China is all business, boring spring wheat, and being 100 per cent sold — LIVE! with Brian Voth

We’re in the thick of the fall season, and grain markets are acting a little counter-seasonal. On today’s RealAg LIVE!, Brian Voth, president and founder of IntelliFARM Inc., walks us through what’s going on with soybean, canola, wheat, and corn markets.

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SUMMARY

• Shaun is already missing the busy winter travel season
• This is Brian’s third time on the LIVE!
• Soybeans showing some weakness, wheat is up slightly (spring wheat was down a little)
• “Counter season” rally for soybeans, what’s up? Well, there wasn’t a spring rally, which would have been typical
• The U.S. is banking on record Chinese purchases this fall to knock down the carryout numbers
• Did funds just decide to be long beans and give ‘er? Maybe.
• Voth’s concern: have we seen the high for the crop year. The idea of short crop, long-tail — but we’re not short crop, so….
• We’re working at the perception of a short crop, and so a run-up and perhaps maybe a slow drift back down
• Voth’s customers are 100 per cent sold on beans. Boom.
• If prices are good or better than budgeted, what are you waiting for?
• There will be some level of support at $9.80, but could drift down to resistance in the low 9s
• Shifting gears to ‘nola: About $510-$515. Fundamentals support these prices, but a little bizarre in September. Would have expected in May, possibly.
• Tied to soybeans,  of course
• Canola has a solid balance sheet behind it, but could these also be the highs of the crop year?
• The basis could be interesting in spring
• If China is rebuilding their hog herd, they’ll have a home for canola meal
• At average, for production — re: canola numbers for Western Canada
• China coming back into the market would likely bump prices, but likely temporarily
• SHOW ME THE NUMBERS, he says (but didn’t yell it. Editorial license)
• A chunk of Canadian canola IS going to China, just on different channels.
• If they need the product, they’ll buy it
• Spring wheat. So, how about those Jets?
• Some protein spreads in Alberta (10.5 to 14.5), and solid protein numbers
• Then Brian talks really quickly about things that sound really complicated unless you’re a market person. Bottom line: a tiny uptrend in spring wheat
• OK, let’s talk corn — we need a resumption in energy demand (and ethanol, specifically) to see any real improvement in the outlooks
• U.S dollar has dropped, but the Brazilian real still has a currency advantage
• Bottom line: China is quite good at figuring out what they need and at what price they are willing to pay, and regardless of relationships they will buy what they want/need. It’s all business.

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