Play Turner’s Take Ag Marketing Podcast Episode 297

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NEW PODCAST

In this week’s podcast we start off with the Fed announcement and why we think the US Dollar Index will strengthen and why the CAD and EU will weaken.  We then move onto February Natural Gas and why you should not hold positions into Last Trading Day (LTD).  We end the podcast with our thought on the grain and oilseed markets and why our favorite picks for the spring and summer is corn and soybean oil.  Make sure you take a listen to Turner’s Take Podcast!

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NATURAL GAS

If you have an account with me I may have called, emailed our texted you when a position is a week away from First Notice Day (FND) or Last Trading Day (LTD).  We always want traders to get out of a market either the day before FND for grains or LTD for energy.  Only commercial traders and accounts involved in the delivery process should be involved in the markets on last trading day.  The markets get thin, it is hard to get in an out, and if you have too many specs on one side of the market you can get some unbelievable price action.

February Natural Gas is a perfect example.  We had a $3.00 trading range in Feb while March was only up $0.30 cents.  If I had to guess, someone was assigned a lot of short positions last night (after Feb option expiration) and they had to buy them all back today.  A $3 move in NG is $30,000 per contract.  Moral of the story – don’t carry positions into delivery periods or into Last Trading Day.

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Feb Natural Gas – Last Trading Day

GRAINS

Wheat rallied hard as Russia escalated tensions with Ukraine last week.  The past two day wheat prices have come down as the two nations, NATO, and the US are in diplomatic talks.  If talks break down wheat can go right back to where we were in the beginning of the week.  Below is the US Drought Monitor.  Much of the HRW wheat crop area is dry.  The western Midwest and Southwest are in dire need for precipitation.

Arg Corn GD/EX rebounded this week to 32% from 22% last week.  GD/EX was nearly 60% at the end of 2021.  Rains in Argentina have stabilized the crop but damage to yields and quality have been done.

Brazil second crop corn is in pollination in March/April.  While much damage has been done to soybeans there is still time for corn to have a good growing season with improved weather.  The better corn in S. America will likely come at the end of the harvest season which could lead to more US export demand in the short term.

OILSEEDS

March Malaysian Palm Oil hit new all time highs this week, Canola has been trading over $1000, and March soybean oil hit contract highs for this time of year. Indonesia is limiting exports to keep the cost of cooking oil lower for domestic use.  Brazilian state Parana estimates soybean production losses of 6mm MT, over 30% of their crop.  Private estimates have total Brazilian soybean production between 130 to 135 MMT, which is 5 to 10 lower than the USDA and CONAB.

Soybean oil was trading in the high 40s this time last year.  We are now in the mid 60s with export demand greater and domestic biodiesel production increasing.  I continue to like buying July call spreads and selling put spreads.  Since 2006 global demand for vegetable oil has increase almost 4% per year with no negative growth years.  Demand is very inelastic and renewable biodiesel mandates are expanding.  Soybean oil is arguably the best bullish story in the grain market today.

Soybean Oil Daily 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

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Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

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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.