Estate Planning & Grain Marketing
Grain Marketing Swenson Investments & Commodities
608 N West Ave – Sioux Falls, SD 57104 www.swensoncommodities.com
By Andrew Wieting Partner / Commodity Broker
912 14th St SW – Watertown, SD 57201
& Mike Sonne Grain & Cattle Marketer
Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Major Marketing Components • Seasonality • Fund Positioning • Fundamentals • Technicals Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Seasonality
Chart provided by MRCI
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Seasonality (Cont.) •
What differentiates the beans from the corn is that the two major producers are in different hemispheres and therefore produce in different periods of the year. They are harvested mostly in November and December in the US, while Brazil’s harvest takes place mostly from May until June. As one can see the highest prices are achieved in the May to July timeframe just prior to Brazil’s production hitting the world supply. (Seeking Alpha)
•
Soybean sales are best made from April to the middle of July (from a historical perspective). Beans typically give you an extra month to get sales in place as it takes the market a month longer to be confident in the production estimate.
FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Fund Positioning
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Fund Positioning (Cont.) • Historically speaking funds are getting close to their maximin length when they are net long 105k-200k contracts – rallies potentially nearing top at these periods. • On the flip side of the coin funds are often as light or short the corn market when they are net short 50k-120k contracts – downtrends potentially nearing lows during these periods. FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Fundamentals • •
Carryover (US & World) – Currently the world has a good amount of beans but the worlds appetite (China being the leader) is very high and any interruption in world production leads to good rallies typically Feb.
US Carryout
Soybeans
March Est.
Trade Avg.
Trade Range
Feb. USDA
Feb. USDA 2017
0.555
0.529
.490 - .590
.530
Feb. USDA .302
World Carryout Soybeans
March Est.
Trade Avg.
Trade Range
Feb. USDA
2017 Feb. USDA
94.4
95.5
93.2 - 98.0
98.1
Feb. USDA 96.65
FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Fundamentals (Cont.) • Production (Expected & Actual) – Currently South Americas bean production numbers are the ones being watched. Brazil looks good (150 MMT) and Argentina is having a bad drought (50 MMT)
South American Production Arge ntina Soybeans Brazil Soybeans
Marc h Est.
Trade Avg.
Trade Range
Feb. USDA
Feb. USDA 2017
47.0
48.5
45.0 - 53.5
54.0
Feb. USDA 57.8
113.0
113.9
112.0 - 116.0
112.0
Feb. USDA 114.1
FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Technicals
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Technicals (Cont.) • Up trending or down trending market - currently up trending (Just took out contract lifetime highs) • Top third or bottom third of the last 12 months – We are currently at the annual highs so sales (hedging strategies) with upside potential doesn’t seem necessary. • Technical Indicators – Currently most are very positive which is a good sign FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Seasonality
Chart provided by MRCI
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Seasonality (Cont.) •
The worlds two largest corn producing nations – the US and China – harvest the majority of the world’s corn supply over approximately 12 weeks from the middle of September to the middle of December. One shouldn’t be surprised then when the seasonal low is most often put in during that period of time. (Seeking Alpha)
•
Corn sales are best made from the middle of March to the middle of June (on a historical basis). Making incremental sales over this period of time proves to be the best strategy over time (in our experience).
FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Fund Positioning
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Fund Positioning (Cont.) • Historically speaking funds are getting close to their maximin length when they are net long 230k-260k contracts – rallies potentially nearing top at these periods. • On the flip side of the coin funds are often as light or short the corn market when they are net short 215k-260k contracts – downtrends potentially nearing lows during these periods. FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Fundamentals
• Carryover (US & World) – The amount of corn production left over after exports/imports, feed usage, and ethanol.
US Carryout Corn
March Est.
Trade Avg.
Trade Range
Feb. USDA
Feb. USDA 2017
2.127
2.313
2.222 - 2.352
2.352
Feb. USDA 2.293
World Carryout Corn
March Est.
Trade Avg.
Trade Range
Feb. USDA
Feb. USDA 2017
199.2
198.9
191.0 - 204.0
203.1
Feb. USDA 231.86
FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Fundamentals (Cont.) • Production (Expected & Actual) – Before the year the USDA and South Americas versions of the USDA put out production estimates. Weather over the course of the year causes adjustments in production estimates which creates selling opportunities
South American Production Feb. USDA Feb. USDA 2017
Marc h Est.
Trade Avg.
Trade Range
Arge ntina Corn
36.0
36.5
33.0 - 38.5
39.0
Feb. USDA 41.0
Brazil Corn
94.5
91.6
86.2 - 95.5
95.0
Feb. USDA 98.5
FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Technicals
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Technicals (Cont.) • Up trending or down trending market – sales or hedges made during up trending markets are optimal. • Currently up trending (Just took out September highs) • Top third or bottom third of the last 12 months – when putting on protection where price is relative to recent history often helps determine whether to put a plan in place with upside potential or not. • We are currently somewhere in the middle of the 12 month range. If we run up another 20 cents in the next month and we begin making sales upside potential doesn’t seem necessary given the current world carryover at this time. • Technical Indicators – Moving averages, momentum indicators, etc. Most indicators are very positive which is a good sign. FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Thank you for your time • Any Questions???
• If you have further questions please visit us at www.swensoncommodities.com or give us a call: – Andrew: (605)-335-5570 – Mike: (605)-999-4255
Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
608 N West Ave – Sioux Falls, SD 57104 www.swensoncommodities.com
By Andrew Wieting Partner / Commodity Broker
912 14th St SW – Watertown, SD 57201
& Mike Sonne Grain & Cattle Marketer
Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Major Marketing Components • Seasonality • Fund Positioning • Fundamentals • Technicals Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Seasonality
Chart provided by MRCI
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Seasonality (Cont.) •
What differentiates the beans from the corn is that the two major producers are in different hemispheres and therefore produce in different periods of the year. They are harvested mostly in November and December in the US, while Brazil’s harvest takes place mostly from May until June. As one can see the highest prices are achieved in the May to July timeframe just prior to Brazil’s production hitting the world supply. (Seeking Alpha)
•
Soybean sales are best made from April to the middle of July (from a historical perspective). Beans typically give you an extra month to get sales in place as it takes the market a month longer to be confident in the production estimate.
FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Fund Positioning
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Fund Positioning (Cont.) • Historically speaking funds are getting close to their maximin length when they are net long 105k-200k contracts – rallies potentially nearing top at these periods. • On the flip side of the coin funds are often as light or short the corn market when they are net short 50k-120k contracts – downtrends potentially nearing lows during these periods. FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Fundamentals • •
Carryover (US & World) – Currently the world has a good amount of beans but the worlds appetite (China being the leader) is very high and any interruption in world production leads to good rallies typically Feb.
US Carryout
Soybeans
March Est.
Trade Avg.
Trade Range
Feb. USDA
Feb. USDA 2017
0.555
0.529
.490 - .590
.530
Feb. USDA .302
World Carryout Soybeans
March Est.
Trade Avg.
Trade Range
Feb. USDA
2017 Feb. USDA
94.4
95.5
93.2 - 98.0
98.1
Feb. USDA 96.65
FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Fundamentals (Cont.) • Production (Expected & Actual) – Currently South Americas bean production numbers are the ones being watched. Brazil looks good (150 MMT) and Argentina is having a bad drought (50 MMT)
South American Production Arge ntina Soybeans Brazil Soybeans
Marc h Est.
Trade Avg.
Trade Range
Feb. USDA
Feb. USDA 2017
47.0
48.5
45.0 - 53.5
54.0
Feb. USDA 57.8
113.0
113.9
112.0 - 116.0
112.0
Feb. USDA 114.1
FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Technicals
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Soybean Technicals (Cont.) • Up trending or down trending market - currently up trending (Just took out contract lifetime highs) • Top third or bottom third of the last 12 months – We are currently at the annual highs so sales (hedging strategies) with upside potential doesn’t seem necessary. • Technical Indicators – Currently most are very positive which is a good sign FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Seasonality
Chart provided by MRCI
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Seasonality (Cont.) •
The worlds two largest corn producing nations – the US and China – harvest the majority of the world’s corn supply over approximately 12 weeks from the middle of September to the middle of December. One shouldn’t be surprised then when the seasonal low is most often put in during that period of time. (Seeking Alpha)
•
Corn sales are best made from the middle of March to the middle of June (on a historical basis). Making incremental sales over this period of time proves to be the best strategy over time (in our experience).
FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Fund Positioning
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Fund Positioning (Cont.) • Historically speaking funds are getting close to their maximin length when they are net long 230k-260k contracts – rallies potentially nearing top at these periods. • On the flip side of the coin funds are often as light or short the corn market when they are net short 215k-260k contracts – downtrends potentially nearing lows during these periods. FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Fundamentals
• Carryover (US & World) – The amount of corn production left over after exports/imports, feed usage, and ethanol.
US Carryout Corn
March Est.
Trade Avg.
Trade Range
Feb. USDA
Feb. USDA 2017
2.127
2.313
2.222 - 2.352
2.352
Feb. USDA 2.293
World Carryout Corn
March Est.
Trade Avg.
Trade Range
Feb. USDA
Feb. USDA 2017
199.2
198.9
191.0 - 204.0
203.1
Feb. USDA 231.86
FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Fundamentals (Cont.) • Production (Expected & Actual) – Before the year the USDA and South Americas versions of the USDA put out production estimates. Weather over the course of the year causes adjustments in production estimates which creates selling opportunities
South American Production Feb. USDA Feb. USDA 2017
Marc h Est.
Trade Avg.
Trade Range
Arge ntina Corn
36.0
36.5
33.0 - 38.5
39.0
Feb. USDA 41.0
Brazil Corn
94.5
91.6
86.2 - 95.5
95.0
Feb. USDA 98.5
FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Technicals
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Corn Technicals (Cont.) • Up trending or down trending market – sales or hedges made during up trending markets are optimal. • Currently up trending (Just took out September highs) • Top third or bottom third of the last 12 months – when putting on protection where price is relative to recent history often helps determine whether to put a plan in place with upside potential or not. • We are currently somewhere in the middle of the 12 month range. If we run up another 20 cents in the next month and we begin making sales upside potential doesn’t seem necessary given the current world carryover at this time. • Technical Indicators – Moving averages, momentum indicators, etc. Most indicators are very positive which is a good sign. FUNDAMENTAL FACTORS, SEASONAL AND WEATHER TRENDS, AND CURRENT EVENTS MAY HAVE ALREADY BEEN FACTORED INTO THE MARKETS. Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
Thank you for your time • Any Questions???
• If you have further questions please visit us at www.swensoncommodities.com or give us a call: – Andrew: (605)-335-5570 – Mike: (605)-999-4255
Trading futures and options involves substantial risk of loss and is not suitable for all investors or producers.
