Death comes to us all. Life's but a walking shadow | Fishguts alluded to the gist of the soybean problem below. If you look at the historical data about the decline in stocks between March and Sept for the past eleven years (2003-2013) there are only two years when that disappearance was below a billion bushel, last year at 857 million and 2004 at 793million. The ave for the other years is 1.145 billion. I don't have complete NOPA crush numbers but the average crush for the last five years has been about 130 million per month for the second half of the marketing year. This means 130 times six or 780 million bushel of which we already know that March (@ 153) was well above average. We still have on the books about 4 million metric tons of exports (146 million bushel). This put 2nd half usage in the neighborhood of 926 million bushel (780+146).
Now the USDA says that there are 992 million bushel of stocks as of March 1st and claim that there will be 135 million bushel left by Sept 1st.
Granted those exports will become imports and crush will decline but the point of this exercise is that users will be forced to bid the cash market later in the summer to get supplies.
So the question I have for Maizing and others is what happens to the futures market when the supply threatens to run out. Is it simply the case that unless there is supply the market can't function? Are the end users just not willing to trust the market to deliver?
|
Maizing's soybean spread thread continued.
