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

Episodes:

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.

Don’t miss RealAg LIVE! now Monday through Friday at 1 pm Mountain/3 pm Eastern on Facebook, Twitch, Twitter, and Youtube!

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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