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312-242-7905
Friday, October 21, 2022
GRAINS:
Brazil owns the soybean market. Scary stuff. Take into account this:
- Brazil has elevated soy acreage 40% over the past 9 years.
- They’re increasing once more this yr regardless of excessive fert costs.
- Brazil is the low-cost soy producer on the earth.
- Brazil has a delivery benefit over the U.S.
- Brazil has a geo-political benefit over the U.S.
- Brazil has a forex benefit over the U.S.
- Document massive soy manufacturing has already been forecast.
I contend that U.S. soybean costs won’t stay elevated below the load of the large benefit owned by Brazil. We tried promoting Dec bean oil yesterday and simply missed getting stuffed. Decrease the entry worth to 7040. The seasonal excessive is in place. Severe merchants simply have to be quick by the shut. Some selections have to be made by the shopper. Maintain the bearish corn place, ready for a take a look at of 660. The soybean technique is penciled out beneath. I’m bearish.
- If the Nov soy settles above 1370 tomorrow, assume the quick place from 1420 and place a purchase cease within the deck at 1407 cease.
- Advocate promoting Dec soybean oil at 7040, if stuffed, place a purchase cease at 7215 cease. The present spec margin on bean oil is $3,300.
- Sensible cash is seeking to promote Nov 23 soybeans.
LEAN HOGS:
Is the USDA damaged? There’s nonetheless no closing pork report from yesterday and no closing money hog market. So immediately we’re buying and selling at the hours of darkness. Hog futures traded very gentle quantity yesterday of 29k however open curiosity surged greater, rising by 2,433. Open curiosity was greater in almost each contract. Actually? Who’s the client right here and why? My guess is that funds are the main gamers they usually don’t know why they’re shopping for. IMO, they’re about to get a whipping. I strongly suggest getting the Jun 90 places lined immediately. We’re working GTC orders at 180 factors. Get them stuffed. Hedgers want to think about safety. I’m bearish.
LIVE CATTLE:
OK, I’ve updates on the money steer exercise from yesterday. The next has been reported. TX 6700 head at 148, KS 9100 head at 148, up $3 from final week. NE 15100 head at 152 and at $236 dressed, up $3 to $5. IA 5800 head at 151 and at $236. The negotiated quantity stands at 81.6k with an upward revision due this morning and, in fact, one other day to commerce. IMPRESSIVE STUFF. This information ought to proceed to assist the board immediately forward of the on-feed report. Open curiosity was up 131 so no massive conclusions from this. Zero deliveries in opposition to the Oct LC with the oldest lengthy now at 8/16. When you’re wanting so as to add to the place, think about the three-way threat reversal penciled out beneath. I don’t search for this market to cease for some time.
- Take into account the Apr LC 156/168c/152p paying 165 factors. The 156 name is 160 factors within the cash. Threat this new place to a detailed beneath 15400.
For a free 30-day trial to the night livestock wire that additionally contains the morning livestock report and noon pork and beef replace, ship an e-mail to dennis.smith@archerfinancials.com
The chance of loss in buying and selling futures and choices on futures could be substantial. The writer doesn’t assure the accuracy of the above info, though it’s believed that the sources are dependable and the knowledge correct. The writer assumes no legal responsibility or accountability for direct or oblique, particular, consequential or incidental damages or for some other damages relating or arising out of any motion taken on account of any info or recommendation contained on this commentary. The writer disclaims any specific or implied legal responsibility or accountability for any motion taken, which is solely at the legal responsibility and accountability of the person. This report is a solicitation.
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