"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Monday, November 3, 2014

Bean Harvest Wrapping Up

The USDA Soybean harvest progress report was out this afternoon and it showed some hefty progress was made last week. Bean harvest as of the past weekend was at 83% compared to 70% last week and 85% for the same week last year. The five year average is 83% so it is dead on schedule.

The story essentially remains the same as last week... harvest progress out in the western regions of the Belt was very, very strong.

Iowa is at 91% complete, compared to 81% last week and 94% last year but it is also now ahead of the five year average of 90%. Minnesota is essentially done at 98% compared to 94% last week and 95% last year. Its five year average is 91%.North and South Dakota, along with Nebraska, are wrapping up as well. In short, the western part of the Belt looks great.

Just like last week, it is the eastern part of the belt that is lagging. However, very good progress was made last week in Indiana, which jumped up to 70% complete compared to only 50% the previous week. The five year average there is 87%.

Ohio also made good progress jumping from 50% the previous week to 72%. That compares with last year at 90% and its five year average of 83%.

Illinois had a nice ramp up as well with 83% now harvested compared to only 63% last week. Last year it stood at 91%. The five year average is 84% so Illinois has really made up some ground and is now essentially right where it ought to be.

Based on these numbers I find it hard to believe that we are going to continue to hear issues about "meal shortages" much longer. The beans are going into the bins and the crop is very large. As the harvest winds down, more trucks should become available to move meal that is produced as crushers have incredible margins right now in the beans with the heavy buying jacking the crush to some quite profitable levels.

It would not surprise me one bit to hear talk going from "meal shortages" to "meal gluts" sooner rather than later. The tightness in transportation will eventually clear up and the product is going to move.

Switching ever so briefly to the corn... the harvest is 65% complete compared to 46% last week ( farmers have opted to go after the beans and leave the corn for later) but is catching up to last year's pace of 71%. The five year average stands at 73%.

There does not seem to be a standout feature in the report as to a clear cut difference between the eastern and western portions of the Belt. I should note that Illinois is essentially tracking its five year average of 78% with this week's 77% complete.
Iowa and Indiana are lagging with the former at 58% compared to its five year average of 75% with the latter at 58% compared to its five year average of 70%.

This is perhaps the reason that the funds have been able to jam corn prices off their worst levels right at the closing bell both last Friday and today. The trade is waiting for a larger percentage of the harvest to come in before they begin to get aggressive on the hedging but I look for that to pick up this week. Opposition to the hedge funds and other large specs is building between $3.80-$3.70.

The forecasts show some moisture in the belt but the amounts forecasted vary. Also, some regions look to see sunshine and clear weather, but colder temps on the way. Depending on location, farmers will have some open windows available to get some more done before next Monday's reports.


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  2. grain and bean bulls are now out of bullets; keep your selling shoes on ladies because we are headed south.

    1. Not a grain trader here-I thought corn chart looked pretty good (which is why I don't trade soft commodities).

  3. ZW the chicago wheat hit the 20-week MA, looking at that weekly chart around 550 stopped things for 2 months before the break down to new low o year.
    ...ZW the same stuff i.e. funds net short and problems with all the crops around the world dominate the talk, plus the 20dma crossing above the 50dma, and spread traders long beans short wheat bail on a bad soybeans day.

    yeah corn it was said funds bought net 10-15K contracts into the close. 1st of month money? 'who are those guys'

    index fund roll picks up steam thru the week, with 3 funds rolling by the end of this week, then monday usda report which everybody thinks will show even bigger corn and beans crops, but a bit smaller wheat.

    seems good: The significance of Monday's losses in the #soy complex and #corn is tied to what comes next -- followthrough validates; reversals minimize.

    hey farmers are 'stacking' as well, many photos of piles of corn in the country that are getting 'stacked' higher and higher!
    ...apparently can leave those piles out there quite a few months before damage would hit (perhaps feb/march time frame?)


  4. Dan, perhaps you saw the article in the WSJ about the transportation bottlenecks. It got me thinking that, regardless of transportation gradually improving over the weeks, we will still be left with a gigantic carryover which the mkt will be contending with for months. Might we be in for not a price collapse, but a sideways grind until late spring, which wears out all participants?

  5. russia ruble new low against dollar!
    ..russia budget is based on 3700ruble/bbl oil and it's trading into 3200ruble/bbl level.

    CL got into the 75 handle that Dan had mentioned for support..

    if oil stays down then the demand for rail cars is lessened and thus soymeal problem lessens.

    aud/usd almost a perfect double bottom with 2013 low 86.43 thus far.

    bulls are suggesting if US midterm elections today gives congress to repubs then SPX will take a new leg higher.


  6. Hi Hubert. Was just thinking about 2 of your wonderful trades. The first was the silver at 19. You took your profit at around 22 as I recall. Where did that number come from. And second, the oil trade from 80 to 83.60. Where did the 83.60 come from. Both great trades that worked immediately. Thanks

  7. wowo bird flu fears in china surface.. china soymeal closed limit down.

    that said, jan soybean bulls are interested right here near the high of the 10/27 key reversal day,, which was also a high volume session. stop or stop n reverse below the 10.00 round number.

    USDX quite the shake looking at the 87 round number again.

    bears pointing out many unfilled gaps below in SPY.


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