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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- 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.