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NW Indiana | Ray I always appreciate your thoughts, but I have a question. Don't you think a china trade deal would be more of a 2019 story?? Currently I would think many in the trade are anticipating an acreage switch of say 6-8 million acres from soybeans. The corn market basically needs to pick up 5 million acres to meet demand without taking down the carryout(which will end up more likely around 1.650). This would reduce carryout on soybeans by say 200 million which is comfortable. Give wheat the balance and everyone is basically happy. But if we strike a deal I could see an additional 100-200 million in soybean exports this year let alone what all that would do to next years balance sheet. All of a sudden things could look a bit tight. I could type out all my numbers now but there is still so much speculation(for those of you that think fundamentals are known and already traded you can reference this post). So the way I see it I feel things are currently fairly valued based on the known and many unknowns. As far as 2019 beans I know the front months would likely lead the charge but maybe my thought process explains a little of how the spreads are behaving. Next years acreage is still very unknown and with a trade deal could become very important. | |
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November 2019 soybeans
