Turner’s Take Podcast | Fed Chairman Powell Says Inflation No Longer “Transitory”

New Podcast

In this week’s podcast we go over what Fed Chairman Jerome Powell meant when he told Congress inflation is no longer transitory.  If inflation is not transitory then it is structural.  Powell acknowledged the “risk of higher inflation has increased” and now the market will expect the Fed to accelerate their tapering along with two or three interest rate increases in 2022.  We also go over our views on the energy and ag markets, why we like old crop corn and soybean oil, but are sellers of new crop wheat.  Make sure you take a listen to this week’s Turner’s Take podcast!

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.

Energy

Crude Oil found support today just above $62, which was support tin May and August this year.  Crude was able to trade about $5 off the lows at the close, and this was after OPEC announced they would pump more oil.  This type of buying at a major support level, in the face of bearish news, is usually the sign of a low.  Crude needs to hold $62 or it could go down to the March lows of $57.

Continuous Daily Crude Oil Chart

Grains & Oilseeds

United Airlines flew a 737 yesterday from Chicago to DC with one of the engines running 100% on Sustainable Aviation Fuel (SAF), aka biofuel.  This is another example of why I am bullish vegetable oil (soybean and canola) for the foreseeable future. It would be nice to see the EPA comment on biodiesel mandates but that might not happen until President Biden gets his Build Back Better deal sorted.

Corn is currently in a range between $5.50 and $5.95.  For corn to break out over $6.00 there has to be a real S. American weather threat.  The Buenos Aires Grain Exchange released a report warning the market of a potential drought in Jan/Feb due to La Nina conditions.  I find it hard to put a lot of stock in long range weather forecasts but this is a story to follow. US and global corn stocks are tight and a major weather issue in Argentina and S. Brazil could send corn over $6.20 if the market thinks S. Am production could come down 5% or more.

I like buying the May Corn $6.00/$6.70 call spread and selling the $5.50/$5.00 put spread for around even money.  If the market tanks then we have limited risk to the downside. If there are real issues in S. America or we have lower than expected US corn acre due to the fertilizer situation, we can always roll up the $6.70 leg on the call spread.

Continuous Daily Corn Chart

About Turner’s Take Podcast and Newsletter

If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes! Craig Turner – Commodity Futures Broker 312-706-7610 cturner@danielstrading.com Turner’s Take Ag Marketing: https://www.turnerstakeag.com Turner’s Take Spec: https://www.turnerstake.com Twitter: @Turners_Take Contact Craig Turner