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Play Turner’s Take Ag Marketing Podcast Episode 282
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Today on the podcast we talk about the possibility of new US lockdowns for August. It is starting to leak out the WH and CDC have been talking to governors about lockdowns starting in the second or third week of August. This is not set in stone but it is being considered. States do not have to follow WH/CDC recommendations but I’m sure those governors who are politically aligned with the administration will follow orders. If the US goes into a partial lockdown in the next few weeks we expect the markets to decline but as much as they did last year. The trade knows how to discount economic growth during covid lockdowns. Their is not as much market uncertainty as the last time around and the big funds, commercial producers, and corporate end users should all have some sort of playbook now. Make sure you check out this week’s Turner’s Take Podcast!
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Out of the Office Next Week
I am out of the office next week. If you are a client and need something please call my office at 312-706-7610 and one of the brokers on our trade desk will be able to help you out. It always helps covering brokers if you have your account number handy when you call. I tend to take my family vacation at the end of summer after the crops are generally made but before school starts. We took our family vacation during July 4th week back in 2012 and I think I spent half my time on the phone. Lesson learned!
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Rains in South Dakota last night and better chances for cooler weather and rain in the Midwest this weekend is weighing on the CBOT right now. The milder temps are a reason for natural gas to sell off today too.
Below is the US Drought Monitor as of 7/27 (released yesterday). The eastern corn belt is going great. North Dakota is in extreme drought while MN and SD are in severe drought. N. IA is experiencing widespread moderate to severe drought.
The next WASDE is August 12th and there is a good change the USDA will make their first adjustment to yield estimates for corn. It is still too early for the USDA to comment on soybean yields.
Grains & Oilseed
If any farmers still have old crop corn and soybeans now is probably the time to sell. The marketing year ends Aug 31 and harvest isn’t that far away. As a rule Turner’s Take Ag Marketing has always sold the last of old crop by the end of August to make room for new crop.
For the markets to go higher in August we need to see worse than expected yields. I think we continue to see a broad chopping range between now and Labor Day. If the markets are going to rally it will be led by a demand rally at harvest. Corn and soybeans will have tight old crop ending stocks and also have projected tight new crop ending stocks. End users will want to secure product as it becomes available during harvest. Unless a consumer desperately needs grains or oilseeds now, there is really no reason to buy in the next few weeks in such a tight old crop market.
A few things to keep in mind while I am out of the office next week
- Crop ratings will probably be lower again on Monday, sparking new speculation on lower corn and soybean yields
- Shutdown talk may amplify if the WH/CDC is serious about lockdowns in mid August.
- The WASDE in Aug 12 and yield estimates will start hitting the wires at the end of next week.
I’m starting to sound like a broken record by I think we will see more of the same next week. Volatile markets trading in a wide range as traders debate weather, yields, lockdowns, and future demand.
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About Craig Turner
Craig Turner is a Senior Broker at Daniels Trading, author of Turner’s Take newsletter, and a Contributing Editor for Grain Analyst. Craig is often quoted in the Wall Street Journal, Reuters, Dow Jones Newswire, Corn & Soybean Digest, and also makes appearances on SiriusXM – Rural Radio Channel 80 providing commentary for the Grain and Livestock markets. Craig has also been featured in FutureSource’s Fast Break series, Futures Magazine Online, and INO.com. Mr. Turner has a Bachelors from the Rensselaer Polytechnic Institute (RPI) where he graduated with honors and has worked at the NYSE and Goldman Sachs. While at Goldman, Craig earned his MBA in the NYU Stern executive program. Learn more about Craig Turner.