Corn and soybeans continue to sell off as we approach first notice day. Farmers will be selling corn as they deal the end of basis contracts and storage periods. We see corn being pressured lower into the end of the week. We see corn prices stabilizing starting in September. Low prices are expected to attract demand and once the large crop is priced in and farmers liquidate old crop we should see better days ahead for corn next month.
US corn is the cheapest feed grain on the global export markets. A deal between the US and Mexico that will replace NAFTA has been agreed upon and that will support corn as well. Farmers are unlikely to make additional cash sales once August 31st passes.
Soybeans are a different story. The large crop could see soybean ending stocks reach 800mm bushels. Without a deal with China for exports we could see soybeans trade sub $8.00. Cash will be sub $7.00. The soybean market could have some real issues without Chinese demand. Even if the US went from 90mm to 85mm acres next year that only puts ending stocks at 500-600mm in 2019. If you have only 85mm acres next year AND China comes back to our export market, only then are ending stocks closer to the 300-400mm range.
Wheat is stabilizing in Europe and we are seeing cash sales come back to the global market. Egypt is buying Black Sea wheat and that has stopped the selling for the most part. We expect US wheat to see more export interest as we head into the fourth quarter of 2018.
While the podcast does not have specific actionable trading recommendations, we do publish them in Turner’s Take Market Alert for spec traders and Turner’s Take Ag Marketing for hedgers. Want to know what to look for in the commodity futures markets? Take a listen to Turner’s Take podcast!
Craig Turner – Commodity Futures Broker
Turner’s Take Ag Marketing http://www.turnerstakeag.com
Turner’s Take Spec http://www.turnerstake.com
Try Turner’s Take Ag Marketing – for 30 Days
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.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
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 third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.