well, that now seems so long ago when meal was under oil!  SELL SIGNALS FOR MINNEAPOLIS, KANSAS CITY AND CHICAGO WHEAT ALONG WITH CORN, ROUGH RICE SOYBEANS, SOYBEAN MEAL AND SOYBEAN OIL. CALL FOR DETAILS.  For additional charts, quotes, news, commentary & more sign-up for a FREE 30-day trial to Market head.Com.

  

 

 

 

 

 

 

 

 

 


NO UPDATE TODAY

Posted on 10/30/2014 7:35:25 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

WE HAVE A VERY GOOD HEDGING DEPARTMENT HEADED BY TED SEIFRIED. WHY NOT TALK TO HIM OR ANY OF OUR OTHER HEDGING BROKERS. NO ONE WILL PRESSURE YOU AND WHAT HAVE YOU GOT TO LOSE? I'VE BEEN A LICENSED FUTURES BROKER FOR 41 YEARS AND TRUST NO ONE MORE THAN TED AND HIS GROUP

 

Higher closes Minneapolis, Kansas City and Chicago wheat along with corn, soybeans, soybean meal oil and soybean oil while lower for oats and rough rice., Meal remains the story with record demand and delayed bean harvest leading the way higher for the entire complex excluding rough rice. However, today the December contract made its highest high since June before tumbling over $2500 to settle lower in reversal type action. I'm not saying it will make a new high but the beans are out there and, sooner or later, the meal will come back 'down to earth' probably taking the rest of the complex with it! The wheat complex settled higher seemingly just along for the ride like corn has been. Minneapolis and KC's nearest resistance is still way up around 620 while Chicago's around 650. I really don't expect to see those prices reached anytime soon if at all. While my sell signals remain intact I would suggest standing aside for now. The Minneapolis/KC spreads have bounced back as you can see from the chart below but still look weak. Oats closed down but look strong while possibly in an exaggerated BULL PENNANT. Huge support remains underneath. What happened to rice? It crashed down to its one dollar limit before rallying back sharply, still settling down but 'only' 27.5. There sure must have been a large sell order doing that. Of course, rice made another new CONTRACT LOW AND CLOSE.. Heavy resistance remains overhead. Corn, helped early on by meal, had its best high and close since August but is till in a resistance area closing well off its highs and I just don't trust it to go much higher. I would be careful and like the bean complex, is setting up for gift hedges for the farmers in my opinion barring any unforeseen circumstances. CHECK THROUGH ME WITH OUR HEDGE DEPARTMENT. Strong looking resistance remains from 360 up to around 375.The beans (best high and close since  Aug. - Sept.) and meal (best high and close since June again) continue to have strong rallies led by the meal for the reasons mentioned above. However, both sold off sharply from their highs and only the former settled higher. Oil had a good close led by unwinding of meal/oil spreads but has been trending sideways since last August.  As you can imagine the July15/Dec15 meal/oil spreads have exploded to their best close since June. Oh well, that now seems so long ago when meal was under oil!  SELL SIGNALS FOR MINNEAPOLIS, KANSAS CITY AND CHICAGO WHEAT ALONG WITH CORN, ROUGH RICE SOYBEANS, SOYBEAN MEAL AND SOYBEAN OIL. CALL FOR DETAILS.  For additional charts, quotes, news, commentary & more sign-up for a FREE 30-day trial to Market head.Com.

  

 

 

 

 

 

 

 

 

 


RICE BOUNCED OFF ITS ONE DOLLAR LIMIT/ MEAL HAD REVERSAL TYPE ACTION.

Posted on 10/29/2014 7:35:34 AM by: Rick Alexander, VP, Trading @ Zaner. 312-277-0107.

WE HAVE A VERY GOOD HEDGING DEPARTMENT HEADED BY TED SEIFRIED. WHY NOT TALK TO HIM OR ANY OF OUR OTHER HEDGING BROKERS. NO ONE WILL PRESSURE YOU AND WHAT HAVE YOU GOT TO LOSE? I'VE BEEN A LICENSED FUTURES BROKER FOR 41 YEARS AND TRUST NO ONE MORE THAN TED AND HIS GROUP

 

Higher closes Minneapolis, Kansas City and Chicago wheat along with corn, soybeans, soybean meal oil and soybean oil while lower for oats and rough rice., Meal remains the story with record demand and delayed bean harvest leading the way higher for the entire complex excluding rough rice. However, today the December contract made its highest high since June before tumbling over $2500 to settle lower in reversal type action. I'm not saying it will make a new high but the beans are out there and, sooner or later, the meal will come back 'down to earth' probably taking the rest of the complex with it! The wheat complex settled higher seemingly just along for the ride like corn has been. Minneapolis and KC's nearest resistance is still way up around 620 while Chicago's around 650. I really don't expect to see those prices reached anytime soon if at all. While my sell signals remain intact I would suggest standing aside for now. The Minneapolis/KC spreads have bounced back as you can see from the chart below but still look weak. Oats closed down but look strong while possibly in an exaggerated BULL PENNANT. Huge support remains underneath. What happened to rice? It crashed down to its one dollar limit before rallying back sharply, still settling down but 'only' 27.5. There sure must have been a large sell order doing that. Of course, rice made another new CONTRACT LOW AND CLOSE.. Heavy resistance remains overhead. Corn, helped early on by meal, had its best high and close since August but is till in a resistance area closing well off its highs and I just don't trust it to go much higher. I would be careful and like the bean complex, is setting up for gift hedges for the farmers in my opinion barring any unforeseen circumstances. CHECK THROUGH ME WITH OUR HEDGE DEPARTMENT. Strong looking resistance remains from 360 up to around 375.The beans (best high and close since  Aug. - Sept.) and meal (best high and close since June again) continue to have strong rallies led by the meal for the reasons mentioned above. However, both sold off sharply from their highs and only the former settled higher. Oil had a good close led by unwinding of meal/oil spreads but has been trending sideways since last August.  As you can imagine the July15/Dec15 meal/oil spreads have exploded to their best close since June. Oh well, that now seems so long ago when meal was under oil!  SELL SIGNALS FOR MINNEAPOLIS, KANSAS CITY AND CHICAGO WHEAT ALONG WITH CORN, ROUGH RICE SOYBEANS, SOYBEAN MEAL AND SOYBEAN OIL. CALL FOR DETAILS.  For additional charts, quotes, news, commentary & more sign-up for a FREE 30-day trial to Market head.Com.

  

 

 

 

 

 

 

 

 

 


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