10-04-2012 01:00 PM - edited 10-04-2012 01:04 PM
I have picked the brain of one of my favorite floor sources. I hope this helps you and anyone else that wants to get educated on what the markets could look like going forward. In his own words:
"Record high prices at harvest… record speculative position long… Duetch Bank index rolls that sell Nov beans Oct 2nd through the 8th…China on a week holiday..and fear of larger yields in beans… all contributing to the price decline… most of these concerns will be swept aside after the Oct 11th report…
Most look for second coming in the grain markets… and a return to strength based on the short world supplies that are getting tighter in feed grains and the extra ordinary demand pace already in play in beans…both crush and exports have been running higher than USDA projections…
The USDA has fit data to maintain a carryout… so that they are implying a 700 million decline in soydemand(rationing) from base line numbers over the last several years… this implied rationing at the start of the marketing year assumes high prices will be meaningful to demand… but for every bushel of slow down in EU demand where recession has reigned, the Chinese are making up the difference. So, that we are at 78% if implied USDA exports, already sold, this leaves USDA little choice but to raise exports on subsequent Supply and Demand report. We assume a 2 bushel increase in yield and a 1 million increase in planted acres, with harvested up 800-900,000. But, this seems odd given the statistical histor. None the less, anecdotal comment off the farm has spooked the trade.
Most want to buy beans after the Oct 11th report just don’t know if that is down 50 cents or up 50…
The large sales to China and others can be rolled forward or cxled in lieu of cheaper alternatives out of Brazil for March forward shipments… assuming they have a record crops and can lift bean exports at a record pace… but that is the challenge to the bear over this winter/Spring," he says.
10-04-2012 02:32 PM
Thanks much mike,
Had gotten some warning about a roll out of beans, I had assumed funds, but did not think it was still happening.
Thanks for the response, much more than I probably deserved.
10-04-2012 04:11 PM
I keep rollin that last paragraph around. That's one of those good "brother-in-law" deals. I'm gonna ask my input supplier for a deal like that--------lock in a price and supply---someday in the future---whenever the better deals stop showing up ------ I will take it--------------------eventually------------------