Office: (701) Cell: (701)

Transcription

1 ALLISON THOMPSON Commodity Broker/Market Analyst Office: (701) Cell: (701)

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3 AGENDA What s in the market? Shut down, China, USDA, Exports, Implications, Weather Grains Corn, Soybeans, Wheat 2019 Market Prospects Recommendations 3

4 WHAT S IN THE MARKET Black Swans?! Government Shutdown 1995: 21 Days Trade War?! Chinese Buying/Economy/ Jan Corn, Soybeans, Wheat USDA Reports 2013: 16 days Crop Exports/Demands US Spring/Summer Weather South America 4

5 USDA REPORTS CORN/SOYBEANS Lower US Production Slow Harvest SA Soy Production USDA 122 MMT vs 115 MMT SA Corn Production 2nd Crop Release Date? Estimates? WHEAT Winter Wheat Acres? US Production Winter Kill? Late Harvest Argentina Production Rains US Endings Stocks Higher Wheat? Lower Corn/Soybeans? Lower World Stocks 5

6 MARKET IMPLICATIONS FOR THE FUTURE BEAN/CORN RATIO 9.46 to 4.02 = 2.3 (2.5) WHEAT/CORN RATIO 5.46 to 4.02 = 1.3 (1.7) BEAN/WHEAT RATIO 9.46 to 5.46 = 1.73 (1.6) VALUE OF DOLLAR Brexit = Lower $ 6

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8 US DROUGHT MONITOR 8

9 NOAA: JANUARY-MARCH 2019 Early Spring? El Nino? Midwest Planting? TEMPERATURE PRECIPITATION 9

10 SOUTH AMERICAN WEATHER Dry in Argentina/Brazil Brazil lowering estimates of soybeans 7 year Record Broken!!! 15-50% dry Harvest Brazil corn crop planting early

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13 CORN Current Market BULLS: Demand Chinese buying Ethanol (China?) SA 2nd Crop Corn/Weather Conab-Large Crop Final 2018 US Yields? BEARS: Global supply/demand SA production Conab - Large Crop US Acreage/production Low US Exports Seasonal bottom February crop insurance 13

14 Corn Acres? +3-4 Million Acres Another Record Yield? 6 Year Trend? Strong Feed Demand Livestock Lowering Ending Stocks? 3 Years 14

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17 March 19 $3.98 Target: $3.60 Cash $ $

18 Dec. 19 $4.23 $4.13 Target: $4.00-$4.15 $

19 SOYBEANS Current Market BULLS Watch SA weather USDA 120 MT vs. 115 MT Harvest January China meeting 5 MMT March shipments Lower Demand??? Out of seasonal low pattern BEARS Demand: Low Exports Export competition SA production China (Gulf vs. Brazil) Large 2018 US Crop 19

20 LARGE ENDING STOCKS Production Issue 20

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25 March 19 $10.54 Targets: +$8.00 Cash $

26 Nov. 19 $10.15 Targets: +$9.80 $

27 50% World Production 3 Year Issue Other Protein Sources 27

28 WHEAT Current Market BULLS World supply US cheapest in the world Vs. Shipping US$ Tight world stocks Canada, Australia, EU, Argentina Curbed exports - Russia BEARS Russian exports July-December Winter Wheat seedings Winter kill-march Increased world acres Lower cost providers Russia, Black Sea, Europe, Australia Egypt - Expensive 28

29 Acres WW Down 2 Million SW Up 800,000 Russia s 2019 Crop? Exports China Demand Livestock Ending Stocks w/o China? 29

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31 Sept. 19 Target: + $

32 2019 MARKET PROSPECTS What are we watching? MARKETS HEADLINES! Government shutdown US/China news South American weather 2019 Outlook Make Sales!!!! WHAT TO DO Know breakevens Good place to start Put in orders! GTC - Overnight news Old crop Sell now? RALLIES! Donald Dollars: Soybeans: $1.65 Corn: $0.01 Wheat: $

33 THE MONEY FARM RECOMMENDATIONS 2018 Corn 60% Sold ($3.95) 40% Open Soybeans 60% Sold ($9.75) 40% Open Wheat 40% Sold ($6.28) 60% Open 2019 Corn 10% Sold ($4.00) 90% Open Soybeans 100% Open Wheat 100% Open 33

34 MARKET STRATEGIES Get pricing done on any rallies Old crop cash goals Wheat + $5.70 Corn + $3.60 Soybeans + $8.00 Cover with options? 34

35 MARKET STRATEGIES New crop: PRICE EARLY! HTA, Rolling, Basis, CCC FUTURES Corn: $4.15 (Dec. 19 $4.03) Soybeans: +$9.80 (Nov. 19 $9.60) Wheat: +$6.25 (Dec. 19 $5.87) 35

36 MARKET STRATEGIES Old Crop: Re-own? OPTION PLAYS Investigate Calls Corn - at the money (March 7 cents) Beans - out of the money - rally? 36

37 MARKET STRATEGIES If I buy a $3.50 March Call, what happens on Feb. 22 (expiration) $3.00 futures = call expires worthless (-10c) $3.30 futures = call expires worthless (-10c) $3.57 futures = call worth 7c (-3c) $4.00 futures = call worth 50c (+40c) 37

38 THE MONEY FARM SERVICES Services MANAGED BUSHELS Individually Based NEWSLETTER SUBSCRIPTION 30 Day Free Trial on Website Custom Market Planning themoneyfarm.com Cash, Futures, Options, Basis Management, Combination Newsletter Subscription Additional Information: Fertilizer, Fuel, Chemical, Specialty Options Regular Contact & Updates (Phone/ ) Daily Newsletter to Mike Krueger & Luke Swenson Global Economy, Ag Markets, Marketing Opportunities Recommendations $400.00/Year $1.50/Acre (Max 8,000 acres) 38

39 THE MONEY FARM SERVICES Services HEDGING/TRADING Clearing through ADMIS Chicago Futures Options $65/Contract ½ Cent in ½ Cent Out GRAINBRIDGE Risk Management Manage Cash, Futures, Options & Payments Account for Crop Insurance Total Production Costs Track Profitability Cash Flow What If Simulations All Online $1000/Year 39

40 QUESTIONS? 40

41 ALLISON THOMPSON Office: (701) Cell: (701)