2013 World Grain Outlook

Transcription

1 2013 World Grain Outlook Presented by: John Roach February 18, 2013

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 market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided 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 World Economy

4 World growth rates Large economies

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6 United States

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10 The U.S. Dollar s Trend

11 Dollar Index Green Line 20-day Moving Average Red Line 200-day Moving Average Source: Futuresource, CME

12 Source: Futuresource, CME Weekly Dollar Index

13 Commodity Speculation

14 CFTC COT Report - Corn Sum of Managed Money & Large Traders - Net Position Contracts Source: CFTC COT Report Source: CFTC COT Report

15 CFTC COT Report - Soybeans Sum of Managed Money & Large Traders - Net Position Contracts Source: CFTC COT Report Source: CFTC COT Report

16 80000 CFTC COT Report - Chicago Wheat Sum of Managed Money & Large Traders - Net Position Contracts Source: CFTC COT Report Source: CFTC COT Report

17 Source: Goldman Sachs Global Research Goldman Volatility Index

18 So where has investor money gone?

19 Source: Bloomberg

20 Source: Bloomberg

21 U.S. Acreage

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23

24 *Informa 2013 Estimate 99.3*

25 *Informa 2013 Estimate 78.96*

26 *Informa 2013 Estimate 57.1*

27 *Informa 2013 Estimate 10.0*

28 The Weather

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35 Soybean Fundamentals

36 Source: USDA WASDE

37 What is happening to the Brazil and Argentine Crops?

38 Source: USDA WASDE

39 Source: USDA WASDE

40 Source: USDA WASDE

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43 Source: USDA Crop Progress

44 Source: FCStone, NOPA

45 Source: USDA WASDE

46 Corn Fundamentals

47 Source: USDA WASDE

48 Source: USDA WASDE

49 Source: USDA WASDE World Coarse Grains Ending Stocks Days of Supply Days of Supply

50 Source: USDA WASDE

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53 Source: USDA WASDE

54 Source: USDA WASDE

55 Source: USDA WASDE

56 Source: USDA WASDE

57 Source: USDA WASDE

58 Source: CME Daily Livestock Report

59 Hogs & Pigs Source: USDA Quarterly Hogs & Pigs, FCStone

60 Source: USDA Cattle on Feed, FCStone

61 Source: QST, CME Cattle problems

62 Daily livestock report

63 Daily livestock report

64 Data for October showed that inflation for food consumed at home was up less than 1% from a year ago. At the same time, inflation for food consumed away from home rose 2.7% vs. October Daily livestock report

65 Source: CME Daily Livestock Report

66 Feed estimates are still too low Protein balance tables adjusted in Feb 8 th report: Combined beef, pork, broiler forecasts up billion lbs Since Dec Forecast Broiler up 845 million lbs Pork up 650 million lbs Beef up 510 million lbs If U.S. economy continues to show improvement, look for larger feed demand. Source: USDA WASDE

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68 Wheat Fundamentals

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70 Source: USDA WASDE

71 Source: USDA WASDE

72 Source: USDA WASDE

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74 Source: INTL/FCStone, USDA

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77 U.S. Wheat Feed Use (million tons) / / / / /13 Source: USDA PSD

78 Source: USDA WASDE

79 Source: USDA WASDE

80 Source: USDA WASDE

81 How Should U.S. Farmers Market Their Crops?

82 Rule # 1 Focus the majority of sales in the 1 st half of the year Best Prices Usually Occur in March to June

83 Rule # 2 Sell only when markets are giving us a Roach Ag Sell Signal

84 2013 November Soybeans

85 2013 December Corn

86 2013 July Chicago Wheat

87 Rule # 3 Figure out the percentage of bushels you are comfortable selling each and every spring and tie that % to the your crop insurance policy coverage level / farm profits

88 Rule # 4 Make sure you have enough on-farm or other owned storage to hold the balance of a crop with room for upside in yields.

89 Rule # 5 Make sure you sell enough in the spring prior to harvest to generate necessary cashflow from harvest through February

90 Rule # 6 Split your old crop bushels and new crop contracts into between 3 and 5 increments and sell one increment on each Sell Signal

91 Cover Unsold and Sold Grain Buy Puts on spring Sell Signals Hold them until an August September or Buy Signal It takes advantage of the normal price decline Cash in and wait until next year May also sell Calls but loss potential makes this very risky Spend about 30 cents on corn and 50 cents on bean Buy calls on sold grain when concerned for weather. Don t re-own grain directly after a sale unless trend is positive.

92 Roach Ag Marketing, Ltd. 568 East Yamato Road Suite 200 Boca Raton, FL