Turner’s Take Podcast | Soybean Outlook
Turner's Take Podcast

Play Turner’s Take Ag Marketing Podcast Episode 263

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Today we take a deep dive into soybeans and where we think old crop and new crop prices could be going.  We also talk about soybean oil, corn, and the KC vs Chicago wheat spread.  Make sure you take a listen to this week’s Turner’s Take Podcast

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Soybeans

We are still bullish soybeans but our range remains $12.00 to $15.50 based on the current carryout estimates.  Rains are falling in South America and that should help stabilize the crop.  The correction in prices has lead to greater export demand.  Time will tell if Arg and Brazil have the beans or not.  If production is lower this season we could see soybeans at $15 later this winter or early spring.

Below is my supply and demand table for old crop and new crop.  For new crop we are estimating 91mm acre and 50.5 bpa.  At those levels the US new crop production equals the total usage.  Soybean stocks are still around 140mm bushels and a 3% stock/usage ratio.  The bull market in soybeans should be a two year story at minimum.

Interested in working with Craig Turner for hedging and marketing?  If so then click here to open an account.  If you are a speculative or online trader then please click here.

Soybean Oil

Below is a chart of annual global vegetable oil stock/use and soybean oil highs dating back to 2006.  For soybean oil prices I rounded to the nearest cent.  The point of the table below is to show how global vegetable oil usage has inelastic demand. It doesn’t seem to matter what vegetable prices are any given year.  Demand has grown year-over-year since 2006.  It grew during the drought years. It grew during the Chinese ASF and tariffs years.  Demand is expected to grow this year and most likely next year too.

Moral of the story is global vegetable oil is in tight supply.  Soybeans are in tight supply.  In 2008 soybean oil traded as high as 70 cents/lb.  In 2011 to 2013 period soybean oil was consistently in the 50s.  We think price go back to the 50s this year and next year until global soybean supplies can be build back up to adequate levels.

Interested in working with Craig Turner for hedging and marketing?  If so then click here to open an account.  If you are a speculative or online trader then please click here.

Corn

Below is my corn supply and demand table.  Stocks are low but not tight enough to push old crop above $6 or new crop above $5…yet.  I am getting a lot of calls about the July vs Dec and Sept vs Dec corn bear spread.  July is 70 over Dec and Sept is 25 over Dec.  I’ve always liked trading the Sept/Dec spread when it gets to 25 or over.  Keep in mind this spread traded to 70 cents over in 1996, 60 over in 2011, and 40 over in 2013.  Eventually this spread comes in and many times goes back to a carry and possibly 15 cents under.  See the chart below the supply and demand table

Interested in working with Craig Turner for hedging and marketing?  If so then click here to open an account.  If you are a speculative or online trader then please click here.

Wheat

As I said last week and on the podcast today, I think KC eventually goes 20 over or higher against CHI in new crop wheat.  Acres are expanding at a greater pace in Chicago than KC.  Demand is better for KC than Chicago.  That means on a percentage basis Chicago is gaining supply while KC is gaining demand.  Based on our supply and demand expectations, we see the HRW new crop ending stocks having a tighter stock/usage ratio than SRW.  That has not been the case for years and why Chicago has been traded over KC.  We believe this changes with the new crop and why KC could trade between 20 to 60 over Chicago in the coming years.

Interested in working with Craig Turner for hedging and marketing?  If so then click here to open an account.  If you are a speculative or online trader then please click here.

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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This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

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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.