Marketing Partners Advisory: Weekly Conference Call Recap

  • Marketing Partners Advisory comments about recommendations for 2017 corn and soybeans.
  • Dryness remains in portions of the U.S. and Brazil. Early harvest for corn and soybeans in the U.S. is prompting some questions.
  • The October USDA WASDE report will likely provide more clarity on U.S. spring planted crops production.
  • The funds are now short grains and oilseed futures.

The following are comments and discussion items from the weekly conference call of the recommendations group of Marketing Partners Advisory.

Discussion Items :

  1. With 40% of 2017 corn and 50% of 2017 soybeans sold, Marketing Partners Advisory’s plan is to wait until harvest progresses to make additional sales recommendations. Existing offers above the market have not been removed as the MPA feels that sales should be made if and when the market reaches these levels. It is important to note that recommendations above the market do not imply that the MPA is waiting for these higher prices to make new recommendations. It is likely that additional recommendations will be made at lower levels than the current recommendations.
  2. Over the past few months we have addressed the dryness issues in portions of the U.S. Corn Belt and Plains. In many areas those issues remain. Conventional wisdom may suggest new crop production potential has been challenged in some of these areas. That may be an easy expectation based on historical considerations. We too, have scratched our heads trying to assess yields and production data in recent years, given some of the production stress experienced over the course of a production cycle. We are approaching the current harvest keenly interested in yield and production data given the dryness issue which has persisted. There are questions focused on meal and oil yield for new crop soybeans as well as the obvious questions about overall yield per acre for fall harvested crops. Early harvest reports do not appear to be providing clarity on some of these questions. Yields per acre seem to be all over the map, and the meal and oil yield on soybeans is yet to be quantified with clarity.
  3. The October USDA WASDE report is likely to bring closure to the questions of the impact of early season production stress (wet in the east and dry in the western Corn Belt and Plains) and the later season concerns of dryness. The October report will incorporate more harvest data which will provide a better understanding of overall production, the impact of current production enhancing technology, and specifics relative to meal and oil yields on fall harvested oilseed crops. The October USDA WASDE report will also incorporate updated acreage considerations based on harvested acreage data and updated FSA acreage assessments.
  4. The most recent assessment of fund activity in the grains and oilseed futures markets details that the funds are now beyond minimally short corn and wheat futures, and are modestly short soybean futures. This is a meaningful change versus the fund length which has hung over the markets from late June/early July 2017.
  5. The corn, wheat, and soybean futures markets are in a period in which the markets are neither overbought or oversold from a technical price analysis perspective. The markets have generally traded sideways for much of the past month. This has allowed some of the longer-term price moving averages to move closer to current price. Typically, this should garner some attention. However, the use of the moving average versus current price technical price analysis resource becomes less reliable as a short-term indicator in markets which are not trending higher or lower prior to current price action.