Play Turner’s Take Podcast Episode 186
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Corn and soybeans are consolidating while the Crop Progress reports confirm slow planting.  If there is going to be a next leg higher in these markets will have to come from yield reductions.  From what we are hearing, next Monday the USDA will release the first corn crop conditions report. That will let us see what is rated Good/Excellent and what is Poor/Very Poor.  We expect soybean conditions to be released the week after.  We go over our Supply & Demand estimates to estimate what it will take to send corn and soybeans to the next leg higher.  Make sure you take a listen to Turner’s Take Podcast!
Corn & Soybeans
Below are my latest Supply and Demand tables. Many of your will think my middle columns are too conservative and we should jump right over to the right columns.  I don’t want to go below a 165 yield in corn or a 44.4 yield in soybeans until we see crop condition reports.
CORN – Notice that as acres and yield comes down, imports have to go higher, and feed/ethanol/exports have to go lower. This is price rationing.  This is why Dec19/Dec20 is at at 24 cent inverse.  For corn to make new highs I think we have to be sub 85mm acres, sub 165 yields, or a combo of both.  Crop Conditions will be key to this next week.  When we see crop conditions we can estimate yields.  Until then I think we continue to consolidate in corn (and soybeans).
Spec traders and farmers looking to get long should take a look at short dated corn options ahead of the Monday crop conditions report.  I will make some recommendations in Turner’s Take Market Alert and Turner’s Take Ag Marketing later this week.

SOYBEANS – Notice how Crush and Exports do not have to come down as acres and yield come down.  We have so much soybeans that price rationing is not needed yet.  That is why Nov19/Nov 20 is at a 30 to 35 cent carry.  Price rationing probably starts at 82mm acres and a sub 44 bpa yield.  SX19/SX20 will tell you when that starts to happen.  If you want to get bullish soybeans then I like that spread better than calls to play the upside.  We have a lot more room for error in the S&D table for beans than corn.  ASF, the China-US trade war, and the big S.Am production hurt beans more than corn.  I like beans but at the moment corn has more potential to go higher.  If the crop conditions report is bullish when it comes out in two weeks, farmers may want to start thinking about 2020 and 2021.

 

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!
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