NEW PODCAST | In our latest podcast we go in-depth about the Sept 1 Grain Stocks report. We continue to see grains and livestock range bound for the rest of the calendar year. We also talk about looking for a reversal in crude oil and the break down in the British Pound on the charts. Click here to listen to the latest episode of Turner’s Take Podcast
CORN | The Sept 1 Grain stocks were a bullish surprise for corn but we still have plentiful old crop stocks with 2.295 billion bushels available. While this was below most analyst estimates, we still have burdensome corn stocks. We continue to like selling short straddles on corn as we see this market range bound for the rest of the year. Only South American planting issues can rally us past $3.80 at this point. Our range for Dec Corn is $3.30 to $3.75.
SOYBEANS | Soybeans stocks at 301mm bushels is bullish but the market will not be able to get to $10 or higher without South American weather issues or eye popping demand from China. Field reports for new crop have been very, very good as many farmers can’t believe how good the yields are after this growing season. I would not be surprised if the final national yield is 50.0 or higher for soybeans come January. We have a neutral outlook for soybeans in the next couple of months, but in the longer term we are bullish. This time last year we thought ending stocks would be 500mm. Today they are 301mm. We had a huge crop in the US last year and in South America. Obviously the demand for soybeans and protein is high and is a continued demand driver. At some point the US or South America will have a production issue and that could be very good for soybean prices down the road.
For now we are neutral beans. We like selling short dated options to collect premium for the next month. Any premium we gain we will look into buying put spread for farmers hedging new crop. For hedgers we want to own put spreads for downside protection but leave the upside completely open.
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