If you are not a subscriber to Turner’s Take Newsletter then text the message TURNER to number 33-777 to try it out for free! You may also click here to register for Turner’s Take.
Jan vs March Soybeans
January 2021 soybeans are trading 16 cents over March 2021. Below are two charts. The first is the current Jan vs March spread. The second is a 40 year Jan/March spread chart from Moore Research (MRCI). The years when Jan traded at an inverse to March we had tight US domestic stocks. If the US has adequate to burdensome stocks, then Jan trades at a carry.
I think the Jan vs March spread is an important spread to watch. Nov and Jan are strictly US new crop soybean export months. South America starts to harvest early soybeans in February. The earliest South American soybeans are available on the global export market are for the March contracts. So Jan is the last month when the US is the only game in town for soybean exports. March soybeans can represent both US and the start of South American exports.
What does this all mean? It means the market thinks there is a risk that the US could be tight in new crop and will need to have some level of demand rationing until 2021 South American soybeans are available on the global export market.
Do I want to trade this spread? Not really. But I do want to follow it because I think soybeans have potential to rally this year. This spread is telling us the market is already concerned about new crop tightness. I recently spread SX vs CZ and that is my spec position of choice right now when it comes to soybeans and corn. I’ve thought about getting long SX20 vs SX21 or just buying soybeans outright. I think they are all possibilities at this point. If the WASDE has new crop soybean ending stocks in the 300s on Tuesday, China starts buying more US soybeans then expected, and we get some weather issues, we could start seeing some strong price action in these spreads but also the flat priced futures too. Stay tuned!
If you are interested in working with Craig Turner for hedging and marketing, then click here to open an account. If you want to work the Craig Turner as a speculative or online trader then please click here.
Jan vs March Soybeans
MRCI Jan vs March Soybeans 40 Year Historical Chart
About Turner’s Take Podcast and Newsletter
If you like this content then please sign up for a free subscription of Turner’s Take Newsletter & Podcast.
Craig Turner – Commodity Futures Broker
Turner’s Take Ag Marketing: https://www.turnerstakeag.com
Twitter: @Turners_Take
Subscribe to Turner’s Take Newsletter & Podcast
Turner’s Take Newsletter & Podcast - Turner’s Take is a complimentary weekly market commentary newsletter that covers the Grain, Livestock and Energy futures spread markets using fundamental, technical and seasonal analysis.
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.
