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Home / Futures Blog / Turner’s Take | WASDE Neutral for Corn and Soybeans

Turner’s Take | WASDE Neutral for Corn and Soybeans

November 8, 2019 by Craig Turner

WASDE Neutral

The USDA made small changes to the corn and soybeans supply and demand tables.  Corn yields came down to 167.0 from 168.4.  Bulls were hoping form more than a 1.4 bpa decrease.  The NASS did not lower harvested acres after the MN and ND resurvey.  They addressed this in their special note in the report.

If the USDA lowers yields again we think it will not be until the January report.  Between now and then there is not much bullish news for corn unless South America has serious weather issues.  We see Dec Corn in a range between $3.65 and $3.95, which the lower end more likely between now and First Notice Day.  Traders who want to own corn may want to wait until after FND and get long in early December.

As for soybeans, the only thing the USDA changed was the Crush by 15 million bushels.  Soybeans will most likely be range bound between $9.10 and $9.50.  Potential bullish catalysts are the US/China trade deal and South American weather.  I like buying soybeans on the breaks.  We think yield will come down 1 bushel in the Jan report and Phase One of the US-China trade deal gets done at some point.

Going Forward

Below are my Supply and Demand tables for corn and soybeans.  The left column is for old crop, the middle is new crop, and the right column is next year’s crop.  Soybeans should be supported at $9.00 if new crop carryout is in the high 400s and next year is projected to be in the low 500s.  Over the next six to eight months soybeans has the potential to trade $9.50 to $10 IF there are S American weather issues, US weather issues this spring/summer, or a US-China trade deal that involves soybeans.  It doesn’t take a whole lot to lose 100 to 200mm bushels of soybeans when you have two growing seasons (S.Am and the US) ahead of us.

As for corn, we like selling rallies.  The 2020-21 balance sheet for corn looks very bearish.  If our projects are correct corn a year from now could be $3.20 or $3.30.  Dec 2020 is $4.01.  March 2021 is $4.11.  If you plan on planting corn next season I would look to sell some futures or buy puts and put spreads for hedges.  We likes selling Dec 2020 at $4.05 and March 2021 at $4.15. We like the Dec 20 vs Dec 21 bear spread at a 10 cent carry or better.

Corn Supply & Demand Scenarios

Soybean Supply & Demand Scenarios

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Craig Turner – Commodity Futures Broker
Turner’s Take Ag Marketing: https://www.turnerstakeag.com
Turner’s Take Spec: https://www.turnerstake.com
Twitter: @Turners_Take

Contact 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.

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.

Filed Under: Turner's Take, Turner's Take Podcast

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.

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.

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