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South Central Iowa | I really don't think today was half as bad as it looked. Soybeans picked up support and held in the $10.20's. They made a new low mid morning and it picked up off a trend line at $10.19'2. There was no acceleration after that lower low, which is a good sign. The not good sign is of course that it was down nearly 30 cents at that point, but hey, it picked up buying interest to hold that area. I included some points of support on the chart I am looking at. There is another confirmation of that descending trend line at $10.17'6 and not included on the chart is the 50% Fibonacci for our entire autumn/winter move from $9.34-$10.80, which is at $10.07. The primary concern of mine is confirming that rising trend line at $10.01 if we go down. That along with the rising trend above our market creates a nice ascending channel and would help give more structure to the soybean market. Other points are listed in the chart and hopefully we don't need to worry about any of them, but break the January low and that would be a concern because that would be the first time since August/September that we made lower swings on a down move. I have two targets at trend line crosses. That top one includes a line from May 2014 and the June 2016 high and sits at $10.95-96 on February 22. The lower point is very perfect and I have mentioned it before, it sits at $9.72'6 and includes our lowest rising support that comes off of the Planting Intentions low of last year and the seasonal lows from the early autumn. That intersection is on March 29, two days before the Planting Intentions report. Not saying we see it, but that would be a wild ride from here to $10.96 by late February and down to $9.73 by the end of March...... It wouldn't be out of line with seasonalities.... Soybeans scare me sometimes.....
Corn did yeoman's work today! I have posted this chart before, but we are still in an uptrending market. Analysts keep saying it is a sideways market and that just isn't true. It couldn't even reach the lower channel line today at $3.54'0 in spite of soybeans being 30 cents down. It just picks up too much support. That channel is very reasonable, it points to $3.97-$4.26 by July, which if the high is realized is 12 cents lower than the high of July last year. We have more corn, so that makes sense. If we do break that channel line at $3.54'4 tomorrow look for support in that shallower channel at $3.49'6. After watching it today, I honestly would be surprised if it breaks it and I have an order to buy July at $3.68'4; I'm not throwing the kitchen sink at it or anything, because you never know, but this channel is 5 months old and is incredibly modest and reasonable, unlike some moves we see out of soybeans. My biggest problem with some of the lines on the corn chart is we don't have many confirmations of them, which should make me question their strength. But I believe the reason we saw corn picking up before the export announcement even, was buying in anticipation that we wouldn't reach the line. Corn is pretty sturdy in my opinion. It's not exciting, but it is more reliable.
Throwin' Bones because Centuryfarm thinks it's all voodoo. I've heard Technical Analysis compared to reading tea leaves and hocus pocus before, and I would never put everything on it. That is why I only like Soybeans and Corn. I feel, like many of you, that I do understand our market in a fundamental way. So some fundamental points, the Jan 12 report included Brazil and Argentina production at 104 mmt and 57 mmt respectively; 161 mmt total. The grain exchange in Argentina came out with a 52.5-53.5 mmt estimate last week and most analysts are putting Brazil in that 103-105 area; so a total of 155.5-158.5 mmt, 2.5-5.5 mmt less than the Wasde, 90-200 million bushels. The number that demanded our soybean prices to be $1.30 higher than 2015 was production of 153.3 mmt. Soybean consumption is projected by the same Wasde to be 15 mmt higher in the 16-17 year vs the 15-16 year, which was 14 mmt higher than the preceding 14-15 year. So an increase of 3 mmt out of our biggest competitors in SA and an increased usage of 15 mmt. Our increase in production from 15 to 16 was a shade over 10 mmt. So we are likely looking at 2 mmt shortfall and that is not even getting into the increased global consumption of 10-15 mmt for the 17-18 year. Our export pace when seasonally adjusted shows that we are 140 million bushels over the USDA projection. If that continues to be the case, we could look at our carryout falling to 280 million bushel in Wasde's over the coming months. I keep hearing analysts say we are front loading, front loading, front loading... What if we aren't? What if this is just the global increase in consumption? I see an export inspection like the one this morning and see the pace we are on, and I start to think soybeans don't have a balance sheet issue, especially without perfect South American production. A lot of people have varying views on the soybean S&D, but I for one don't read them as that bearish, and I don't think the market does either. And to add, we probably aren't adding 6 million acres of production without a higher price than this.
Corn fundamentals are easier! We have a lot of corn! Don't expect that market to get excited. But like I said, we have a very reasonable channel that points to $3.97-$4.26 this summer. We will get a weather run, but like last year, if nothing materializes, expect it to evaporate quickly.
Trump. The wild card. Think about it, the guy wants to increase exports, so why would that be bad for us. Trade war? Well he needs congress to go along with the punitive taxes and he is not going to get that. Also, the media tries to instill fear about him because they don't like him. They have been very angry that the market has gone up since his election. That is not a biased thought, it is an objective observation. They hate the guy and Republicans in general. They cheerlead an economic collapse so they can blame them. Don't let their cheerleading of doom cloud the truth that there are people who realize destroying trade is not how you make America Great and that these bluffs are a Trump negotiating tactic. I really don't want to get into politics, but a spade needs to be called a spade, and it is pretty obvious that the media will exaggerate and attempt to exacerbate any thing they can when it comes to Trump. But when the smoke clears, I think, both us and the markets will understand that there are good opportunities and it is not the end of the world. Just like that Poseidon Adventure song, "There has to be a morning after!" https://www.youtube.com/watch?v=Mm41npkt6Xw LMAO!!!
Good Luck Everyone!
Edited by Conan the Farmer 1/30/2017 17:53
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north iowA | 10 cents lost Friday on corn basics at E plants |
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| Assume MN corn works into the markets you are trying to sell into. As you know...big crop in MN. Would expect to see some pressure on basis unless board takes crap. Until the piles are cleaned up and bins cored out....hard to see basis swing back. Some say by that time... some e-plants will be covered to a point they will have time on their side. |
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South Central Iowa | Don't sell to them and shop around then. Near me, the basis has increased 7 cents since we peaked at $3.71. So the market came down 13 cents and basis picked up 7 cents, net 6 cent decrease. I wasn't really referring to basis, which is an organic market all its own that, though related, is separate and varies wildly on location and timeframe. |
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Nebraska aka the boondocks | Holy cow longest post ever, just kidding. I posted the other day, I have a feeling we see e15 in the near future. |
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north iowA | if E plants loosing money, what do you expect them do |
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South Central Iowa | Yeah, you can get all of my simple thoughts from the charts without all the windbagging! Lol
E15 is a possibility, we never know. We're not the policy makers, but I hope the lobbies are busy letting Trump's people know who helped him win. Remember your friends. |
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Nebraska aka the boondocks | Well I only say that because it is an easy fix for a lot of the problems caused by trade issues. As I said before so is a cheap dollar a fix that won't ruffle so many feathers. If the us sends all excess grain up the smoke stack, that would prolly cause a whole nother round of riots. |
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Buxton ND | ZE Ethanol futures have been under pressure since mid December.
E-stocks building.
E plant margins been weak and are reddish
Rins did a crash and burn last week.
$50ish crude still does match with $5.00 corn period.
Ethanol has not gotta much attention in NAT the last weeks.
Best basis levels were more then likely this past Labor Day.
"thinks it's all voodoo. I've heard Technical Analysis compared to reading tea leaves and hocus pocus before"
The Voodoo charts are fine and dandy when there Voodooing higher or the tea leaves point UP. You can see this pretty clear in the bull flag chart/11-1.50 beans from last week. Guys really seem to like that thread even is was voodoo.
A chart is just like a crescent wrench in the toolbox. Some times you use this crescent wrench with a vise grip. At times you bring out a racket and a 3/4 wrench. Yaa then there are times you just grab the BMFH/hammer and beat to death. IMVSO the hammer should RARELY used in marketing, as in hammer time marketing. We saw this last summer believe it USFarmPro even posted a picture of a bunch of hammers on the wall = ending very poorly.
E-15% ?
I take Demi Moore out on a dinner too tho its probably not to likely. |
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| One quick question about corn and soy supplies. Aren't the stocks vs use ratio of both crops very similar? I haven't checked lately but last time they were both around 20%. Yet the perception is that there is a huge over supply of corn and a somewhat tightening supply on beans. I mean 2.4bb is a lot of corn but is it really if its only 10 weeks of supply?
Edit: This is why these are NOT the wheat market which has a stocks to use of 50%. Could we get there? Sure. But corn and soybeans are a loong ways from there.
Edited by Deere6 1/30/2017 19:29
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Buxton ND | Yep wheat's stock are 51-52% of use-age
This IS NOT the case with spring wheat. Been trying to get this addressed, even tried getting in addressed on air at the Top Producer Conference.
I would like to say a sincere THANK YOU to Market 2 Market, Mike Pearson and Darin Newsum for bringing forward stocks are only 17.3% of total wheat stocks This why I've been saying can we stop addressing spring wheat as wheat. You can see I do not give up too easy..... And the semi is still full of #2 diesel too ! ! !
Edited by Sat 1/31/2017 07:00
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| Right you are Deere only corn carryover is now 8 weeks consumption at back to previous 2012 drought levels of 1.2 billion bushels per month,
Today's export number make bean shipments and contracted sales (which look like cancellations are slow comimg) is at 51 mmt so we need sales of about 150,000 Mt of beans a week to meet usda numbers. I think exports hit 57 to 58mmt 125 million bushels more than the recent forecast. Crush I see at 42 to 45 million bushel per week putting disappearance at 4.35billion bushels and that is with a crop of 160 mmt in SA.
We NEEDS more acres |
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South Central Iowa | Corn is running about 16% on stocks use while soybeans are 10%. What's more with soybeans is if you use that seasonally adjusted export number that I mentioned, leaving us at 280 mb carryout, the. You are looking at a 7% or less stocks use.
I agree Deere, neither are wheat. The corn though is heavier, has to compete with wheat in places, and is primarily a domestic product. Soybeans on the other hand is in a better place to begin with, is not as easily substitutable in feed rations, and is a big export product, which leaves open the door for unknown demand. In addition, funds love beans; they have greater daily ranges, higher value, greater worldwide demand, and far less harvest pressure. Soybeans will get more activity than corn, but both will give people a place to get fairly attractive pricing, because both can have their balance sheets altered by a disruption. |
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South Central Iowa | Sat, you lost me at the hammer bit, but I think you were trying to say that charts are only good when they are right. I agree, fundamental shocks change charts and sometimes they just break. They are not science or perfection, they are art and like you say, a tool. They can give you points to make a better sale or buy, but you should be cognizant of the fundamentals too. That is my opinion on them.
Now you say $5 corn is out of the question, and without a supply disruption, I agree. But I am not calling for $5 corn, I am looking at approximately $4.00-$4.30 as an entry point into July and the height of our summer weather season. That is not a far out number. It is pretty likely because just the risk that a poor weather forecast will come along will send us up to a middle ground between a high and low production scenario. It happened last year and the year before that. Might not reach as high this year, but it will come along none the less.
Edited by Conan the Farmer 1/30/2017 19:58
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Floyd County, Iowa | I think I need to change my handle, after this. |
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| Thanks for setting my numbers straight there Conan. Wow 10% on beans, of course we still have SA to compete with but seems to me like we are a lot closer to taking a rocket ship to $15 than going to $8 futures for any length of time. Of course 89 million acres of beans with a crop even close to last year and the picture could change a fair amount. I am still far from convinced though that 10 futures is going to get than many more acres. $12 beans and corn still at 3.60, then yes.
Edited by Deere6 1/30/2017 20:46
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Southeast Colorado | But..........Minny wheat is so thinly traded............you might as well be talking pinto beans! Or my local round bales of feed market! |
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| Peolple can whine all they want about fundamentals vs charts
I n the end Fundamentals rule,but usually only after the mkt swings too much in the other way
You can't consistently make money trading fundamentals but can with charts. |
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Central IL | Fundamentals are macro direction. Technicals inform timing and targets. When they both agree it is time to place your bets. |
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Chapel Hill NC | I read about 3 lines and then gave up on your book. Sorry. |
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South Central Iowa | WHAT!?!?!? You didn't even make it to the plot twist????? You're missing out Mr. Gruden. Haha!
Short version: Pictures tell everything without all the blah, blah, blah; Soybeans haven't done any chart damage and really have a pretty bullish fundamental outlook. Corn is the tortoise, it is quietly strong and showed it, but don't expect fireworks without a weather disruption this summer |
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South Central Iowa | Agree with both of you. Fundamentals determine our level and technicals determine how we get there. Trade only fundamentals and you will miss 90% of the action. There just simply isn't enough fundamental news. |
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South Central Iowa | LMAO Old Bones!
You can keep the name, I probably won't use Throwin' Bones again. It's just a take off Centuryfarm's voodoo perspective. That made me think of gypsy fortune tellers reading your fortune by tossing out chicken bones. It makes me laugh, but I am literally the only person that finds it funny. So it is a stupid joke that needed to be over before it began. Haha!
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South Central Iowa | Definitely, I think we see the same situation as last summer where we advance to $12.00 until more is known. The market likes to find the middle ground before an unexpected event and summer weather is the most unexpected. Then it is either $3 up to $15 or $3 down to $9; although I might be more in the camp of $11.50 +/- $2.00 after right now. The same situation occurred in corn the last two years: trade to $4.50 because it is either $1 up to $5.50 or $1 down to $3.50.
I'm not buying the great acre switch either. We need 88-89 million acres of soybeans. At 88 million acres, that would be 87 million harvested. With a trend yield of 47.5, national production would be 4,140. We are projecting 4,108 usage in 16-17 and I am seeing a lot of estimates for 17-18 around 4,200. So trend yield on a high acre switch could still be a deficit of 60 mb. If our carry-in is 280 mb as the seasonally adjusted export pace has us heading to, that will put our 17-18 carryout at 220 mb, a 5% stock use. Trend line on 86 million acres, 85 harvested, would drop our carryout to 115 mb. There would be price rationing at that point. What if we produce a sub-trend yield or don't switch 4 million plus acres? A lot of people don't like soybeans as much, and like you say, a $10 soy vs $3.85 corn is not buying acres. |
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South central Minnesota | All I can find is this usda data
Sat - 1/30/2017 18:46
Yep wheat's stock are 51-52% of use-age
This IS NOT the case with spring wheat. Been trying to get this addressed, even tried getting in addressed on air at the Top Producer Conference.
I would like to say a sincere THANK YOU to Market 2 Market, Mike Pearson and Darin Newsum for bringing forward the 17.3% stocks-to use ratio in spring wheat off the latest USDA report. This why I've been saying can we stop addressing spring wheat as wheat. You can see I do not give up too easy..... And the semi is still full of #2 diesel too ! ! !
Edited by southernmnman 1/31/2017 03:53
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Buxton ND | I corrected it to said "stocks are only 17.3% of total wheat stocks"
Do you have some wheat in the bins also Southern ? Or are you just riding my donkey as usually ? ? ?
Did you lesson to Darin Newsum ? ? ?
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South central Minnesota | Carryout for the category. That's a bit different than saying 17.3% stocks of hrsw vs all wheat isn't it? 34% carryout is a different story then say the 2007/2008 12.4% that triggered the price increase. What is interesting also, demand here has decreased even vs last report, now down to 298 mb. You need the exports they're expected at 300 mb and imports you see a few less bushels coming across the border, 2 mb in the last report. Interesting also is that there are far more outstanding sales this year vs average and last year. Those are bushels sold but unshipped. Now I'd say if those bushels go and that's not always true that they will ship but with far more in the bin than commercial and with what looks to be more bushels period over last year in storage vs what is expected can you depend on your neighbors to hold as tightly as you?
The rest of your response isn't worthy of a reply but I'll say the last wheat grown here was in 1974. What I am saying is you might be bulling up some guys and abandoning their marketing plans because of your stance. |
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Buxton ND | "What I am saying is you might be bulling up some guys and abandoning their marketing plans because of your stance"
This was YOU last summer,,, all bulled up on corn and beans and preaching it.
I've been bullish wheat since harvest because of what Mr Market has been telling me. I have also stressed HIGH QUALITY milling wheat which a fair chunk of those stocks are not and millers know it. Even went so far to say if one has 15-16% spring wheat lock it in the bins, take the unloading auger motor off and give to your buddy.
The difference between you and I,,,,, is I have had facts to be bullish, not just hoping for a rally because my bins are full. MWEH has rallied a full dollar. I do believe your hoping is still packed away in your bins correct ? ? ? Oh yeah its also a fact you refuse to share the TRUTH with NAT as to your cash position of corn and beans. Are you now ready to be up front/honest and truthful with NAT ? ? ? ? ? |
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NW Barton County Missouri | Corn and beans will present a profitable price at some point this year and wheat will continue to flounder. Still waiting on Mark Golds big rally in wheat. |
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Middle Tennessee | Wasn't Tolstoy a farmer too?:) |
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South central Minnesota | Sat - 1/31/2017 07:37
"What I am saying is you might be bulling up some guys and abandoning their marketing plans because of your stance"
This was YOU last summer,,, all bulled up on corn and beans and preaching it.
I've been bullish wheat since harvest because of what Mr Market has been telling me. I have also stressed HIGH QUALITY milling wheat which a fair chunk of those stocks are not and millers know it. Even went so far to say if one has 15-16% spring wheat lock it in the bins, take the unloading auger motor off and give to your buddy.
The difference between you and I,,,,, is I have had facts to be bullish, not just hoping for a rally because my bins are full. MWEH has rallied a full dollar. I do believe your hoping is still packed away in your bins correct ? ? ? Oh yeah its also a fact you refuse to share the TRUTH with NAT as to your cash position of corn and beans. Are you now ready to be up front/honest and truthful with NAT ? ? ? ? ?
LOL! I was the one? Quite the creative memory you have, no i wasnt as bullish as what you say but keep trying. No you dont have facts but again keep trying to talk it up. |
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Buxton ND | The trouble with soft wheat is exports were very poor last year and worse this year. Increases in world production are the killer. Current exports sales are,
71.4 mb currently
102.2 last year.
This has gotten alittle better y-o-y the last couple of months tho still very poor. The next step is the feed bunks or probably better yet plant it to beans and torch off the wheat. DC - double crop beans don't seem too fun anymore when you loss your back side's on the wheat.
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Buxton ND | Southern I find your post hilarious LMAO, maybe you need to go back and read your own posts from last summer.
THE FACTS, MWEH has rallied 1 full dollar, go look ! ! !
Would you like an up-date on my son's make believe grain marketing for school ? ? ? |
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NW Barton County Missouri | 90bu wheat followed by 50bu DC beans were quite fun last year. Definitely not the norm around here but the stand of wheat looks good and if there's moisture the end of June, I know I'll be planting DC beans. |
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| https://www.youtube.com/watch?v=sLg-v4CS4nQ thanks conan |
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S Illinois | How do on-farm/off-farm stocks affect the market sentiment? In corn it was alway looked upon as bearish when stocks where in farmers hands. Is this same situation not bearish spring wheat? Taking into account Minn, ND, 35% of Mont, 40% of SD (Each of the last 2 are estimates based solely on spring wheat production % of total production), the Dec 1 grain stocks report had those 4 states with 70% of the spring wheat stocks still on farm. Corn was around 61% on farm in Dec and will likely be down around 50-55% come Mar. If we had 70% of the corn still on farm on those reports, that is all we would hear about.
As a side note, almost 55% of the US wheat in farmers hands as of Dec 1 is spring wheat. Would seem like the spring wheat growers need a lesson in bin usage, carryover, and depressing the markets. |
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South central Minnesota | that dollar move, did it put it the contract high, yes or no? |
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Buxton ND | IDK if it did you better start expecting that was the high in corn also. Next ? |
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Throwin' Bones! Soy and Corn
