Grain Market Outlook and Marketing Strategies Presented By: Brian Roach

Transcription

1 Grain Market Outlook and Marketing Strategies Presented By: Brian Roach

2 Disclaimer: Futures/options trading involves substantial risk of loss and trading may not be suitable for all investors. You should fully understand those risks prior to trading. Past financial results are not necessarily indicative of future performance. This material should be construed as the solicitation of an offer to sell or the solicitation of an offer to buy the derivative(s) noted in any jurisdiction where such an offer or solicitation would be legal. These materials have been created for a select group of individuals, and are intended to be presented with the proper context and guidance. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by Roach Ag Marketing, Ltd. Roach Ag. Marketing is not responsible for any redistribution of this material by third parties, or any trading decisions taken by persons not intended to view this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Contact Roach Ag. Marketing designated personnel for specific trading advice to meet your trading preferences. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by Roach Ag. Marketing.

3 1 st Time in a Decade

4 Population Growing 1.18% per year 83 million new mouths annually 8.5 billion people by billion people by 2050

5 Income GDP $ 1, % $ % $ 15, % $ % $ 2, % $ % $ % $ % $ 4, % $ 2, % CIA & Gallup

6 Income GDP $ 10, % $ % $ % $ 1, % $ % $ 14, % $ 3,115 n/a $ 2, % $ % $ 1, % CIA & Gallup

7 9.6% in 2015 Source: Our World In Data

8 Soybean Fundamentals

9 1992/ / / / / / / / / / / / / / / / / / / / / / / / / /18 Million Tons World Soybeans Production Source: USDA WASDE

10 1992/ / / / / / / / / / / / / / / / / / / / / / / / / /18 Million Tons 4.1% Average Annual Growth Rate for World Soybean Usage Since Requires big crops World Soybeans Total Use 6 Billion People 7 Billion People Source: USDA WASDE

11 Source: USDA WASDE

12 8.7% less than last year Soybean & Corn Advisor Inc. Dr. Cordonnier

13 Source: Dr. Cordonnier

14 Source: USDA

15 Source: USDA

16 Source: USDA & MDIC

17 100 Chinese Soybean Imports (million tons) Source: USDA

18 Source: USDA

19 1992/ / / / / / / / / / / / / / / / / / / / / / / / / /18 Ending Stocks (Days of Supply) World Soybeans Ending Stocks Days of Supply Days of Supply Avg Farm Price Avg. Farm Price ($/bu) Source: USDA WASDE

20 Ending Stocks (Days of Supply) 80 US Soybean Ending Stocks Days of Supply Days of Supply Average Farm Price $16.00 $ $ $10.00 $8.00 $6.00 $4.00 $2.00 Avg. Farm Price ($/bu) 0 $0.00 Source: USDA WASDE

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22 Informa Est.

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25 Feed Grain Fundamentals

26 1992/ / / / / / / / / / / / / / / / / / / / / / / / / /18 Million Tons World Coarse Grain Production Source: USDA WASDE

27 1992/ / / / / / / / / / / / / / / / / / / / / / / / / /18 Million Tons 2.80% Average Annual Growth Rate since World Coarse Grain Total Use 6 Billion People Rate of climb has steepened since 03/04 7 Billion People Source: USDA

28 Source: USDA WASDE

29 14.6% less than last year. Soybean & Corn Advisor Inc. Dr. Cordonnier

30 US share of world corn exports down 2 years in a row U.S. supply has to compete with foreign production until a weather issue emerges. Source: USDA

31 15MT run rate Source: USDA

32 Chinese ethanol at 7.5 MT going to 11.5 MT in 18 Ending stocks down 31.2 over past 3 yrs (-28%) Source: USDA

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34 Source: USDA & MDIC

35 Source: USDA

36 1992/ / / / / / / / / / / / / / / / / / / / / / / / / /18 Days of Supply World Coarse Grains Ending Stocks Days of Supply Days of Supply USDA Average Price $9.00 $ $7.00 $6.00 $5.00 $4.00 $3.00 Avg. Farm Price ($/bu) 20.0 $ $1.00 Source: USDA WASDE

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38 Informa Est.

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40 Wheat Fundamentals

41 1991/ / / / / / / / / / / / / / / / / / / / / / / / / / / World Wheat Yield (tons/hectare) Source: USDA

42 Million Hectares World Wheat (Area Harvested) Source: USDA

43 1991/ / / / / / / / / / / / / / / / / / / / / / / / / / /18 Million Tons World Wheat Production Source: USDA

44 1991/ / / / / / / / / / / / / / / / / / / / / / / / / / /18 Million Tons World Wheat Total Usage Source: USDA

45 Source: USDA

46 1991/ / / / / / / / / / / / / / / / / / / / / / / / / / /18 Days of supply World Wheat Ending Stocks in Days of Supply Days of Supply Avg Farm Price $ $8.00 $6.00 $4.00 Avg. Farm Price ($/bu) 60.0 $2.00 Source: USDA

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48 94/95 95/96 96/97 97/ /00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 Million Bushels 3000 US Wheat Production Source: USDA

49 94/95 95/96 96/97 97/ /00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 Days of Supply US Wheat Ending Stocks Days of Supply Days of Supply Farm Price $10.00 $9.00 $ $7.00 $6.00 $5.00 $4.00 $3.00 Avg. Farm Price ($/bu) 40 $ $1.00 Source: USDA

50 Bottom Line Plentiful Supplies of All Crops Past performance is not necessarily indicative of future results

51 How to improve your grain marketing accuracy Past performance is not necessarily indicative of future results

52 Selling Accuracy 14 of the last 16 years the Dec corn high came during a Roach Ag Sell Signal. 15 of the last 16 years for Nov soybeans Crop sales are best when our key market inputs are triggered. Roach Ag Sell Signals Money Flow Seasonality Cash Price vs. Forecasted Past performance is not necessarily indicative of future results

53 Past performance is not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.

54 Past performance is not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.

55 Results

56 3/1 2 KMIs 3/9 3 KMIs 3/12 4 KMIs Sell Signals with 3 or 4 KMI boxes checked are typically one of the best selling opportunities of the crop year! 1/25 Sell Signal Triggers 1 KMI

57 3/05 4 KMIs 2/14 Sell Signal Triggers 2 KMIs 2/23 3 KMIs

58 1 Key Market Indicator 1 Key Market Indicator 2 Key Market Indicators 3 Key Market Indicators 3 Key Market Indicators Source: QST Past performance is not necessarily indicative of future results

59 Past performance is not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.

60 Past performance is not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.

61 When Spec Funds are holding major net long positions, sales are better

62 Source: CFTC COT

63 Source: CFTC COT

64 Source: CFTC COT

65 Contracts 140,000 Managed Money Soybean Meal - Net Position 120, ,000 80,000 60,000 40,000 20, ,000-40,000-60,000-80,000 Source: CFTC COT

66 Sell During the Selling Season

67 Highest soybean prices tend to come Dec-Jan during South American crop development and Mar-Aug during U.S crop development SA Crops US Crop Development 2006 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug = Money Flow Indicator in Top 75 th Percentile Red numbers indicate highest priced month of crop year Source: Futuresource Past performance is not necessarily indicative of future results

68 Highest corn prices tend to come Mar-Aug during key U.S crop development 7 of 11 years for corn when spec money flow most positive. Seasonality 2006 Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug = Money Flow Indicator in Top 75 th Percentile Red numbers indicate highest priced month of crop year Source: Futuresource Past performance is not necessarily indicative of future results

69 Highest Chicago wheat prices tend to come Feb-July during key U.S. winter wheat development 8 of 11 years for Chicago wheat Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun = Money Flow Indicator in Top 75 th Percentile Red numbers indicate high price of crop year Seasonality v

70 USDA Price Estimates Corn $3.15-$3.55 Soybeans $ Wheat $4.60 -$4.70 Past performance is not necessarily indicative of future results

71 $4 corn and $10+ returned every year past 5 Burdensome stocks may reduce this upside Corn and soybean rallies from pre-harvest lows 5 year average corn cents cents cents cents cents Average : 75 ¼ cents/bu 5 year average soybeans 13 $ $ $ $ $1.43 1/2 Average : $1.99 / bu Source: Futuresource Past performance is not necessarily indicative of future results

72 Market Plans Plan Cash flows Use 3-4 KMI Triggers Build a marketing tool box the farm is comfortable. Execute Past performance is not necessarily indicative of future results

73 Source: USDA Past performance is not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.

74 Farm Direct Pricing Contracts Growers facing the challenge of pulling the trigger on sales can allocate initial percentages of your production geared to diversify selling risk. Roach Ag teamed up with FCStone to offer a Roach Ag + managed bushel program and other unique methods to sell your grain. Ask your merchandiser or call our trade desk to learn more. More unique contracts in pipeline designed to create value and flexibility to face any buyer. Sell Signal push sales where we take bushels to market on our sell signals for your farm. Carry sales sell bushels for delivery late in the crop year helping to pay for storage while capturing carry premiums. Averaging contract we offer a window to market bushels from April 1 st to July 15 th. FCStone delivers to any buyer. Source: INTL FCStone QST/USDA/CFTC/GeoGrain/MRCI Past performance is not necessarily indicative of future results

75 Cattle Fundamentals

76 Source: USDA

77 Source: USDA

78 Source: USDA

79 Source: USDA

80 Source: USDA

81 Source: USDA

82 Source: USDA

83 Source: USDA

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85 Hog Fundamentals

86 December 2017 Hogs and Pigs Source: USDA

87 Source: USDA

88 Source: USDA

89 Source: USDA

90 Source: USDA

91 Source: USDA

92 Source: USDA & INTL FCStone Inc

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94 Roach Ag Marketing 568 East Yamato Road Boca Raton, FL