I respectfully disagree with Macdon (but that is what makes a market I guess).
During years when stocks are tight or tightening, harvest lows are often put in early. Small crops get smaller. On the other hand, big crops tend to get bigger so harvest lows are often put in late in those years.
Given this years’ adversities, I expect the former will be the case and the lows seen in late August and early September for most markets should mark the harvest lows.
In the case of soybeans, the ending stocks for 2019/20 are currently forecast by the USDA to be 460 mil bu. That is a huge reduction from the 2018/19 stocks that had been predicted to be over 1 bil bu by the USDA as recently as September. (The final 18/19 carryover ended up at 913 mil bu) The new crop estimate will almost certainly fall further due to the intense October snow storm and frost event.
The daily charts suggest the pullback in October may merely have been profit taking once combines began to roll and another push higher is close by. In the case of Jan soybeans, it looks as if resistance at $9.60/bu should fail with an eventual target of $10.16/bu attainable. Keep in mind, as recently as March of 2018, soybeans hit $10.82 when final carryover for 17/18 was 438 mil bu. Given we may see an ending stock estimate lower than that for 19/20 as early as the Nov 8th update, the target is certainly within reason. Such a move would likely spill over into canola with a rally up to the $492 area possible, especially given the recent strength in palm and soybean oil.
With the tightening stocks of corn and the various chart formations for that market, I expect feed grains and wheat will follow the same pattern (of prices firming throughout the fall).
During years when stocks are tight or tightening, harvest lows are often put in early. Small crops get smaller. On the other hand, big crops tend to get bigger so harvest lows are often put in late in those years.
Given this years’ adversities, I expect the former will be the case and the lows seen in late August and early September for most markets should mark the harvest lows.
In the case of soybeans, the ending stocks for 2019/20 are currently forecast by the USDA to be 460 mil bu. That is a huge reduction from the 2018/19 stocks that had been predicted to be over 1 bil bu by the USDA as recently as September. (The final 18/19 carryover ended up at 913 mil bu) The new crop estimate will almost certainly fall further due to the intense October snow storm and frost event.
The daily charts suggest the pullback in October may merely have been profit taking once combines began to roll and another push higher is close by. In the case of Jan soybeans, it looks as if resistance at $9.60/bu should fail with an eventual target of $10.16/bu attainable. Keep in mind, as recently as March of 2018, soybeans hit $10.82 when final carryover for 17/18 was 438 mil bu. Given we may see an ending stock estimate lower than that for 19/20 as early as the Nov 8th update, the target is certainly within reason. Such a move would likely spill over into canola with a rally up to the $492 area possible, especially given the recent strength in palm and soybean oil.
With the tightening stocks of corn and the various chart formations for that market, I expect feed grains and wheat will follow the same pattern (of prices firming throughout the fall).
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