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JonSCKs
Posted 3/13/2017 08:31 (#5896079 - in reply to #5896031)
Subject: Both.


Do you believe the current crash in oil prices are a driving factor on the drop in soybean prices today or do you believe it is related to soybean fundamentals? I.e. 90 million acres, 108 Brazil etc? 

Both. 

I do not discount what Maize is saying.. I believe the break in beans last year $8.50 as well as the break in Crude Oil.. under $30 were both over done by the short funds.. we've reversed this year and pushed the top side.. now pulling back on both markets.

what will bring crude back up? Obviously weather isn't goi g to effect crude like it does grain, opec has tried to cut production among member countries but that doesn't appear to be working. I think demand in the u.s. is still just as strong as ever, so what will it take to get crude back up to $50 plus? Another gulf war? It seems Trump is going to revise policies to encourage more u.s. production to try and make the u.s. more energy independent. I think this will only continue to put pressure on oil prices moving forward. 

Could be.. on the Weekly Wednesday reports we got a huge build in Crude stocks last week while refined products fell.. we are entering seasonal maintence for the refiners as they flip over to summer blends and do maintence.  So demand for crude will take a seasonal dip.. I believe Conan had a chart showing that..  Crude has already broke almost $10.. is it done going down?  Probably not but we'll see if we continue to get additions to the rig count with this change in outlook.. but that will probably take some time.

Seasonal summer demand will probably do the most good/support.. like the bean market Crude Oil demand is growing world wide.  Both are similar demand stories.

Prospects for a war?  Hopefully not but you never know.. or a hurricane.. as well as OPEC will probably act to continue to support prices.. what choice do they have?  Throw in the towell..??  Like the game "Battleship" when the market provided the $$$ to "fire away" with the drill bit.. the US Shale players found a lot of prospects.. now the market is finding out at what price the drill bit stops..

As far as beans go.. we will see a shift in acreage from wheat to beanies out here in the fringe.. last year some area's got pretty decent rains.. as the "large planting numbers" are reported that will be bearish.. later when the actual yields of these lower producing acres are realized.. (see last falls rally also..) it may get overdone.

Personally I'm almost 2/3rd's hedged on 2017 crop.. on a big break I'll reown or cover for the summer weather markets.. I already see value in some of the energy sector and adding to positions there.  I'm on record as saying we will see $70 crude.. this period will set that back.. but currently world wide.. demand is still projected to grow faster than supply.. so.. not detered.

Cheers. 

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