RCM Ag Services

Category: Corn

08 Jan 2021
Agriculture, Corn, Cotton, Dow Jones, Market Commentary, Market Updates, Soybeans, U.S. Dollar, Weekly Prices rcmagserv 0 comment

Harvest Market Updates: January 2-8


Corn continues its run up and briefly traded over $5 this week. Corn and beans charts look very similar as you can see below as corn has followed beans. What I mean is bean news moves the markets more so than corn right now as exports for both to China (and others) have been steady for a while now with some surprises from time to time. China announced this week their intention to plant more corn acres this year and expand ethanol production, but with Chinese corn still at around $10 it will be hard for them to make any major waves quickly. With South American weather continuing to be dry in the big picture this should keep SA from producing a huge crop. Old crop corn prices are strong but new crop Dec ’21 continues to lag and will ultimately depend on the South American crop and planted acres before we see any big movement. Keep an eye on the Jan USDA report that comes out the 12th for any change in news.

Via Barchart


Soybeans have had a great last couple months as they continue to run up and get over $13.50. As South America continues their dry outlook into the summer in the southern hemisphere. Argentina has a really good chance for wide sweeping rain next week but returns to dry after that. As South American weather still looks to be problem it will continue to be supportive of beans. With good exports again this week and weather issues in SA the underlying fundamentals remain supportive. Brazil has now started importing soybeans from the US as well as China and will continue to do so until harvest. With this runup we still see down days and even sizeable downward movements, this usually will stem from profit taking until we see fundamentals change. With soybean prices where they are this will lead to farmers switching over some acres which will be an important talking point heading into the spring. We continue the view of selling all of your ’20 crop and not paying for storage to take advantage of these prices. If you do not want to miss out on any further movement higher we suggest at looking at re-ownership on board if it fits your risk level.

Via Barchart


Cotton has seen a nice bump higher as we have gotten into the 80s for several trading days. Cotton may benefit the most from the weaker dollar more so than grains. US cotton is still cheaper than cotton in China (even with cost of delivery) so this should keep the US product competitive and sought after. With the outlook of 2021 moving out of the pandemic with vaccines, demand will rise for all textiles but cotton mills will ramp back up in India and China the most. March cotton chart is below.

Via Barchart


Dow Jones
The Dow has gained over the last few weeks as investors have gotten a better look as to what the next 4 year will look like as both Georgia senate seats went to the Democrats. Many experts think that moderate Dems will be the most important over the next 4 years as they will not vote completely on party lines and prevent any drastic changes. However, it will be important to keep an eye on the markets as we get closer to the Biden administration taking over as investors look to avoid new taxes.

US Dollar
The dollar has continued to stay low and may head lower. This is supportive of US commodities in the world market and would help exports in the big picture.

Via Barchart.com

23 Dec 2020
Agriculture, Corn, Market Commentary, Market Updates, Podcast rcmagserv 0 comment

Acing Agriculture with Dr. Scott Irwin

For the commodity world, 2020 has been particularly interesting. Between stimulus packages and China buying pullback, to ramping up production and setting up for a potential big comeback in 2021 it feels like we’ve been living through a game of ping pong. So to review it all – plus give some insight into 2021 – we’ve brought Dr. Scott Irwin on to go through it all. Dr. Scott Irwin is chair of the Agricultural Marketing in the Department of Agriculture and Consumer Economics at University of Illinois Champaign-Urbana. Scott is a national and international leader in the field of agricultural economics. His research on agricultural markets is widely-cited by other academic researchers and is in high demand among market participants, policymakers, and the media. In today’s episode, we’re talking about 2021 and beyond, game changers in the ag market, Chinese demand, the USDA report, University of Illinois program, and FarmDoc.

 

 

Follow along with Scott on Twitter and LinkedIn and check out FarmDoc.

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Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit www.rcmalternatives.com/disclaimer

21 Dec 2020
Agriculture, Corn, Market Commentary, Market Updates, Soybeans, Weekly Prices rcmagserv 0 comment

Ag Market Updates: December 12 – 19

Corn followed beans up this week as exports continue to roll. China continues to be a buyer of US corn and continued La Nina weather in South America are helping pull prices up. Corn will continue to go as soybeans go (as usual) so any positive soybean news is also supportive for corn prices. There continues to be upside in the market as fundamentals continue to bullish with the downside being a change in weather for South America. Corn has been slow and steady and will continue to be with exports being the main news.

Via Barchart

 

Soybeans finally broke through the $12 mark this week as world demand continues to drive prices. China potentially switching bean cargoes from Brazil to the US on shipping delay concerns (Argentina port workers strike) were supportive news as well as continued South American weather concerns. Southern Brazil and Argentina look to be dry into the end of the year while the rest of Brazil will get enough rain to keep it steady. As exports continue to be strong and on the high end of expectations it does not look like bean demand is going anywhere. Bean sales have reached 90% of the annual USDA forecast with 8 ½ months left in the reporting year. Until South American harvest gets rolling US beans look to continue to benefit from the export demand. With the magic $12 threshold being past we could see this run continue.

Via Barchart

 

Dow Jones
The Dow gained on the week as vaccines rolled out across the country while the current COVID wave is seeing new records every day. Congress continues to negotiate a stimulus bill as the year comes to a close. Many investors see 2021 as ripe for growth and still think there is time to get in to take advantage of a post Covid-19 US even if you missed the run up to 30,000 from the March lows.

Crude Oil
Crude Oil has rallied back to pre-lockdown numbers this week as it got back to $49/barrel. As fuel consumption has slowly been growing a second round of lockdowns could lead to over supply problems if drilling is also not cut back.

US Dollar
The US dollar has continued to fall as it is again seeing value not seen sine early 2018. A low USD helps commodity prices and cotton more so than others as we have seen cotton’s recent run up.

Weekly Prices

Via Barchart

17 Dec 2020
Agriculture, Corn, Cotton, Market Updates, Meats, Podcast rcmagserv 0 comment

Ag Market Updates: December USDA/WASDE Report

In this monthly segment on The Hedged Edge, RCM Ag Services pros Jody Lawrence, Ron Lawson, Kevin Bost, and host Jeff Eizenberg come together to provide expert knowledge on important markets including cotton, meat, and grains following the USDA Report.

During today’s episode we’re talking about reporting back from farmers on the recent USDA report, labor shortfalls,  taxes and tariffs, commodity price inflation, adjusting planting intentions, feed prices affecting hog/cattle prices, calorie reports, corn vs beans,  and more from the report and looking towards the end of 2020.

 

 

Find the full episode links below:

 

11 Dec 2020
Agriculture, Corn, Cotton, Dow Jones, Market Updates, Soybeans, Weekly Prices, Wheat rcmagserv 0 comment

Ag Markets Update: December 5 – 11

Corn was down a little on the week as there was not much news on either side. The USDA report came with a mixed bag of information as corn had minimal loses after it. The US corn stocks came in 11 MBU above estimates, but world numbers came in 12 MBU below making that news mostly a wash. They did not touch many numbers but did raise Chinese imports or corn by 16.5 mmt. Many experts still see 16.5 mmt on the lower end of imports and will probably end up being higher. Corn does not have quite the bullish news behind it of beans, but a sharp up move in beans will bring corn with it. Continue to keep an eye on exports to China and South American weather.

Via Barchart

The USDA report for soybeans came as a mixed bag of news. The US ending stocks came in higher than expected but still lower than the Nov report (190 MBU in Nov vs 175 MBU Thurs vs 168 mil bu expected). Thursday saw a wide range of trading from 18 higher to 8 lower as you can see in the chart below, and settled down a few cents post report. The main focus will now shift to world demand and South American weather as we head towards the end of 2020. In a La Nina year, drought conditions and warm temperatures can cause issues although recently SA weather has gotten some relief. Any surprise sales will be welcome news as well to push prices higher, but if South America has a production problem that will be the biggest market mover going forward until the January USDA report. Many experts are still bullish bean prices heading into 2021. We stand on our suggestion of not storing beans into the 2021 planting season to take advantage of great prices and potentially look at re-ownership strategies if it fits your risk profile as we look ahead to 2021.

Via Barchart

 

Cotton had a good week boosted on Thursday by the USDA report which provided some bullish news for cotton prices. It lowered production by 1.1 million bales (900,000 bales of which came from a reduction in Texas). Mill use was unchanged, but they raised exports 400,000 bales to 15 million as world consumption and US exports rise. Ending stocks were also 1.5 million bales lower to 5.7 million (or 33% of use). The USDA also lowered world ending stocks by 3.9 million bales expecting lower production and higher consumption. The 2.2 million bale decline in global production comes from the US reduction as well as 1 million bale reduction between India and Pakistan. China is also expected to import more cotton than the previous report. All of these are bullish news for cotton as well as continued drought conditions in west Texas that could cause problems come the spring if the conditions continue for too long. Another bullish factor looking to 2021 crop is with bean and corn prices where they are and cotton prices still trailing we could see acres used for cotton switch to beans or corn in areas where the soil allows. There is still a pandemic raging throughout the world with a second wave in full effect so consumption in the near future may be holding cotton prices back.

Via Barchart

 

Wheat had solid gains this week on Wednesday and Thursday after falling the previous trading days. The USDA report provided some bullish news with smaller supplies, higher exports, and lower ending stocks with no change to the domestic use. The 20/21 global wheat outlook is for larger supplies, increased consumption, higher exports, and reduced stocks. This probably comes on the heels of vaccines rolling out hopefully easing lockdowns as life gets back to normal throughout 2021.

Via Barchart

 

Dow Jones
The Dow has traded up and down over the last week making small gains as the market seems to have priced in the COVID vaccine being rolled out in the next week after FDA approval (hopefully) in the coming days. The approval of the vaccine and Operation Warp Speed going into effect could help support this runup of stocks into the new year, however, if Congress can’t get a stimulus bill together, we could see another pullback. There are still many questions about what a Biden presidency will look like for taxes and regulations coming to Wall Street at the start of 2021 as well.

Water Futures
The CME began trading water futures on Monday as yet another way for farmers to hedge their production if they use irrigation. Water will not require any physical delivery like other futures contracts. This will allow farmers to hedge against water scarcity or shortages that could hurt their crop. Read the entire article here.

Weekly Prices

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04 Dec 2020
Agriculture, Corn, Dow Jones, Market Commentary, Market Updates, Soybeans, U.S. Dollar rcmagserv 0 comment

AG MARKETS UPDATE: NOVEMBER 21 – DECEMBER 4

Corn was unchanged over the last 2 weeks as it has been range bound between $4.20 and $4.40 as you can see in the chart below. This is the first stretch like this since corn began its climb up, as there hasn’t been any new news to really propel it. China continues to be the main buyer as we have come to expect, but with no surprise sales or weeks above expectations that hasn’t been enough to break through. The break followed by a bounce is good to see as markets remain bullish, but needed a correction along with the end of the December contracts in the last couple of weeks. Chinese demand of corn will continue to be the bullish news as we look for that to continue.


Via Barchart.com

 

As you can see from the chart below beans have had a couple decent size swings in the last two weeks despite only being down 10 cents over that time. In that span we have seen January soybeans touch $12.00 and dip to $11.43 before the recent bounce back. The good news is it appears that Chinese buying should help keep some support under soybeans as they will look to be aggressive buyers when price falls (like the recent 50 cent dip then bounce back). South America will get some rain across Brazil this week, but the La Nina pattern looks to bring hot and dry weather in the coming months during an important stretch. After the fall at the start of the week it is nice to see a bounce back to current levels showing there is still bullish support. With funds continuing to be near record long, when they decide to take profit we may see dips similar to this week. We continue to hold the same strategy of not storing beans into the new year and take advantage of strong prices while if you believe markets are going higher to look at ownership on the board.


Via Barchart.com

 

Dow Jones
The Dow has traded over 30,000 several times over the last 2 weeks, but has failed to hold onto that number for a longer run up. Positive vaccine news and the possibility of vaccinations starting this month were the main driver to get it to this point. Stimulus talks have resumed as well, with some sectors getting boosts from investors expecting targeted stimulus to certain sectors (airlines as an example).

US Dollar
The USD has continued its fall over the last couple of weeks. The 3-year chart below shows where the USD is relative to the past few years and shows that we are at levels not seen since early 2018. A weaker USD helps US commodities and makes them more competitive on the world market.


Via Barchart.com

 

Phase 1 Trade Deal
Just a quick note: Joe Biden said he will not immediately cancel the Phase 1 trade deal with China or take steps to remove tariffs currently in place.


Via Barchart.com

19 Nov 2020
Agriculture, Corn, Dow Jones, Market Commentary, Market Updates, Soybeans rcmagserv 0 comment

Ag Markets Update: November 14 – 20

This week’s gains follow on the news from the USDA report from last week, as well as continued export sales. As we have seen from the last two pullbacks in the chart below, corn has bounced back and reached new contract highs this week. US corn is still cheap on the world stage so we should not struggle to find countries wanting to buy from us. Exports have slowed but are still consistent and strong, putting us in a much better position this year than we were this time last year. There was some pullback from the highs as there was profit taking from the funds even though they still are very long. Corn and beans have been moving very similarly as you can see from the two charts, and we expect this to continue as the underlying fundamentals moving the markets are the same with exports and South America weather.

 


Via Barchart

 

Soybeans saw another positive week as they move for similar reasons as corn. Beans traded up over $11.85 but have fallen back from those levels the past couple of days. Central Brazil’s weather remains good as planting was 67% complete and making progress. Southern Brazil and Argentina still have a dry outlook, despite getting more rain than expected this week. Looking forward to next week, we’re expecting some more strong rain, but the promise is still slightly too far out to be confident in. Exports continue their strong run as we expect them to into the new year. World bean, bean oil and other oils (palm oil, etc) all have very strong prices. With such a broad demand strength this is supportive for beans as well. The bulls have all the factors on their side from fundamental to technical which is why we have seen some crazy intraday ranges.


Via Barchart

 

Dow Jones
The Dow flirted with 30,000 this week but did not get over the hump and has since drawn. More positive Covid-19 vaccine news came out this week with another potentially 90% effective vaccine being announced for roll out. As Joe Biden begins filling seats in his cabinet-to-be, along with the senate race in Georgia, those will be the political market movers for the time being.

Via Barchart.com

13 Nov 2020
Agriculture, Corn, Dow Jones, Market Commentary, Market Updates, Soybeans rcmagserv 0 comment

Ag Market Update: November 7 – 13


Corn saw a big boost from the USDA report this week at they lowered yield expectations and export projections for the year. They lowered the expected yield from last months report from 178.4 to 175.8. The trade was expecting a lower number (trade expectation 177.7) but was very responsive to this. They also raised expected exports 325 million bushels to 2.65 billion bushels which would be a massive number. Most of the new demand they expect to be China and S. Korea with less going to Mexico and the EU. Large exports to China keep rolling and these are expected to continue, but will vary from week to week. The continued weather problems in South America, with dryness in south Brazil and Argentina, is forecasted to the end of the month. The pullback after the jump up is expected as funds take profit as they are still long about 1.8 billion bushels. Ethanol production is slowly growing but lockdowns could put an end to that.


Via Barchart

 


Soybeans have had a very strong week following the USDA report. They did not make any adjustments to their export estimates ,but did lower yield to 50.7 BPA from 51.9 BPA. They also lowered ending stocks which was the big mover as carryout is expected to be 190 million bushels down from 290 million last month. Like corn, soybeans have some support from South American weather issues. Beans have held on to most of their gains after the report where corn has dipped back. Soybean demand will continue as China is a buyer and meal is needed as well for hog feed. Funds continue to have a record long position in beans (1.4 billion bushels). With this huge run up beans could see a 20+ cent pullback and still be seen in a bullish trend.


Via Barchart

 


Dow Jones
The Dow had a huge day Monday on Covid-19 vaccine news, but came back down to earth a little bit throughout the rest of the week as Covid cases in the US and around the world continue to surge and make new daily highs. As officials continue to warn that we are about to enter the worst time of Covid, we’ve seen lockdowns in major cities are starting to go back in effect.

Via Barchart.com

06 Nov 2020
Agriculture, Corn, Dow Jones, Market Commentary, Market Updates, Soybeans rcmagserv 0 comment

AG MARKET UPDATE: OCTOBER 31 – NOVEMBER 6


Corn mounted a comeback to get back above $4.00 this week on export news along with South American dryness. Corn needs China to continue to be huge buyers as they try to follow soybeans higher. Corn exports this marketing year are running 179% ahead of this week last year and are already 56% of what the USDA forecasted. If the USDA raises export forecasts because they see this trend continuing, that would be bullish on the demand side as we head into 2021. Corn has not had the violent swings like soybeans but their charts look similar as exports have been their main mover. South American weather will be a market mover as we head into their growing season so keep an eye on their dryness because if it continues in future forecasts it will be bullish. The election does effect the commodities market, like every market, so there may still be some volatility as the election results slowly (very slowly) come in.

Via Barchart

 

Soybeans have had a very strong week after slipping a bit to end October. With huge export numbers continuing and a dry La Nina pattern forming in South America, U.S. bean prices topped $11 for the first time in 4 years. The factors causing this run up have still been exports and South America worries, with exports being the main factor (for now). The continued forecast of dry weather in South America is starting to get long enough to cause some serious worries about the crop, especially if the forecast keeps the trend in some regions. The U.S. Dollar has also fallen over the last week helping U.S. commodities become more favorable to other countries. As the election may be up in the air for a while for both the presidency and senate all markets will remain volatile. We continue to suggest selling all your soybean crop and not carry any into 2021 to take advantage of this run as prices in March are lower than January futures.


Via Barchart

 


Dow Jones
The Dow took off this week despite all the volatility going on with the election and so many uncertainties days later. As quickly as it fell last week it has recovered just as fast this week. Still many questions remain about the election outcome, which the market will be watching closely, but markets are banking on the republicans maintaining control in the Senate which would hinder any large scale democratic changes for the time being.

Energies
The energy sector got a boost out of the election as they believe the Republicans can keep control of the senate, which would put a fork in the “Green New Deal” or any other major energy overhauls that could have been accomplished with a democratic sweep.

30 Oct 2020
Agriculture, Corn, Dow Jones, Market Commentary, Market Updates, Soybeans rcmagserv 0 comment

AG MARKET UPDATE: OCTOBER 24-30


Corn is down on the week as funds took profit on their historically long positions as they have liquidated over 200 million bushels worth, still holding a large long position. The underlying fundamentals this week remained strong despite the big loses. Exports were strong again this week as China continues to buy & with bigger purchases from Mexico as farmers worry their crop may not be as large as expected. The forecast for Argentina has turned drier giving South America a concerning supply issue. As the La Nina weather pattern continues to strengthen, continued dryness looks to be in the future. The demand for ethanol going forward remains a big mystery as COVID cases continue to rise across the US and Europe. Ethanol production has not returned to pre-pandemic levels, but another shutdown could drive it back to spring levels. The fundamental outlook for corn continues to be bullish despite this week’s price movement.


Via Barchart

 


Soybeans were down on the week for similar reasons to corn. Exports were strong even though they were lower than last week’s report. Continued dryness in South America will be another bullish fundamental factor to keep an eye on as this may present continued selling opportunities after harvest if you stored any production as well as improvements to ’21 prices. The market selloff in all markets was the main problem as Covid-19 cases continue to rise around the world and uncertainty around next week’s election. Bean harvest was seen at 86% complete heading into this week. Even with snow in the Midwest, a warmer pattern looks to be on its way to allow farmers to get back in the fields and finish up harvest. Like corn, the underlying fundamentals remain bullish for soybeans if Chinese demand continues.



Via Barchart

 


Dow Jones
The Dow was hit hard this week as Covid-19 cases around the world are on the rise bringing about fear of another economic shutdown to slow the spread. Along with rising cases, the potential of delayed results from the election and uncertainty about the outcome looms large. Several of the largest tech companies in the world reported earnings this week as well.

Presidential Election
President Trump and former Vice President Joe Biden’s months of campaigning and debating will come to an end next week (hopefully). With the potential of a democrat sweep, many experts are trying to predict the possible outcomes. But if we learned anything from 2016’s election, it is that the polls are hard to get an accurate read on. As the eyes of the world are on the US Nov 3rd , the futures markets are sure to be interesting to watch.

Weekly Prices


Via Barchart.com,

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