Category: Dow Jones

13 May 2024

AG MARKET UPDATE: APRIL 19 – MAY 10

Corn has seen a strong rally over the last couple of weeks as planting is slightly delayed in parts of the US and funds seem to have changed their tone a bit. Last week’s USDA Report did not have any earth-shattering news but did provide some good news for the markets. US corn stocks were lower than estimates heading into the report along with world stocks for both 23/24 and 24/25. The production outlook for this year, 181 bu/ac, continues to show how the advances in agronomic practices and seed genetics continue to grow. All of these carryout and stocks numbers are based on those production estimates so if we begin to see weather issues or problems at the end of planting, we could continue to see revisions to the downside, and vice versa with great weather and conditions.

Via Barchart

Beans had a rough week after a strong start to May. The USDA Report leaned bearish as the South American production continues to expand for the upcoming year. The USDA is slowly trimming Brazil’s bean crop but is still above CONAB’s estimates by a bout 300 million bushels. The recent flooding in southern Brazil will force their hand to lower their expectations but the CONAB estimates on losses will be closely watched. Another promising development in the report was the expectation of record imports and usage in China. While much of this is expected to be met by Brazil and issues with their production will still need to be met.

Via Barchart

Equity Markets

The equity markets have rebounded over the last couple weeks with earnings season going on. The feeling on Fed rate cuts keeps pushing them back with one not expected until the fall and at least one fed chair thinking we may not get one this year as inflation remains sticky. Rates will remain data dependent but the feeling of higher for longer continues to seem more likely.

Via Barchart

Cotton

  • Cotton has fallen well off the February and March highs as the lack of demand in the global market mixed with funds exiting their long positions has beaten down the market.

Via Barchart

Wheat

  • Wheat’s recent rallies are welcome after struggling to find much positive movement in the market to start the year. Frost damage to Russia’s wheat crop and a dry pattern in the Black Sea has been the recent mover as the USDA Report had some mixed numbers. Smaller than expected US stocks, 24/25 world stocks and total production with higher than expected world wheat stocks for 23/24.

Other News

  • Conflict continues between Israel and Palestine as a ceasefire has been negotiated on many sides, but nothing has been agreed to yet.
  • Major flooding across southern Brazil has killed thousands of livestock and will have an impact on their crop but the extent of which is not known yet

Drought Monitor

Here is the current drought monitor as we head toward planting with subsoil moisture a focus.

Via Barchart.com

Contact an Ag Specialist Today

Whether you’re a producer, end-user, commercial operator, RCM AG Services helps protect revenues and control costs through its suite of hedging tools and network of buyers/sellers — Contact Ag Specialist Brady Lawrence today at 312-858-4049 or [email protected].

 

22 Apr 2024

AG MARKET UPDATE: APRIL 8 – 19

Corn continued its slow bleed lower over the last couple weeks with no major bullish news to turn this market around. US weather may slow planting down to end April a bit but not enough for markets to begin to worry anytime soon. Argentina’s rain will continue to slow harvest as the discrepancy between the USDA and South American reporting services remains a mystery. The bounce to end the week was due to escalation of the Israel and Hamas/Iran fighting in the middle east.  According to Reuters the US EPA is expected to announce plans to temporarily waive restrictions on higher-ethanol gasoline blends this summer. This market is at the mercy of funds and weather which currently aren’t helping prices higher.

Via Barchart

Beans continued lower as they lost another 20+ cents this week even with the big up day on Friday. Beans need any good news they can get as you can see from the chart below it has been a rough few months. Soybean oil has also had a rough go lately as bullish news is lacking in the soybean complex. The size of the bean harvest with the USDA and CONAB numbers still far apart will be the biggest factor moving forward as we need all the information we can get. We did get close to the technical support which is good to see a bounce there.

Via Barchart

Equity Markets

The equity markets continued their recent struggles as tech and AI stocks have given back some recent gains. Pullbacks are healthy for markets, especially after the run we have had to start the last few months being so concentrated, but sticky inflation and war escalation provides some problems to monitor as earnings are set to ramp up next week.

Via Barchart

Other News

  • Israel retaliated against Iran overnight continuing the escalation of tensions and war in the middle east.
  • The USD keeps moving higher as the June USD Index went over 106 earlier this week.
  • Cotton has struggled of late as a lack of demand on the global scale and no weather issues yet in the US pulled it back from recent highs.

Via Barchart

Drought Monitor

Here is the current drought monitor as we head toward planting with subsoil moisture a focus.

Via Barchart.com

Contact an Ag Specialist Today

Whether you’re a producer, end-user, commercial operator, RCM AG Services helps protect revenues and control costs through its suite of hedging tools and network of buyers/sellers — Contact Ag Specialist Brady Lawrence today at 312-858-4049 or [email protected].

12 Feb 2024

AG MARKET UPDATE: JANUARY 26 – FEBRUARY 9

Corn has had a rough 6 months and continued lower with bearish sentiment and funds being short. The USDA report had higher Brazil corn production than the CONAB numbers by 10.25 MMT. The market has been looking for any good news to help put a floor in and that has not materialized. The one bright spot in exports is that we are ahead of pace to both Japan and Mexico for the year while China’s demand has been poor heading into the Lunar New Year. The USDA report pegged 23/24 US corn stocks at 2.172 billion bushels, close to the pre-report estimates.

Via Barchart

As bad as the news, or lack of news, for corn has been, the news for beans has been worse. In this week’s USDA report the US bean stocks came in at 30 million bushels higher as exports struggle. Brazil bean production came in above expectations as well with a 156 mmt production (trade estimate of 153.15mmt). With a quiet period occurring during Chinese Lunar New Year it is unlikely to see strong exports and weather is neutral to bearish in South America.

Via Barchart

Equity Markets

The equity markets continue to climb as the S&P 500 closed over 5,000 for the first time on Friday. The market has been pulled higher by the same stocks that have gotten it to this point in the magnificent 7 and AI stocks rallying. Analysts are debating whether the rally should broaden in 2024 or remain top heavy as it has started. The Fed will likely keep rates where they are until at least the summer.

Via Barchart

Other News

  • The bearish USDA report continued to weigh on the markets as South American production came in above expectations, still higher than many private estimates.
  • Thanks to Chip Flory and Davis Michaelson for having Jody Lawrence on their internationally known and critically acclaimed AgriTalk radio program last Friday. Here is the link.

 

Via Barchart.com

Contact an Ag Specialist Today

Whether you’re a producer, end-user, commercial operator, RCM AG Services helps protect revenues and control costs through its suite of hedging tools and network of buyers/sellers — Contact Ag Specialist Brady Lawrence today at 312-858-4049 or [email protected].

 

17 Sep 2023

AG MARKET UPDATE: SEPTEMBER 1 – 15

The September USDA Report this week did not give the bulls much to work with, having yield come in above estimates at 175.8 bu/ac and increasing planted acres by 800,000. The increased acreage and yield would still result in a record crop of 15.134 billion bushels despite the drought conditions that bookended this growing season. The largest sale of corn to China since April occurred this week as they made a purchase at the lowest prices in months even with a strong USD. While the markets trade the USDA report, the cash markets in areas are telling a different story with strong seasonal basis and poor crop ratings. Combines will get rolling in the coming weeks and will tell the story of this crop.

Via Barchart

Soybeans fell following the report as well, with the numbers coming in close to expectations but not enough to spark high volumes of buying. The US soybean yield of 50.1 bu/ac following the brutal heat over the end of August and start of September did damage to this crop, but to what extent is hard to tell. The soybean balance sheets are tight for ending stocks and any lower yield from here would eat further into it. The soybean crush numbers were disappointing to end the week, but the stocks were low hinting at the lack of soybeans out in the market currently.

Via Barchart

Equity Markets

The equity markets have been mixed the past couple weeks with various economic data coming in including CPI of 3.7%, slightly hotter than expected, for the month of August. The markets will continue to process data now that earnings are mostly done with, and the Fed is unlikely to raise rates again. The soft landing is still in play, but any economic surprises could derail that.

Via CNBC

Drought Monitor

The drought monitors below show the change in drought conditions over the last 2 weeks.

Via Barchart.com

Contact an Ag Specialist Today

Whether you’re a producer, end-user, commercial operator, RCM AG Services helps protect revenues and control costs through its suite of hedging tools and network of buyers/sellers — Contact Ag Specialist Brady Lawrence today at 312-858-4049 or [email protected].

 

05 Sep 2023

AG MARKET UPDATE: AUGUST 21 – SEPTEMBER 1

Corn has been range bound lately looking for anything to give it direction. The heat and dryness currently happening across most of the US is bullish, but the rains and cool weather before may have given this crop enough to weather the heat. There has been some rain added to the forecast but far enough out to not get too excited about yet. Exports remain steady and within expectations with no major changes expected. Corn has been held down with wheat while Russia sells their wheat for cheap on the world market to pay for the war in Ukraine. Last week’s Pro Farmer tour came back with a 172 bu/ac yield for the US, below the latest USDA report by over 3 bu/ac. While many estimates think the latest USDA is still probably too high, a 172 yield is closer to other estimates even with the current heat. The long weekend always allows for news to change and create a volatile trade to start next week.

Via Barchart

Soybeans fell this week following helpful rains before the heat. The Pro Farmer tour estimated the US crop to be 49.7 bu/ac, below the USDA projection of 50.9 bu/ac. The soybean balance sheets are tighter than corn and will only get worse the more this crop shrinks down the stretch. New crop sales are well behind USDA projections of an 8% decrease for the 23/24 marketing year, currently running 37% behind last year’s pace. With a shrinking crop it is hard to expect export sales to significantly ramp up but if drought conditions continue with heat and river levels stay low we could see logistic problems again this year. The next few weeks will be important to finish this crop but with harvest approaching most of the damage has likely been done.

Via Barchart

Equity Markets

The equity markets rallied over the last two weeks with some important stocks posting strong quarters such as Nvidia. After a tough August the markets will look to bounce back in September with economic data and Fed decisions in the coming weeks.

Via Barchart

Drought Monitor

The drought monitors below show the change in drought conditions over the last 2 weeks.

 

Via Barchart.com

Contact an Ag Specialist Today

Whether you’re a producer, end-user, commercial operator, RCM AG Services helps protect revenues and control costs through its suite of hedging tools and network of buyers/sellers — Contact Ag Specialist Brady Lawrence today at 312-858-4049 or [email protected].

21 Aug 2023

AG MARKET UPDATE: AUGUST 4 – 21

Corn had a rough two weeks with the cool and wet weather that covered large areas of the US coming just in time on a stressed crop. The August 11 USDA Report came in with a 175.1 bu/acre US yield, slightly below trade estimates. This yield seems very reasonable with the early drought stress and the recent rains to help stabilize the crop. The scorching heat and dry weather coming to most of the US the next week+ will stress the crop but the areas that are no longer experiencing drought conditions (see drought charts below) are positioned to handle it. The ProFarmer crop tour is this week and will give insights into what to expect from this crop and give insights we do not get from the USDA. If the USDA updates the planted acres lower from 94 million in September that will be news the market has eyes on.

Via Barchart

Soybeans have held together well over the last couple of months with the low acreage number supporting it. The weather was not great for beans early on, but like corn, the last couple of weeks have been very beneficial and the heat over the next 10 days can cause some issues. The USDA updated their yield estimates to 50.9 bu/acre, below the trade estimates and previous report but also a reasonable number with how the growing season has gone so far. Bean demand appears to be increasing and if this continues into harvest, momentum behind beans could give it another push that corn seems to be missing. The ProFarmer crop tour will be the news this week along with the hot dry weather, an adjustment to acres down the road is a variable that can change the look of this crop.

Via Barchart

Equity Markets

The equity markets have struggled the last few weeks as tech stocks stopped pulling the markets higher and seasonal trends took over. Earnings season is almost over with only a few big names left to report. Inflation and the Fed will be the news moving forward as markets are still unsure what their next move is.

Via Barchart

Drought Monitor

The drought monitors below show the change in drought conditions over the last 2 weeks.

Via Barchart.com

Contact an Ag Specialist Today

Whether you’re a producer, end-user, commercial operator, RCM AG Services helps protect revenues and control costs through its suite of hedging tools and network of buyers/sellers — Contact Ag Specialist Brady Lawrence today at 312-858-4049 or [email protected].

 

21 Jul 2023

AG MARKET UPDATE: JULY 7 – 20

Corn has seen a strong rally after falling following the USDA Report last Wednesday. The USDA estimated the US crop to have a 177.6 bu/ac yield this year following the rough start to growing season with drought conditions over most growing areas. While the rains have been beneficial in providing relief, this crop needs a lot more rain in the form of soaking rains and not storms with straight line winds. If the hot and dry pattern returns expect to see prices move higher. Russia has threatened that they will treat any ship entering the now closed grain corridor as a military vessel has tensions in the Black Sea region high again. The longer this new standoff drags out the more support it will provide grains. The collapse of the USD and inconsistent weather can help support this move higher after a bearish USDA report depending on the future forecasts and technical trading.

Via Barchart

Soybeans have enjoyed a great run over the last month and half as soybeans got back over $14 this week. After a low acreage number and not an ideal start to the summer beans have had a great last 2 months. The forecast hot dry stretch coming up is expected to put more stress on this crop as we head into the end of July and start of August. With tightening world balance sheets it will be hard for funds to get over extended short but every weekend provides the opportunity for surprise rains and new market surprises.

Via Barchart

The big news of the week was Russia threatening all vessels that enter the region as military vessels, escalating the tensions and ending the grain corridor for the time being. Russia keeps attacking Odessa which will damage the remaining infrastructure and could present even more challenges if/when the grain deal resumes. The Russian ambassador to the US has said that Russia is not preparing to attack civilian ships in the Black Sea, though previously the Russian Defense Ministry announced that all ships traveling to Ukrainian Black Sea ports would be considered potential carriers of military cargo, and the southeastern and northwestern parts of the Black Sea’s international waters should be considered unsafe for navigation.

Via Barchart

Equity Markets

The equity markets continued their strength the past couple of weeks with CPI coming in slightly lower than expected (by 0.1%) at 3%. While inflation is still above the target of 2% the slow decrease over time is helping it come down while core inflation, 4.8%, follows the same pattern. The Fed decision at the end of the month is likely to result in a ¼ point rate hike as we head into earnings season next week. Tech stocks took their largest losses that we have seen recently on Wednesday as earnings have begun being posted.

Via Barchart

US Dollar

The US Dollar hit its lowest level in a year this week as the greenback fell below the 100 level. This should help ag exports be competitive on the world stage but the sharp decline from the 103-level last week was surprising.

Drought Monitor

The drought monitors below show the change in drought conditions over the last 2 weeks.

Podcast

With every new year, there are new opportunities, and there’s no better time to dive deeply into the stock market and tax-saving strategies for 2023 than now. In our latest episode of the Hedged Edge, we’re joined by Tim Webb, Chief Investment Officer and Managing Partner from our sister company, RCM Wealth Advisors. Tim is no stranger to advising institutions and agribusinesses where he has been implementing no-nonsense financial planning strategies and market investment disciplines to help Clients build and maintain wealth and reach financial goals since

Inside this jam-packed session, we’re taking a break from commodities, and talking about the world of equities, interest rates, tax savings, and business planning strategies. Plus, Jeff and Tim delve into a variety of topics like:

  • The current state of the markets within the wealth management industry
  • Is there a beacon of hope, or is it all doom and gloom for the markets?
  • Other strategies to think about outside of the stock market and so much more!

 

Via Barchart.com

Contact an Ag Specialist Today

Whether you’re a producer, end-user, commercial operator, RCM AG Services helps protect revenues and control costs through its suite of hedging tools and network of buyers/sellers — Contact Ag Specialist Brady Lawrence today at 312-858-4049 or [email protected].

23 Jun 2023

AG MARKET UPDATE: JUNE 9 – 23

Welcome to the weather market we have been waiting for. The market skyrocketed higher as drought conditions set it across the US as growing is well on the way. The market ended the week with large losses as the chances of rain across a large area is expected over the weekend. While the market was quick to give up 40 cents on chances of rain whether or not that rain comes is still a question mark, let alone the amount needed is unlikely to happen. The US corn crop was rated at 55% good/excellent to start the week, very low for this time of year before we get into the heat of the summer. The actual rainfall amount seen over the weekend will be important, but continued rain in the coming weeks will be needed with minimal subsoil moisture currently helping this crop.

Via Barchart

Soybeans saw a similar rally to corn in the last couple weeks with the drought conditions helping the market higher then rain chances pulling them back. The chances of rain this weekend will help soybeans, like corn, but the soybean crop is not in full panic mode yet although it is in some places. The US crop was rated 54% good/excellent to start the holiday shortened week as the weather market is in full effect. One other piece of news this week was the US EPA adjusting the biofuel mandates for 2023-25. While they raised the blending requirements to 22.38 billion gallons by 2025 many were expecting/hoping for higher amounts to give soybeans another catalyst higher. While they increased the 2023 renewable volume obligation by 120 million gallons from the December proposal, they lowered the RVOs by 300+ million gallons for ’24 and ’25.

Via Barchart

Equity Markets

The equity markets saw losses this week after an impressive run over the last couple of months in tech. Recession fears are still widespread in the market as we are not out of the storm yet with inflation still well above the target levels. The Fed did not raise rates in their latest meeting as expected but could still raise them again in the future.

Via Barchart

Drought Monitor

The drought monitors below show the change in drought conditions over the last 2 weeks.

Podcast

With every new year, there are new opportunities, and there’s no better time to dive deeply into the stock market and tax-saving strategies for 2023 than now. In our latest episode of the Hedged Edge, we’re joined by Tim Webb, Chief Investment Officer and Managing Partner from our sister company, RCM Wealth Advisors. Tim is no stranger to advising institutions and agribusinesses where he has been implementing no-nonsense financial planning strategies and market investment disciplines to help Clients build and maintain wealth and reach financial goals since

Inside this jam-packed session, we’re taking a break from commodities, and talking about the world of equities, interest rates, tax savings, and business planning strategies. Plus, Jeff and Tim delve into a variety of topics like:

  • The current state of the markets within the wealth management industry
  • Is there a beacon of hope, or is it all doom and gloom for the markets?
  • Other strategies to think about outside of the stock market and so much more!

 

Via Barchart.com

 

Contact an Ag Specialist Today

Whether you’re a producer, end-user, commercial operator, RCM AG Services helps protect revenues and control costs through its suite of hedging tools and network of buyers/sellers — Contact Ag Specialist Brady Lawrence today at 312-858-4049 or [email protected].

 

09 Jun 2023

Ag Market Update: June USDA Report Overview

22/23 US Corn Stocks:  1.452 BBU (1.449 BBU Est)

22/23 World Corn Stocks:  297.60 MMT (297.66 MMT Est)

23/24 US Ending Stocks:  2.257 BBU (2.254 BBU Est)

23/24 World Ending Stocks: 314.00 MMT (313.40 MMT Est)

22/23 Brazil/ARG Corn Prod: 167.00 MMT (166.67 Est)

World corn stocks look to grow a lot year over year with expected economic slowdowns dragging on consumption. The USDA left production estimates unchanged, while this is not surprising for the June report, the weather will need to start helping or we should see a drop in next month’s report. The EU and GFS weather models continue to be inconsistent for the next two weeks. The USDA lowered Argentina’s production from last month but raised Brazil’s.

 

22/23 US Bean Stocks:  230 MBU (223 MBU Est)

22/23 World Bean Stocks:  101.30 MMT (100.55 MMT Est)

23/24 US Ending Stocks:  350 MBU (345 MBU Est)

23/24 World Ending Stocks:  123.30 MMT (121.99 MMT Est)

22/23 Brazil/ARG Bean Prod: 181.00 MMT (180.16 Est)

The USDA kept the US production the same while lowering exports, which leads to a big jump in US ending stocks. Crush margins should keep supporting beans, as weather is not a major factor, yet, to worry about. Like corn, the drop in Argentina’s bean crop was partially offset by Brazil’s gains.

 

22/23 US Wheat Stocks:  598 MBU (606 MBU Est)

22/23 World Wheat Stocks:  266.70 MMT (266.58 MMT Est)

23/24 US Wheat Stocks:  562 MBU (569 MBU Est)

23/24 World Ending Stocks:  270.70 MMT (264.65 MMT Est)

2023 US All Wheat Production:  1.665 MBU (1.672 MBU Est)

The USDA forecasted wheat world ending stocks to grow more than expected with higher stock in Russia, India Ukraine and the EU all revising higher. The US ending stocks were raised with a raise in US production as well. Wheat will continue to keep its eyes on the Black Sea, which as we have learned can be unpredictable.

 

Overview:

Business as usual with no big surprises in the June report as the USDA left US production estimates untouched. The USDA also left Chinese imports the same with 23 million tons or corn and 100 million tons of beans. The lack of any major news in the report was expected but the lack of any real bearish surprises was welcome. As it starts to heat up many areas will still be looking for rain, especially in the WCB that was lacking subsoil moisture to begin with. Forecasts will be the most watched thing moving forward as the inconsistencies in models does little to ameliorate any concerns.

 

December 2023 – Corn

November 2023 – Beans

July 2023 – Wheat

Via Barchart

Contact an Ag Specialist Today

Whether you’re a producer, end-user, commercial operator, RCM AG Services helps protect revenues and control costs through its suite of hedging tools and network of buyers/sellers — Contact Ag Specialist Brady Lawrence today at 312-858-4049 or [email protected].

26 May 2023

AG MARKET UPDATE: MAY 15 – 26

Corn had its best 2 week stretch in quite a while. As you can see from the chart below this has been the first meaningful rally, we have seen in 2023. As corn planting was 81% complete to start the week, ahead of the average pace, the trade has started to look at the weather outlook as we head into June. A dry pattern has begun forming in the coming weeks as it begins to warm up across the corn belt. While the heat in June is not overly worrisome it will be important to keep an eye on it as a warm dry June, followed by a hot dry July, could be plenty to do some serious damage to the US crop. We are a long way from this becoming a reality but a few weeks of dry heat to start June could help this rally keep some momentum or at least not give back the recent gains. Exports continue to be disappointing, and the extension of the Black Sea grain corridor isn’t bullish, but as usual the focus will be on final planted acres and weather in the coming weeks.

Via Barchart

Soybeans can’t get any momentum as South American beans continue to be the preferred option in the world market. November futures made a new low this week before getting a modest bounce on Friday heading into the long weekend. As demand continues to struggle the USDA will likely continue to trim exports in the next report, which will add to ending stocks for 22/23. Beans were 66% planted, ahead of the average pace, as weather concerns won’t hit the soybean market just yet. Beans are lacking any bullish news as they wait for a spark but struggle to find where it will come from.

Via Barchart

Cotton had a volatile week as seen in the chart below. When these opportunities present themselves, you do not want to miss the opportunity to hedge your risk. Have a plan and be prepared if there is another 5-cent spike that could make a big difference in your bottom line and potentially a good spot to place a hedge. The 78-84 cent range of Dec 2023 cotton has been consistent with pops to the upside and dips back to the bottom. The world economic outlook and US weather will be the main drivers moving forward into the long weekend.

Via Barchart

Equity Markets

The equity markets continue their mixed run of late with the DJI continuing to struggle while the S&P and NASDAQ stocks see gains. NVIDIA was the big winner of the week as chips and AI have investors’ focus. While the jury is still out on Artificial Intelligence and what role it will play in the coming years, one thing is clear, investors don’t want to miss the boat even though we do not know if the boat is the Titanic or the USS Missouri.

Via Barchart

Drought Monitor

The drought monitor below shows the struggles in the weestern corn belt as the eastern corn belt is in good shape as planting wraps up.

Podcast

With every new year, there are new opportunities, and there’s no better time to dive deeply into the stock market and tax-saving strategies for 2023 than now. In our latest episode of the Hedged Edge, we’re joined by Tim Webb, Chief Investment Officer and Managing Partner from our sister company, RCM Wealth Advisors. Tim is no stranger to advising institutions and agribusinesses where he has been implementing no-nonsense financial planning strategies and market investment disciplines to help Clients build and maintain wealth and reach financial goals since

Inside this jam-packed session, we’re taking a break from commodities, and talking about the world of equities, interest rates, tax savings, and business planning strategies. Plus, Jeff and Tim delve into a variety of topics like:

  • The current state of the markets within the wealth management industry
  • Is there a beacon of hope, or is it all doom and gloom for the markets?
  • Other strategies to think about outside of the stock market and so much more!

 

Via Barchart.com

 

Contact an Ag Specialist Today

Whether you’re a producer, end-user, commercial operator, RCM AG Services helps protect revenues and control costs through its suite of hedging tools and network of buyers/sellers — Contact Ag Specialist Brady Lawrence today at 312-858-4049 or [email protected].