You can eat soybeans in my bed anytime

"You took the words right out of my mouth"

At 9:01 Brazil time on Thursday, when the Conab report came out,  

I was speechless.(I thought of Meatloaf at the time)

Never in the history of Conab have they ever

cut more than 7 million tons from report to report. The last time

was 2012, when the soybean crop was half as large as today.

I recently penned a newsletter titled "I was a bull when being

bullish wasn't cool" paying homage to Barbara Mandrell's

hit from 1981 "I was country when country wasn't cool".

This blog will be named "You can eat soybeans in my bed anytime"-

assuming you still have any ;>)

I wrote this in an old newsletter several weeks ago. I know many

people get lost when bouncing back and forth between millions

of tons and billions of bushels. 

The USDA said last week that old crop soybean carryover

will be 300 million bu or 8 million tons. Pipeline is said to

be 150 million bu or about 4 million tons.

Brazil came into 2022 with 4 MMT of old crop soybean

stocks. 

Brazil was expected to increase from 138 MMT to 145 MMT

this year or another 7 MMT. This is long gone. 

Last week, Conab basically confirmed that 20 MMT of Brazil

soybeans is gone. I think we need to be weary of possible

found acres later on. If there are extra acres, they are up north.

(Could we find 1 or 2 mmt later? ). YES

Chronic rains in the north will keep pressure on soybean quality

in the month of February. 

The million dollar question is: will continued dryness

in RGDS pull the production numbers even lower?

Possible- yes 

The anecdotal item that has my ears perked up is the datapoint

that insurance companies in Parana are cancelling 2nd crop

corn insurance policies to farmers. Why?

Did someone poop in their pants when looking at continued

"La Nina" weather maps? 

Maybe someone's testicles have not dropped yet?

If so, they have no business being in crop insurance

business. 

With Paraguay talking 4 mmt which is down from 10-11 mmt

of potential. Uruguay will come in 1 or 2 million tons light.

Argentina is looking more like 40 MMT which is down

from 50 MMT to start with. 

Bottomline is: USA can plant as many soybeans as she wants

in 2022. The market can take it all. 

Brazil will likely only export about 80 MMT in 2022.

At one time, we were thinking 90 MMT.

With the profitable crush margins, Brazil wants to

try and crush 45-48 MMT in 2022 if they can find the

beans. 

I think by Sept, USA will be down to pipeline stocks of

soybeans and by December, Brazil will have "Zero" beans

remaining in the country. Seed only.

Soybean market likely to be stimulated all year now.

There is no room for production hiccups

in USA in 2022. 

If any threat of crop losses, the markets will be explosive

now.

I remember back to Nov 9th low in beans. I was saying this

should be a low and we should rally back to 13.15 at some point.

This seemed insane at the time.

Many experts were looking for 11,10, and even 9 dollar soybeans.

This next week, we will likely check out 14.80 again basis

Nov 22 soybeans. 14.80 always bothered me last year.

It did not act like a high.

If the high would have been 14.74 3/4, I would have been

the biggest bear in the world.

14.80 was a long term "hint". "I ain't done yet" 

This is what SX was telling us 9 months ago. 

There are always hints in the market. The problem is finding them

and looking for subtle signals that a novice overlooks as just

another fundamental number.

There are more to the markets than fundamentals. But, it seems

like it takes looking at charts for 30 years to be able to see them.

If we cannot trade 14.80 early in the week basis Nov 22, then I would

think a sell off is likely.

If we trade 14.80- that will be one thing.

If we close on top of 14.80 twice, then I think it is

a straight shot to 16.36 basis SX.

When do we get there?

Maybe March 3rd maybe 

April 4th. 

I think there will be many 50 cent and 1 dollar moves

up and down between now and mid June.

Keep the Dramamine handy, the soybean market

will likely do a few barrel rolls and maybe even

a few power on stalls. Let us hope that does not

put us into a death spiral whereas it is difficult to

pull out of. 

The next 120 days will likely be something to

tell the grand kids about. 

If you missed out on 2008 and 2012, the next

crazy train is about to leave.

All aboard !!!!

Please bring your roasted soybeans with you ;>)

Kory