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Jeff_a_Caldwell
Posts: 971
Registered: ‎04-29-2010
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Roach is bullish; China a big wildcard

That's what I got from John's chat last week at the Land Investment Expo. He talked a lot about selling in these 'oscillations' in the market, and that in general, we'll trend higher in prices from now through at least early summer, then probably hit a harvest low, which will be the bottom of a "new plateau" in prices. He did issue one sort of warning: We need more soybean acres this year, he said, but when we're selling into a "1-country" market (aka China), we may not have a clear signal for bean prices based on China's propensity toward fudging the facts at times when it comes to grain stocks, etc. 

 

So, do you buy it? Here's more from John's talk last Friday.

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Jeff Caldwell
Agriculture.com Multimedia Editor
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Jim Meade / Iowa City
Posts: 2,397
Registered: ‎04-30-2010
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Re: Roach is bullish; China a big wildcard

Roach seems to be thinking typical seasonal will be back in style this year.  It would seem to me that would depend on a typical carryout scenario.  Many other marketers are focused on the likeilihood that we'll have more produciton in '14, maybe even another record.

 

Why will we have more production?  Dr. Chad Hart of ISU pointed out some reasons in a Crop Advantage lecture yesterday in Iowa City.  He showed that the southeastern and southern portions of the country had record corn crops in 2013 and good marketers would have had the chance to sell for good profits.  His contention is that farmers who grow a rrecord cropare not quick to switch to something else, so he is watching the March report to see what it shows.  The corn belt is going to grow corn and soybeans because that is what we grow.  The corn belt will not be the place to see a significant drop in corn and soybean acres.

 

If thta scenario plays out, about the only play will be weather.  That might support some regularly scheduled sales such as Roach predicts but it might be that waiting for an up trend could be risky.  If a person subscribes to Dr. Usset's suggestion from Minnesota and does not sell below the cost of production and waits for an uptick that may not come, one might miss the few opportunities to break eave.  

 

Roach would probably contend some opportunities are historically likely to come.  The question I have is how does one know,other than hindsight, when and at what price to pull the trigger?  This could be a year of "woulda, coulda, shoulda" for all grain marketers.

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roarintiger1
Posts: 1,543
Registered: ‎04-29-2011
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Re: Roach is bullish; China a big wildcard

Yeh boy! That's what I'm waiting on..........the chance to break even........and just a few opportunities to do that........geez.....

 

"and somewhere in the darkness, the gambler, he broke even.   And in his final words I found an ace that I could keep."

 

The glass is half full folks.

"Failing to prepare is preparing to fail." "Success happens when preparation meets opportunity"
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Palouser
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Registered: ‎05-13-2010
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Re: Roach is bullish; China a big wildcard

I'm very firm on a number of trends. First, global ending onventories are NOT burdensome in my opinion. The other related trend is grain and soy are moving out at above expectations. Further, soy in N Am is going to probably be critically tight. In that case soy prices WILL rise.
Just as we are globally a residual supplier to some because of our location for some grains, shipping insoy has a cost, especially if domestic feeders and processors must keep the price up to encourage the final domestic supplies to be sold.

At these lower prices I do see the China gov restocking reserves.

Meanwhile it seems likely that if soy starts surging in N America not only will it support or raise global prices but it may encourage domestic farmers to plant more beans instead of some corn on corn if fertilizer stays high.
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rayjenkins
Posts: 668
Registered: ‎05-13-2010
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Re: Roach is bullish; China a big wildcard

Soybeans will be a basis play, not flat price....

 

If South American crop comes to fruition, you could be looking at $ 2 N/X inverse

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Jim Meade / Iowa City
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Registered: ‎04-30-2010
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Re: Roach is bullish; China a big wildcard

It is possible that South American infrastructure is part of the current soybean price.  There has been talk of bringing Brazilian beans into the south and east coast this summer, just as the ethanol demands could be met by Brazilian cane ethanol.

 

China reserve stocking would seem to be a function of price and policy.

 

My guess is that corn belt farmers who have been thorugh some corn challenges the last couple of years may thinking about balancing their rotation, though I doubt if this will b e very significant.  It is what used to be called the fringe states that will determine corn and soybean prices this coming year.  What is fringe now?  Is that changing?