Beans
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Started by Jim_M - Nov. 15, 2022, 10:26 a.m.

I have to say, I'm pretty impressed with beans strength.  There is nothing bullish about beans.  Sales and exports are slow, there is a big crop developing as we speak.  

My personal opinion is they should be $2-3 cheaper.  It's funny reading analytical opinions where they keep grinding on potential Chinese demand (and have been for weeks/months) but it never materializes.  

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Re: Beans
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By metmike - Nov. 15, 2022, 11:42 a.m.
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Thanks Jim!

There's a major drought in the key growing region of N. Argentina right now:

https://www.marketforum.com/forum/topic/89848/

The hole in the big precip is right over some of the driest areas.

https://ipad.fas.usda.gov/rssiws/al/ssa_cropprod.aspx

https://ipad.fas.usda.gov/rssiws/al/crop_production_maps/ssa/AR_Delegation/Argentina_Total_2019_20_Soybean.png


Re: Re: Beans
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By metmike - Nov. 15, 2022, 8:15 p.m.
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Rains filling in just a bit in the driest area on the just out 18z GFS.

         https://mag.ncep.noaa.gov/Image.php

By joj - Nov. 15, 2022, 9:52 p.m.
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Not sure why you consider beans strong Jim?  I just looked at a chart and it has been going sideways for months.

Disclaimer:  I know nothing of the fundamentals of grains.

By metmike - Nov. 16, 2022, 3:11 a.m.
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https://tradingeconomics.com/commodity/soybeans

Beans 30 days. Up almost $1. Uptrend.  Seems like strength to me the last month, joj!


1 year below.  Sideways/pause/wedge, since the start of July.

5 year below. Strong UPTREND since late 2021 intact. Higher lows. Higher high. 

40+ years below. Potential uptrend the last 15 years?  Triple top?


By joj - Nov. 16, 2022, 8:34 a.m.
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I see that one month uptrend.  Perhaps in sympathy with gold and silver of late?

By Jim_M - Nov. 16, 2022, 10:10 a.m.
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Historically, $14+ bean prices IMO are pretty darn strong.  

By Jim_M - Nov. 16, 2022, 10:12 a.m.
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I can appreciate that Argentina is having some weather issues, but that happens every year somewhere.  My guess is that before this is all over someone from some agency will post a number of 160mmt for SA bean production.  

By metmike - Nov. 16, 2022, 10:18 a.m.
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Agree jim!

Might be the highest price in history for this time of year. We can see from the last graph, we've only traded above this for very brief periods that take up, probably something like 5% or less of the time and on 3 other occasions.


However, a severe drought does NOT happen every year to a huge area in a key producing country. 

By metmike - Nov. 16, 2022, 11:57 a.m.
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As mentioned yesterday the GFS ensemble mean has rains filling in a bit for the driest areas. Still not nearly enough to help much but just a slight uptick in the amount compared to earlier this week.

By Jim_M - Nov. 16, 2022, 12:14 p.m.
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Again, just my opinion, but, over the last couple years, we have seen crops grown with little more than spit.  Yes, Arg might be having a drought, but even weak rains will keep those beans alive and then one solid rain and bean plants will double in size almost over night.  

But it’s just bar stool talk at this point.  Lots of growing season to go.

Beans
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By metmike - Nov. 18, 2022, 1:31 p.m.
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Less spit in the forecast for drought spots of n.argentina in the last update (=:

Re: Beans
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By metmike - Nov. 18, 2022, 6:17 p.m.
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Still just barely enough rain to get by in N.Argentina's drought area. Around an inch in 2 weeks with heat. Soils there are well drained and crops require at least an inch/week to do well.




Here's more:

https://www.marketforum.com/forum/topic/89848/

Re: Beans
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By buck1400 - Nov. 21, 2022, 4:19 p.m.
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IMHO alot of the strength in soybeans is coming from strength in soy oil.  Will it continue?  Who knows.

Re: Re: Beans
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By metmike - Nov. 21, 2022, 4:27 p.m.
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buck,

You're absolutely on to something there! Wonderful point!!!

Marrying Soybeans and Renewable Diesel

                                                                                            

Renewable Diesel Plans Could Outstrip Soybean Acres, Soy Oil Supplies


https://www.dtnpf.com/agriculture/web/ag/news/business-inputs/article/2021/12/16/renewable-diesel-plans-outstrip-soy

A look at renewable diesel production, including the forecast through 2030 by Rabobank. The blue charts show renewable diesel capacity while the orange line shows the vegetable oil needs it will take to meet that demand. (Image from Rabobank: The Rush to Crush, September 2021)

+++++++++++++++++++

Add that to this, and it's making more sense!

                Diesel/Heating oil crisis            

                            15 responses |               

                Started by metmike - Nov. 18, 2022, 1:45 a.m.            

https://www.marketforum.com/forum/topic/90774/

By buck1400 - Nov. 21, 2022, 6:04 p.m.
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The politics of renewable fuels tend to get some on this forum a little agitated ;), but focusing on the markets...

There is certainly uncertainty (<intentional, lol) in the future of renewable diesel, but I think it is clear that some users (airlines for one i think; trucking no way) will be willing to pay the premium for it.  What the ramp up in demand turns out to be is anyone's quess.  So future demand is positive but fuzzy.  Supply looks to be increasing with multiple plants coming online in '23 and '24.  A big question for soybean growers is how much will be produced from soyoil verses other oil/fat feedstocks.  To me that is a big question.

So, getting around to trade ideas, which coming from me has less value than the electricity required to transmit this message over the interweb, it would lead me to the conclusion of strength in soybeans and soyoil, with weakness in soymeal which will essentially be a byproduct.

FWIW

By Jim_M - Nov. 21, 2022, 6:25 p.m.
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My take is a little different.  The government wants a significant ramp up in EV's.  Whether it's cars or trucks and what the government wants, the government gets.  

I'm not sure how ethanol and soyoil will have any increased use if GM alone expects to sell 1 million EV's in a couple years.  That is a lot of fossil fuel use gone to the wayside.  I think that has something to do with the fact that crude prices aren't going through the roof.  

China is going hard on EV's.  Europe is going hard on EV's.  We live in interesting times.  It will be interesting to see how this all fleshes out.  

By metmike - Nov. 21, 2022, 6:46 p.m.
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Jim,

Very true that electric cars don't use a combustion engine and the more they increase, the less ethanol and biodiesel will get blended but they do use fossil fuels for 90% of their electric charge that got burned elsewhere and transported thru power lines. 

Also, all the trucks and trains that use most of the diesel are not converting to electric right now like the cars are.

California tells electric car owners NOT to charge vehicles. Energy crisis in California because of unreliable, fake green/anti environmental energy!September 2022 https://www.marketforum.com/forum/topic/88534/ 

By metmike - Nov. 21, 2022, 6:54 p.m.
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buck,

I've never met a producer that wasn't a front row, loud cheerleader for bio fuels.

I would be the exact same way.

The war on fossil fuels would kill those markets by design if they were ever able to implement(impose) their impossible fake green, fake environmental energy  plan.

However, since a magic green energy fairy does not exist and you can't defy the laws of physics or energy or nature........it won't happen.

The economic and inflationary (high energy cost) pain will be correlated to how far they push it.  

There are lots of people grabbing power and gaining wealth that control the movement and are gatekeepers of messages, so the damage will likely go farther than common sense dictates.

In 30+ years and in retrospect, this will be seen as a sort of Dark Age and corrupt period in human history when it comes to this realm and climate science. 

Richard Lindzen Quotes

https://www.azquotes.com/author/30824-Richard_Lindzen


https://en.wikipedia.org/wiki/Richard_Lindzen


By Jim_M - Nov. 21, 2022, 8:33 p.m.
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I agree Mike, but the fossil fuel that would power those electric power plants would be NG or gasp…coal.  Not soy oil or ethanol, which is what we were talking about.

By metmike - Nov. 21, 2022, 10:09 p.m.
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Absolutely Jim. That's a different part of this topic because electric cars are a tiny fraction of the cars out there in 2022/2023 and the diesel fuel crisis is NOW. 

This is boosting demand for bio diesel that comes from soybeans.

By metmike - Nov. 25, 2022, 11:59 a.m.
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@kannbwx

That didn't last long. #Brazil's President-elect Lula's transition team said Tuesday that the incoming gov't would stand by the biodiesel industry by keeping the blending mandate higher than the current 10%. The previous plan was 14% in Jan/Feb 2023 then 15% from March on.

Image

Beans
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By metmike - Nov. 25, 2022, 12:01 p.m.
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https://www.marketforum.com/forum/topic/90891/#90926


Brazil's production is much greater than Argentina and the weather in Brazil is much more important but we shouldn't overlook that this is because Brazil is massive and the production is really spread out to an area, something like 4-5 times the area growing beans in Argentina.

So the Argentina production is more concentrated in a much smaller area which is exactly where the severe drought is.

This means that the drought in that location will be high impact over extremely high production land and production losses will be greater than what Brazil would see over the same amount of land in drought.

List of countries by soybean production

https://en.wikipedia.org/wiki/List_of_countries_by_soybean_production



>1,000,000 tonnes

RankCountry20202019201820172016
1 Brazil121,797,712114,316,829117,912,450114,732,10196,394,820
2 United States112,549,24096,667,090120,514,490120,064,970116,931,500
3 Argentina48,796,66155,263,89137,787,92754,971,62658,799,258
4 China19,600,00018,100,00015,967,10015,282,50012,788,894
5 India11,226,00013,267,52010,932,97013,158,73013,159,000
6 Paraguay11,024,4608,520,35011,045,97110,478,0009,163,030
7 Canada6,358,5006,145,0007,416,6007,716,6006,596,500
8 Russia4,307,5934,359,9564,026,8503,621,7123,142,693
9 Bolivia2,829,3562,990,8452,942,1312,671,0463,203,992
10 Ukraine2,797,6703,698,7104,460,7703,899,3704,276,990
11 Uruguay1,990,0002,828,0001,334,0003,212,0002,208,000
12 South Africa1,245,5001,170,3451,540,0001,316,000742,000
13 Indonesia1,040,000980,000953,571538,729859,653
14 Italy1,005,6301,042,8301,186,3501,019,7811,081,340

                                    


By Jim_M - Nov. 27, 2022, 1:41 p.m.
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Concerning biodiesel, very much just IMO, the writing is on the wall and liquid fuels (bio and fossil) are on their way out.  If we had the same diesel problems 10 years ago that we are having now, diesel prices would be $10 a gallon.  

And a couple percent won't eat into what is going to be 160mmt crop from SA this year.  Again....just my opinion.



Beans
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By metmike - Nov. 27, 2022, 2:55 p.m.
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Thanks Jim!

Slightly more rain for N.Argentina, mainly week 2:

More reliable GFS ensemble below:

https://mag.ncep.noaa.gov/Image.php


Unreliable GFS operational model below that updates automatically:

http://wxmaps.org/outlooks.php



++++++++++++++++++++++++

In addition, here's the temps. This is pretty bullish for beans.



Re: Beans
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By metmike - Nov. 27, 2022, 2:57 p.m.
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https://mag.ncep.noaa.gov/Image.php

1 year below  Bull or Bear flag/wedge/pennant?  Breaking support or resistance will tell. 


Beans 40 years below. In lofty territory! Triple top or new, much higher trading ahead with a bull flag???