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Turner's Take Ag Marketing | CBOT Breaks on Better Weather

By: Craig Turner, Senior Risk Management Consultant

Turner's Take Ag Marketing
 
Craig Turner
Senior Risk Management Consultant
Turner's Take Podcast

GRAINS | Corn is leading the CBOT lower after weather forecasts turned cooler in the central Midwest.  Pollination weather is getting better and new crop is down 25 cents since the close on Friday.  Dec corn should test $7.00 today.

Dec corn should be volatile over the next few weeks as weather patterns change.  Farmers should use rallies to catch up on sales.  End users will continue to get coverage over the short term and look for prices to break later this year and in 2023.  There is greater risk for prices going lower than higher at the moment.  Farmers who are undersold should consider forward contracting additional bushels while the board is over $7.  You can always buy it back on paper with limited risk strategies. 

Wheat harvest in KS is in full swing.  Winter wheat tends to put in a seasonal low during June and July as new crop supplies come to market.  This year should be no different.

 

OILSEEDS | Oilseeds around the world are weaker.  Canola, soybeans, and palm oil are all off 10% to 15% from recent highs.  Palm oil demand is lower month over month during a period where more product is coming to market due to harvest.  The canola balances looks better for new crop as the market only needs to price ration 1 MMTs of exports instead of 7MMTs.  Soybeans could be $13 with 90+ mm acres and a 51.5 or better yield.  Soybean oil is about 15 cents off the highs and the 200 day moving average comes in around 67 cents per pound.  

I'm not overly bearish on oilseeds right now but we have had some very high prices recently and we are going to have a decent new crop. That will put pressure on prices.  I would not be surprised if new crop soybeans go to $13 at some point, new crop canola to $800, and soybean oil is back in the 60s.  Long term fundamentals for oilseeds are still bullish but the market really got ahead of itself with the drought in Canada last year, the drought in S. America over the winter, and then the war in Ukraine. Those are three major bullish developments for oilseeds that happened one after another.  We should get a very good crop this year for US soybeans and Canadian canola and that will help ease oilseed prices.

 Craig Turner
800.958.9470 Toll-Free
312.706.7610 Local
312.706.7510 Fax
craig.turner@stonex.com
@Turners_Take
 
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