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WASDE REPORT FOR 4/9/19


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Futures trading involve the substantial risk of loss and may not be suitable for all investors. Past performance does not mean future results.

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Attention Corn & Soybean Producers:

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Are you tired of listening to the same BULL ****, and services that do not have a plan if the market goes down instead? Hedge means to take risk off the table, and my service has all producers 100% hedged and they do have most of the upside unhedged (if we can rally for whatever reason). Hedge with a Pro and option expert who has been trading grains for 40+ years.

This service mission is to make producers and end users self-directed, and not need information provided by any service. All of my subscribers were seeking to hedge in a better way than all the services they had in the past were providing. When I bought my membership/seat in 1976, nobody would help or educate me to what works for them, and what does not. I learned from the losers what does not work by listening to what they said and how they traded. They taught me what NOT to do. You, like my subscribers, have already learned what not to do, now you want to learn what works well for you, no matter up, down, or sideways market.

As I have said every year "Think what you want but always have a hedge on". Bull or bear, we use the same strategies, but each self-directed person reflects what they think in the strike prices they select and use. No herd following here. It is the opposite, when everyone is buying and the price is near significant resistance, we are improving our hedge by capturing more income when cheap to do so, and on price breaks when everyone is selling and the market is near contract lows, we are improving our hedges buying back our upside when cheap to do so.

Hedge means to take risk off the table, not add to it. How is it possible for hedge service to recommend buying back your corn when above $4.00, please tell me how that is a hedge? We were hedging and improving our hedges then.

Simple easy to understand option strategies give my producers the odds greatly in their favor and gives them control of the protection they need and the upside potential they want. Mindset is also on the forefront every year, live and hedge in the half full instead of the half empty. Learn how to read the charts clearly and easy, to help locate long-term significant support and resistance, to help determine how much protection you need, and what upside objective is reasonable to achieve.

COARSE GRAINS: This months 2018/19 U.S. corn outlook is for lower feed and residual use, reductions in corn used for ethanol and exports, and larger stocks. Feed and residual use is lowered 75 million bushels to 5.300 billion based on corn stocks reported as of March 1, which indicated disappearance during the December-February quarter declined about 9 percent relative to a year ago. Corn used to produce ethanol is lowered 50 million bushels to 5.500 billion based on the most recent data from the Grain Crushings and Co-Products Production report, and the pace of weekly ethanol production during March as indicated by Energy Information Administration data. Exports are reduced 75 million bushels to 2.300 billion, reflecting current outstanding sales and expectations of increased competition from Brazil, Argentina, and Ukraine. With supply unchanged and use declining, ending stocks are raised 200 million bushels to 2.035 billion. The season-average corn price received by producers is unchanged at a midpoint of $3.55 per bushel.

The global coarse grain production forecast for 2018/19 is up 5.3 million tons to 1,377.2 million. This months foreign coarse grain outlook is for larger production, increased trade, greater use, and marginally higher stocks relative to last month. Brazil corn production is raised, reflecting improved yield prospects for second-crop corn. Argentina corn is higher based on expectations of larger area. Corn production is raised for the EU, Mexico, and Indonesia, with reductions for the Philippines and Pakistan.

Major global trade changes for 2018/19 include higher projected corn exports for Brazil, Argentina, the EU, and Ukraine with a partially offsetting reduction for the United States. Corn imports are raised for the EU and South Africa, with lower projections for Vietnam and Bangladesh. Foreign corn ending stocks for 2018/19 are raised from last month, mostly reflecting increases for Mexico, Indonesia and South Africa that more than offset declines for Vietnam, Brazil, Pakistan, Bangladesh, and Argentina.

WHEAT: The outlook for 2018/19 U.S. wheat this month is for unchanged supplies but reduced exports and domestic use. The NASS Grain Stocks report, issued March 29, implied less feed and residual use for both the second and third quarters. Total 2018/19 feed and residual use is lowered 10 million bushels to 70 million. Wheat exports are lowered 20 million bushels to 945 million on a continued sluggish export pace. By class, Hard Red Winter exports are raised 10 million bushels, which is offset by reductions of 15 million for Hard Red Spring, 10 million for White, and 5 million for Durum. These demand changes, as well as a small reduction in seed use, led to a 31.5-million-bushel-increase in ending stocks, which are now projected at 1,087 million bushels. The season-average farm price is raised $0.05 per bushel at the midpoint to $5.20 based on updated NASS price and marketing data.

World 2018/19 wheat supplies are raised 2.1 million tons due mainly to increased beginning stocks that largely reflect multi-year revisions for Iran. Global production and exports are each reduced fractionally, but domestic consumption is lowered 2.9 million tons. The consumption change stems primarily from lower Iran and EU feed and residual use; Iran is lowered on the series revision and the EU reduction is based on more competitive corn prices and increased coarse grain disappearance. With supplies increasing and total use declining, global ending stocks are raised 5.1 million tons to 275.6 million.

RICE: The outlook for 2018/19 U.S. rice this month is for reduced exports, unchanged domestic and residual use, and higher ending stocks. All rice exports are lowered 4.0 million cwt to 94.0 million. Long-grain exports are reduced by 1.0 million cwt to 67.0 million on lowerthan-expected milled exports. Medium- and short-grain exports are decreased by 3.0 million cwt to 27.0 million on a slow sales pace to several export markets. Total domestic and residual use is unchanged at 135.0 million cwt. Long-grain use is raised 1 million cwt but this increase is completely offset by an equivalent reduction in medium- and short-grain. These revisions are based on the latest NASS Rice Stocks report. Projected all rice ending stocks are raised 4 million cwt to 53.6 million. This is 82 percent higher than last year and would be the first time stocks have reached 50 million cwt since 1986/87. The projected 2018/19 all rice season-average farm price is reduced by $0.10 per cwt at the midpoint to $12.10 with the range narrowed to $11.80 to $12.40. All of the reduction is due to a decrease in the projected California medium- and short-grain price.

Global 2018/19 rice supplies are decreased by 0.4 million tons to 663.8 million with lower carryin stocks and production. Global production is down as reductions for Indonesia, Pakistan, and the Philippines are not completely offset by higher production for Sri Lanka. World 2018/19 consumption is raised 0.4 million tons to 492.4 million on higher expected use in Pakistan and Sri Lanka more than offsetting reduced use in Laos and Mexico. Global 2018/19 trade is lowered marginally to 47.3 million tons as reduced exports by Pakistan, the EU, and the United States are not completely offset by higher exports from Cambodia, Peru, and Uruguay. Projected world ending stocks are adjusted lower this month to 171.4 million tons but remain record large.

OILSEEDS: U.S. soybean supply and use changes for 2018/19 include lower imports, higher seed use, and lower ending stocks. Soybean imports are reduced in line with reported trade through January while lower seed use reflects plantings indicated in the March 29 Prospective Plantings report. With soybean crush and exports unchanged, ending stocks are projected at 895 million bushels, down 5 million. Soybean oil changes include increased imports and domestic disappearance for biodiesel and for food use, and lower ending stocks. The season-average soybean price is forecast at $8.35 to $8.85, unchanged at the midpoint. Soybean oil price is projected at 28.0 to 30.0 cents per pound, down 1 cent at the midpoint. Soybean meal prices are projected at $305 to $325 per short ton, unchanged at the midpoint.

The 2018/19 global oilseed supply and demand forecasts include increased production, lower exports, and increased stocks compared to last month. Global oilseed production is raised 2.0 million tons to 595.0 million mainly on higher soybean production for Brazil and rapeseed production for India. Production for Brazil is increased 0.5 million tons to 117.0 million, reflecting favorable weather in Rio Grande do Sul where the crop is in pod-filling and maturation stages. Brazils 2017/18 soybean crop is also revised higher, supported by recent industry estimates. Rapeseed production for India is raised 1.4 million tons to 8 million on information from Indias Solvent Extractors Association.

Global oilseed exports are reduced 1.0 million tons to 177.1 million mainly on lower rapeseed trade between Canada and China. With lower rapeseed crush for China, imports are increased for other products, including sunflowerseed meal, rapeseed meal, palm oil, and soybean oil. Global oilseed ending stocks are raised 1.5 million tons to 123.2 million, largely due to higher soybean stocks for Brazil and rapeseed stocks for Canada

SUGAR: U.S. sugar supply for 2018/19 is decreased 42,457 short tons, raw value (STRV) based on processor-reported reductions to beet sugar production and cane sugar production in Florida. Ending stocks for 2018/19 are projected at 1.625 million STRV, implying a stocks-touse ratio of 13.2 percent. There are no changes to the 2018/19 Mexico sugar supply and use.

LIVESTOCK, POULTRY, AND DAIRY: The 2019 forecast for total red meat and poultry production is lowered from last month on lower expected beef, pork and broiler production. The beef production forecast is reduced from the previous month primarily on lower carcass weights, but higher total cattle slaughter for 2019 is expected to partially offset declines in carcass weights. Pork production is lowered on a slower pace of slaughter throughout the year, but this decline is partially offset by slightly higher hog weights. USDAs March Quarterly Hogs and Pigs report estimated producers farrowed 2 percent more sows during DecemberFebruary and indicated their intentions to farrow about 1 percent more sows in March-May. These hogs will be ready for slaughter in the second half of 2019. Broiler production is reduced on recent hatchery data and slowing weight growth while turkey production is raised slightly. The 2019 egg production forecast is raised from the previous month as the pace of expansion has been more rapid than previously expected.

For 2019, beef trade forecasts are unchanged from last month. Pork imports remain unchanged from the previous month, but the export forecast is raised on expectations of stronger global demand for U.S. pork products in the second half of the year. These forecasts assume that current trade policies remain in place. No change is made to broiler and turkey export forecasts.

The 2019 cattle price forecast is adjusted to reflect a slightly lower first-quarter price. The hog price forecast is raised from last month but demand in coming quarters is not expected to be as strong as in March and early April. The broiler price forecast is reduced, reflecting a lower first-quarter price, while modest year-over-year gains in turkey prices support a higher price forecast. The egg price forecast is lowered on recent price declines and increased production throughout the year.

The milk production forecast for 2019 is lowered from last month as higher milk cow numbers are more than offset by lower expected growth in milk per cow for the year. The 2019 fat basis import forecast is unchanged from last month, but the export forecast is lowered on slower expected shipments of butterfat products and whey products. On a skim-solids basis, the current import forecast is raised on higher imports of milk protein products and a number of other dairy products. The skim-solids basis export forecast is lowered from last month on lower shipments of whey products, lactose, and nonfat dry milk (NDM).

The annual product price forecast for cheese is raised from last month on higher current prices and expected stronger demand. Butter, NDM, and whey prices are reduced from the previous month on current prices and expected weaker demand. The Class III price is raised on thehigher cheese price forecast while the Class IV price is reduced on lower NDM and butter price forecasts. The all milk price forecast is raised to $17.25 to $17.75 per cwt

COTTON: The 2018/19 U.S. cotton supply and demand forecasts show lower consumption and higher ending stocks relative to last month. At 3.1 million bales, U.S. cotton consumption is now forecast to reach its lowest level since the 1890s. Ending stocks are now forecast at 4.4 million bales, a 100,000-bale increase from both the previous 2018/19 estimate and from the current estimate for 2017/18. The season-average farm price is unchanged with a midpoint of 70 cents per pound.

Lower world consumption this month results in higher projected 2018/19 ending stocks, with little net change in the other components of the global balance sheet. World mill use is forecast about 400,000 bales lower this month. A 300,000-bale decline in Turkeyand smaller declines in the United States and Vietnammore than offset smaller increases elsewhere. Lower imports for India, Turkey, and Vietnam are largely offset by an upward revision for China. Lower exports for India and Burkina Faso are largely offset by Australia and Turkey. Higher production for China is largely offset by a decline for Burkina Faso.

World ending stocks in 2018/19 are forecast about 360,000 bales higher this month, with an increase in Chinas stocks more than offsetting a decline in stocks outside of China.

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The markets covered daily are 2019 & 2020 Soybeans, Corn, and Wheat.

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About the author


Currently a member of The Chicago Board of Trade (CBOT) and registered with the Commodity Futures Trading Commission (CFTC) as a floor broker . I started my career in 1973 on The Chicago Mercantile Exchange trading floor working for a major firm. Three years later I purchased my first membership and began what would become a thirteen-year commitment to trading soybeans for my own account on the trading floor. I began trading options on futures since their inception in Chicago about twenty years ago; doing so, I traded in various pits on the trade floor. 

One of the major lessons that I have learned from all my years of experience is that knowledge is an important condition for the possibility of successful trading. Knowledge gives you a better chance to succeed by eliminating obvious mistakes: with it, you will never find yourself shamefully uttering, “If I only took the time to learn”.  
         
I want to save you from such regrets by teaching you where the danger is, what it looks like, and how to go around it, while still keeping an eye on your destination of success. In short, I will teach you how to combat error with knowledge.
       
My mission is to educate you, giving you my 45 years experience, wisdom, and knowledge from which you will then be able to use and benefit from at will.

I know what will help you make money, and I know what will insure failure. Use my services and prevent, “If I only knew”.  
  

Howard Tyllas

Futures trading involves the substantial risk of loss and may not be suitable for all investors. Past performance does not mean future results.

If you have a question or comment, email me dailynumbers@futuresflight.com

Visit my website www.futuresflight.com

                                                 

                        

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