Grain Hedge podcast

In this week’s podcast we go over our thoughts on the stock market and why it tends to have a bullish bias over time. We talk about the range bound nature in crude oil and why we might be seeing some “buy the rumor, sell the fact” in Natural Gas next week.  We dive into why cocoa and sugar might be bearish while coffee has more potential as a bull market.  Then we wrap up with why we need corn to gain on soybeans for new acres and what to look for in hogs and cattle.  Make sure you take a listen to Turner’s Take podcast!

We are now in the first full week of trading in 2019 and the markets are trading higher for the most part.  The US dollar is down and metals are struggling a bit, but the stock market, crude, grains, and livestock are generally higher.  We go over all the major futures market sectors and give our opinions for each in the latest episode!

Today is the last trading day of the year and it should be relatively quiet.  President Trump over the weekend tweeted that the US and China are making “big progress” on trade talks.  China says they are willing to meet the US “half way” on the Intellectual Property disputes.  We are also waiting on China to buy more ag products from the US. The market expects another 2mm mt of soybean purchases.  

The holiday markets have been all over the place during the past few trading sessions.  Today we are getting a relief rally and it remains to be seen if this is a true reversal.  The problem is the low volume.  One can make the argument we probably went down to much during low volume last week and Christmas Eve and now we are coming up too fast on low volume today.  That is how it is around the holidays if the market is volatile. 

The FOMC announced rate hikes of 0.25% yesterday, bringing the overnight Fed rate to 2.25% to 2.50%.  The market took this as bearish as they hoped the Fed we ease off interest rate hikes in the face of the stock market correction.  Lost in the bearish mood is the fact the Fed only sees 2 rate increases in 2019, which is less than the 3 to 4 that had been expected.  

China bought 1mm mt of soybeans this morning and the market is expecting at least another 1mm mt before the weekend. 2mm mt is just under 80mm bushels. Assuming this is all in old crop sales, carryout goes from 950 to 870.

The US and China reached a trade truce over the weekend at the G20 meeting. For now the market is cautiously optimistic about the deal. Shorts covered today but we did not see new buying. For the markets to rally further we need to see real export demand come to the US from China

The G20 meeting is Friday and Saturday in Argentina.  The G20 is a group of leading economic nations who get together to address pressing economic issues.  During this meeting nations will get together who need to address specific issues just between them.  There are two of these discussions that are of particular note to our markets.

Happy Thanksgiving! In this week’s podcast we go over the big movement in Natural Gas. Then, I talk about some of the special podcasts I plan to do, like trading in limit markets, in-depth looks at the spread markets, and many more. So be on the lookout for those! Finally, we finish up with the grain and livestock markets.

Stocks and crude oil have been lower since late September. The US midterms have helped stabilize the stock market but crude oil is still lower due to increased output and concerns of global growth slowing.