The macro markets are turning bullish as the US government nears a budget deal and the US & China make progress on trade. The S&P is now above the 200 day moving average. This should all be supportive of the overall markets. Ag and Energy traders will be watching the US/China negotiations at all times. We go over our ideas on corn, soybeans, crude, RBOB gasoline, hogs, cattle, coffee, sugar, and cotton. Make sure you take a listen to the podcast!
The WASDE came out today and all the estimates came out as expected. I can not remember a more uneventful report with so much data being released. It is clear that the market is waiting on a US/China trade deal resolution. Going forward we see the markets are range bound and we will trade them accordingly starting Monday. Make sure you take a listen to Turner's Take Podcast for a deeper dive into the report!
The February WASDE is tomorrow and it is a combination of the January and February reports. We will see Quarterly and Annual Stocks and Winter Wheat Seedings. This has the potential to be a volatile report for the grain and oilseed markets. Make sure you take a listen to the latest Turner's Take Podcast!
The US government is back open, we will have a WASDE report on Feb 8, and the US/China trade talks are back on. South American weather is stabilizing, US new crop acreage estimates are coming in, and the USDA will start announcing export sales data starting tomorrow. A lot is going on and you need to stay informed. Make sure you take a listen to the latest Turner's Take Podcast!
Informa came out with estimated acres and pegged soybeans at 86.2mm and corn at 91.5mm. Based on the conversations I've had with farmers since the new year I tend to agree with these numbers. 91.5mm acres and 178 trend line yield keeps corn under 2.0 billion carryout, which I think is neutral. It can be bullish with more export demand and spring planting/summer weather issues. 86.2mm for soybeans with a 50 trend line yield puts new crop ending stocks around 600. Not great. That is already...
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...
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.
The US Employment Cost Index increased 0.8% in the 3rd quarter, the Labor Department said today. For the year the index is now up 2.8%. Wages and salaries are up 2.9% in the last 12 months through September. That is the biggest gain in 10 years!
The Export report was bearish for corn, soybeans, and wheat. The market wants to see wheat sales to justify $5 prices. The corn and soybean market seasonally enjoy increased export sales this time of year but that has not been the case.
High Natural Gas demand (for cooling) this spring and summer had drawn down stocks more than expected. The early start of winter and forecasts of a colder winter could be supportive of Natural Gas until February. Coffee has broken out higher as Brazilian producers threaten to limit supply in order increase prices (sounds like the coffee version of OPEC). Gold has consolidated as the stock market stabilizes with support coming in at $1220.