Dry Bean Exports and NASS USDA Grain Stock and Planting Indications

Agricultural Market News

Agricultural market news and distractions going on around the world to keep traders of various asset classes concernedly attentive to TV, computers, and newswires. As we discuss the geopolitical temperature which of course has North Korea front and center… hmmm… where do I start with them? For the past 30 days North Korea has been releasing a daily barrage of rhetoric and saber rattling mainly against the US and South Korea. Well…I really don’t know where to start and maybe it’s a good thing I’m not Commander in Chief because I’ve never been one to sit back and take verbal insults or disrespect lightly.

In fact, knowing me if I were the President of the United States; I’d probably fly half way across the world in Air Force One and land it on the tarmac of Pyongyang Sunan International Airport, open the door of the plane and give a brief monologue about Americans and most of the world’s citizens truly sympathize with the suffering of the North Korean People. I would further apologize to them for having to endure the rule of the current family dictatorship. I then would proceed to drive up at the palace gates where Kim Jong un or “Kimmy” (as I like to call him) lives and give him the middle finger. Then I would attempt to immediately fly back to the US, assuming the North Korean military didn’t blow up Air Force One or “the beast” (as the presidential limo is known as). Unfortunately their leadership is leading them to further isolation and closer to the possibility of war unless the North Korean People decide to stand up and create their own “Korean Spring” (I think I just coined that phrase, but I’ll let you use it CNN or BBC). I wouldn’t be surprised if the censorship in North Korea is so bad that 99% of the North Korean population do not even know about the Arab spring uprisings in the Middle East the past two years.

Okay, enough rambling on about the North Koreans. Lets get to the agricultural market news developments since March 29’s USDA crop report. In a nutshell the USDA stock piles of corn, soybeans, and wheat were much higher than anticipated which lead corn to be immediately sold off and closing limit down dragging soybeans and wheat down with it.

Coming off all time high’s in corn, wheat, and soybeans in the past year, the market usually chooses the path of least resistance when it comes to trading any asset class. In this case the NASS USDA report was released on Friday March 29, which was not only the end of the trading week but also happened to coincide with the final month of the trading quarter which naturally produces volatility as market participants repositioned themselves. Any market data released during these sensitive “ending periods” can exponentially magnify price action movements in the markets. These charts, hence, reflect the magnitude of the “herd” mentality coupled with bearish USDA data and exacerbated by the “ending periods” of both weekly and quarterly trading.

The US dry bean market has continued to be quiet with a lack of movement in either direction. Prices remain steady for most varieties and the spreads between growers and dealers continues to be exceptional between $10-$15 . Recently, Great Northern beans have tighten up a bit and some are also getting bullish on Small Reds, but beyond these two varieties all else is quiet.

Looking forward, it’s all going to be about trading the weather and adjusting for bean acres planted. Projected bean acres are due to drop this upcoming season, but it’s no shock considering the amount of beans harvested this past season was over 30 million bags (100 lbs) and growers are likely reduce acres in order to firm up prices.

Although corn and soybeans have rewarded growers with tremendous returns for their crops the past several months, declining prices, a large enough US supply, and large a production from South America agricultural export powerhouses may make it difficult for values to increase unless mother nature decides not to cooperate during planting season, which is always in the  cards.

Please click to view the NASS USDA Grain report