Will You Sell Nov 17 Soybean Futures At $10?

[JimMeade]

Nov beans for 2017 closed at 9.98 1/4.  Are you going to sell any beans on the board at $10?

Carryout is projected to be 395 million bushels, but if big crops get bigger the carryout could be bigger yet.

Prospects for 2017 include increased US and South America production.

High yields this year make one wonder if next year's yields might also be high.

Exports may be key and high prices depend on China being in the market.

Oil is holding up bean prices and if other vegetable oils get competitive beans may feel the pinch.

If input costs still pinch, soybeans are cheapter to plant than is corn.

If the dollar stays strong, exports are under pressure.

Lots of reasons to think $10 might be a good number.  Two years ago november sales paid well.  Last year not so good.

On the other hand, we are in a La Nina.  How strong we don't know yet but even if it's mild in NA it might be strong in SA.  

There's no big reason to expect that next year's yields will be high just because this year is, especially since we'll be in a La Nina then, as things stand now.

Argentina may plant more corn as their tax and control structures change.

Depending on the US political scene, the dollar might weaken.

It's certainly a long way out to hedge Nov 17 soybeans, but one can't ignore the necessity to take some action at these prices, even if the action is to stay out of the market.  One can stay out as a ploy to wait for better prices or one can stay out because one is blinded by the headlights and doesn't know what to do.

I have a lot of thinking to do.  2014 I did a good job of marketing soybeans, 2015 barely adequate.  It would be nice to have a fall-back plan that always gave one an out, but I haven't figured that out yet.

[illinifarmer]

Nov. 17 is relatively the same as current cash. You said it yourself predicditing next year even compares to this one is far and few between. Should be at least a dollar no? Nov.17 at lets say 11-12$ oh yeah everybody who watches futures would bite right.? Just to sure if the upside down market is reality who knows. Let's make a small wager soybeans in 17 suffer a -10 to -20 bu. Hit terrible I know I farm too. So soy rebounds at least 2$ anyone who jumps in the present at 10 is suffering tremendous losses for the following year. Just another thought don't read to much into it.😏

[sw363535]

The two have interesting charts as well..

I was just about to say the dec 17 futures is not paying any storage premium at all, but it looks like it might be trying to correct that issue.  Another way to put that is --Too who's benefit is it to have the early confirmation of supply/price, the buyers or the sellers?                  

 

[Hobbyfarmer]

? For you,

Is it just the $10 that gets your juices flowing?

Look at the charts... is harvest really the best time to sell or presell one year out?

Will this be the outliner year that will be the best time to do it?

If you'd sold yesterday how'd you feel today?

[nwobcw]

January beans are $9.87.  Getting awful tempted, especially after about 1 of the top 3 years ever in bean yields.

[JimMeade]

The points raised are the traditional way of looks at soybean sales.  The discussion I raised is to address those view points.  What about the projected huge carry out?  Todays prices might look good.  How about if beans go up in value?  Protect a futures sale with a call option; a synthetic put.

Historically, sell at planting time, but soybeans are now a two season crop - NA and SA, so that has to be factored in.

The question about selling yesterday vs selling today is the classic question of whether one is hedging or speculating (trading).  I'm a hedger so when I make the sale I forget about it except to watch it in case I need to exit.

It sounds like most are not comfortable with selling SX17.  No problem, I was just curious.  I haven't sold, either but am going to watch earlier this year.  Like I said, I sold early in '14 and it paid well.  Sold early in '15 and it didn't pay well but I recovered a bit in July 16.  Where I really missed was I should have bought calls in the spring - Time wrote about it.

[nwobcw]

Last year when beans were in the 8's I told myself I'd be happy with 10 bucks.  I did have 17 bpa contacted last summer at $11.16 for fall delivery.  Would have sold more but it was terribly dry here at that time, late June.  Also cotracted a few last winter at $8.83 but we won't talk about them.  Jan beans are near $10 , the figure I would have been happy with a year ago.  About ready to pull the plug on maybe 1/4.

[nwobcw]

My experience is beans are the highest for the beginning of the year the 1st week of Jan.  If you don't sell then you wait until spring as SA controls the market in Jan.-April.

[sw363535]

Jim we actually have, thanks to the possibilities you mention, a two year marketing time period for any one crop.  In my view that is the year prior to harvest and the year following.  A decision now on 17 beans would need a lot of "exit" strategy since in eliniminates most of the marketing time for that crop........ but there are certainly times we should be considering it, such as if we were looking at the peak of a two year bull market.

"What about the projected huge carry out?  Todays prices might look good. "   -- Projected carry can only be important if viewed in the context of the SD report giving its creation.  It is beginning to look like that ship has sailed.... or diesel puttered it's way to China.

"What about the projected huge carry out?  Todays prices might look good." ----- I just wish those two factors were related, sales don't even affect carry if the projectors never have to deal with an actual yield.  Basis is telling us the US demand is way off.

Good thing we have some exports if that is true.

nwobcw, you are right it is one of the most steady actions in beans -- Jan - Mar... the SA crop rules and in 2016 we ran up as the SA crop struggled....  

Jim is a little early but looking back I forward price beans pretty often in the May -July time frame...  Depending on the SA struggles or successes...

[Hobbyfarmer]

 
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