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Home / Futures Blog / Turner’s Take: HRW Wheat Leads Grains Higher – January 30, 2018

Turner’s Take: HRW Wheat Leads Grains Higher – January 30, 2018

January 30, 2018 by Craig Turner

Latest Podcast | On this week’s podcast we talk about why HRW wheat is leading the market higher, why we think corn is still a range bound market, and why we think soybeans can trade in a $4.00 range in 2018.  I also go over why we are bullish wheat in the long term (it has to do with acres).  Click here to listen to Turner’s Take Podcast


WHEAT

We have a good old fashioned short covering rally in wheat.  Below is a table of the winter wheat ratings for selected states.  KS and OK are in very rough shape.  As a result HRW wheat is up about 50 cents in the past week.  The funds are heavily short and they have no choice but to reduce their position.

For clients that have access to www.turnerstakeag.com, I have an updated Supply and Demand table for wheat that includes 2018-19.  We will not see the USDA update the market on 2018-19 until May but based on my numbers it is going to be a bullish surprise – and I haven’t even taken into account yield reductions yet!

Turner’s Take Ag Marketing Wheat Supply & Demand Tables

Wheat Ratings Chart

March KC Wheat Chart

March KC Wheat

CORN

Corn is a follower in this wheat rally.  I have heard the stories about Arg hot and dry weather but better conditions in Brazil seem to cancel out the Arg concerns. The fact is SRW is up 35 to 40 cents and HRW is up 50.  Corn is up 10 in the same time.  If wheat did rally like this I have a hard time believing corn would be up even 5 cents during the same period.

I am a bull on corn but not just yet.  I think we are seeing the funds having to liquidate positions.  Farmers should use this opportunity to dump old crop and get some new crop sales booked if they have not started yet.

SOYBEANS

Funds are also covering soybeans.  Based on the South American crop and US acres I can see beans trade up or down $2.00 from here.  That is a $4.00 possible range.  My biggest concern for beans is we are expecting an increase in US acres this year. If we get 91mm or 92mm acres and above a trend line yield we could be in the $8s come harvest. If we have less acres and below a trend line yield we can trade to $11 and maybe even make a run at $12.

Spec analysis and trades will be published by Turner’s Take Market Alert and hedge analysis and recommendations will be publish by Turner’s Take Ag Marketing

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Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

Filed Under: Turner's Take

About Craig Turner

Craig Turner is a Senior Broker at Daniels Trading, author of Turner’s Take newsletter, and a Contributing Editor for Grain Analyst. Craig is often quoted in the Wall Street Journal, Reuters, Dow Jones Newswire, Corn & Soybean Digest, and also makes appearances on SiriusXM – Rural Radio Channel 80 providing commentary for the Grain and Livestock markets. Craig has also been featured in FutureSource’s Fast Break series, Futures Magazine Online, and INO.com. Mr. Turner has a Bachelors from the Rensselaer Polytechnic Institute (RPI) where he graduated with honors and has worked at the NYSE and Goldman Sachs. While at Goldman, Craig earned his MBA in the NYU Stern executive program. Learn more about Craig Turner.

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Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

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