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South Central Iowa | Thanks for including that we are possibly bottoming. I looked at the chart first and thought, "God, all Mr. E's charts have the same bearish pattern," and lo and behold, when I read, you mentioned that, haha! I do hope for a bottoming. Looks like according to you, BO might take a bigger hit; not good for crush margins. From a fundamental standpoint, I am hearing that nearby crush margins are good, but that wider bases on the oil and meal from discounts for forward contracting are tightening up the crush margin for June onward. From what I calculate based on AMS data, current cash crush is $0.73 vs $0.77 on the synthetic. Using some numbers I am hearing, that June/July cash crush might be closer to 50-60 cents; still profitable, but tighter.
A move down in the oil of the type you are talking would put a bigger squeeze on those summer crush margins. Something to keep an eyes on. Thanks!
Edit: I should also mention that the price difference between cash soybeans and the Estimated Processing Value is $1.27 in the last report on 3/23, as opposed to $1.07 last year. The higher processing value is partially stemming from a soybean that is producing more oil and meal per bushel. This somewhat contradicts what I am hearing, because some soy merchandisers are saying that it is not as good as last year. The EPV is based on Illinois though, and my word of mouth comes from my broker and his contacts who are in Iowa/Nebraska/Minnesota.
Edited by Conan the Farmer 3/28/2017 18:19
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july bean oil possible downside targets...... and KC wheat update.
