Tuesday, January 23, 2018

Grain Market Thoughts

HRW BASIS; inverse and pro scale inverse; selling carry as far out as possible while capturing basis and protein. Cost for high pro HRW could be over 1.50 a bushel. Watch MPLS - KC spread for HRW basis direction. A rally from KC dryness could pressure HRW basis if KC looses ground to MPLS. SFS stocks; feel huge; 90% of the big sunflower producers in central SD have 25-50% more sunflowers then ever. Lack of solid competition; and overbought buyers are slow to pick up; price outlook doesn’t feel as good as it once did. This feels like it is becoming a big time buyers market in a hurry. Be proactive or be prepared to drive price down on yourself. We need demand and need some supply chewed threw. Oils content lower then past few years; takes away competition. Positive has been goodland KS pulling out of area. And if we continue to see most flowers going to the crush we do give us relief from quickdown sidemovement. Birdseed demand doesn’t support prices with current available sunflower supply. New crop demand for acres seems to be the only thing holding up old crop sunflower prices. Sell the carry. Milo basis; huge inverse Soybean old crop new crop spread; near even money; more new crop beans and hold more old crop beans Corn basis; elevators north of me leading the way the past few days; very aggressive new crop bid; Big risk to downside if we get something the sparks heavy movement Farmers selling for cash flow more then recent memory Most farmers have pitched Texas Hedges long wheat; maybe gives us chance for bottom Very Dry weather might cause basis to stay strong. No margin for end users and elevators in beans, heavy competition. Corn margins variable as is basis Implied volatility is very cheap; meaning market not pricing big move. Don’t sell too cheap of options More producers looking for speciality crops Tax law ending impact still to be determined; presently favors doing business with the Cooperatives Have plans for your have to’s so you don’t puke sell. 25,000

Monday, September 21, 2015

Nice little bounce for the grain markets

Nice little bounce the markets had today.  Big question is why?  Wall street just decide to buy everything today?  Including the commodities and the grains?

Wheat had a rather sharp bounce when the markets opened up this a.m. after being lower in the overnight session.

Some charts have moved up near areas where we could struggle; but a break of resistance could open up the upside potential in a hurry too.