Podcast: Play in new window | Download
Subscribe: Apple Podcasts | Android | RSS | Subscribe to Turner's Take Podcast
The USDA released the Oct WASDE at 11am central and the report is less bearish than expected, which is causing a modest rally in the grain and oilseed markets.
CORN | Corn yield was adjusted LOWER to 180.7 from 181.8 last month. While new crop production is estimated lower, old crop stocks were raised by almost 140mm bushels. The market was expecting the larger old crop number because due to last months Sept quarterly stocks report. New Crop ending stocks did INCREASE so that is technically bearish, but it did not increase as much as feared, hence the rally.
SOYBEANS | Harvested acres came down 0.6mm acres but yield increased 0.3 bpa (expectations were a 0.5 increase). That lowered expected new crop production but old crop stocks increased by 40mm, which was expected due to the Sept 1 stocks report. The net is new crop soybeans stocks increased to 885mm bushels. That is not bullish. However, it is not as bearish as the market had feared and that has led to a modest rally after the report
WHEAT | Wheat was neutral as the USDA did not make many changes to the US or the World numbers. The bulls will be disappointed as they want to see lower global production and more US export demand.
MAIN TAKEAWAYS | This report is moderately bullish for corn. A close above $3.70 could push prices to $3.75. At that point the market still has to consider we have a 1.8 billion carryout and corn supplies do not need to be rationed. The way past $3.75 will need very good export announcements and/or harvest delays/losses. This report is neutral for soybeans. 885mm ending stocks will cap soybean rallies until we replace the export demand we lost from China AND we see a reduction in US soybean acres. For now soybeans will be range bound, but the range will be large. High $8s to low $8s until something changes materially with tariffs or acres.
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
312-706-7610
cturner@danielstrading.com
Twitter: @Turners_Take
Try Turner’s Take Ag Marketing – for 30 Days
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.
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.
