RCM Ag Services

Category: Dow Jones

17 Jul 2020
Agriculture, Corn, Dow Jones, Other News, Soybeans, Wheat rcmagserv 0 comment

Ag Markets Update: July 11 – 17

Despite one of the largest single export sales to China ever, prices for the week fell. After some welcome rains in the past week in areas that were dry, favorable outlook during pollination has the potential to help make this crop large. Ultimately, as yield potential continues to look high, big bumps in corn are looking slim unless there is a surprise in forecast changes or export sales. The crop conditions continue to look strong as you can see in the chart below. We are not near/at record conditions, but still have very strong numbers at this point in the year. A dip in condition would factor into price movement as well, but don’t don’t plan on that for a big boost towards the end of the month.


Soybeans had a flat week price-wise as steady sales continued to China and forecasts didn’t change too drastically. We started out the week with some prices drops, but a solid midweek bounce helped get back to flat as we head into the weekend. Look for any big forecast changes or unexpected purchases to be the only thing to move bean prices in the near future. As world demand has seen an uptick, the U.S. may find more buyers as South America has been so busy selling up to this point, they may have trouble fulfilling any additional large exports.

 

Large purchases from China gave Wheat a big boost halfway into the week. Wheat did have to give a good chunk of that boost back the following day due to a lack of confirmation on purchases, but any Chinese purchases at this point are beneficial to the markets as other Wheat growing countries are seeing lower yield numbers. As you can see below, markets are well off the lows that we set a few weeks back as Wheat has made a solid rebound. Just like with Soybeans, more confirmed purchases, or any purchases for that matter, would be beneficial to U.S. Wheat.

 

Dow Jones
The Dow saw positive numbers overall for the week with a few days of solid gains and small losses. Americans continue to keep their eyes on places that are reopening and spikes in major metropolitan areas. Retail spending was up +7.5% last month, but some experts think we may see that shrink as some states have rolled back their opening phases where cases have spiked. President Trump wants schools to open this fall as he sees that as a way to get more people back to work, so the rolling out of back-to-school plans be an important factor on the economy heading into election times.

10 Jul 2020
Agriculture, Corn, Dow Jones, Lumber, Market Updates, Soybeans, Wheat rcmagserv 0 comment

Ag Markets Update: July 4 – 10


Corn had a choppy week only to end $0.09 lower after last week’s shockingly bullish USDA report. The main price mover this week was the uncertainty in the weather outlook. The weather post July 15th has been in limbo of hot and dry or cooler with some rain. Hot and dry would hurt the crop for the long run lowering yield, which is when we saw the prices rise on certain days. The post July 15th to August 1st period is very important to keep an eye on moving forward as the weather will be the key mover and the August 10th USDA report is worth keeping an eye on. The eastern corn belt looks to have extreme heat and dryness over the next week after a round of rain earlier this week…but let’s be honest, the weather man is only right 10% of the time = changes to the forecast are expected and prices will react.

“Supply side for corn ad beans adjusted due to the changes in planted area, so nothing too exciting there. But corn demand got cut quite a bit. Even so, the ending stocks are below trade expectations,” Scoville says (agriculture.com)

 


Soybeans had a similar week to corn with some up and down price movement after the rally last week. The hotter and drier outlook in parts of the Midwest will have an adverse effect on the crop like it will for corn. The lack of sales to China is are still holding back the market as Phase 1 continues to trail behind trade goals. Like corn, keep an eye on weather moving forward but as mentioned before. And big purchases from China would be a promising sign, but it doesn’t seem like that’s bound to happen any time soon:

Meanwhile, trade relations between the U.S. and China remain relatively frosty. President Donald Trump noted earlier today that relations are “severely damaged” after each has accused the other of mishandling the coronavirus pandemic. Trump indicated a planned phase-two trade agreement is still on the table but is not a priority right now. (farmprogress.com)

 


Wheat got a boost this week (+$0.42) as Russia and Europe’s wheat crops look to come in well below pre-harvest estimates. Low harvest numbers from the rest of the world is bullish for U.S. wheat prices as our growing season continues. This boost is very welcome following the last few months of declining prices. The markets will keep an eye on Russia and Europe as they progress through harvest.

 

Via Barchart


Dow Jones
The Dow continues to move on any news related to COVID-19. A lot of uncertainty hangs over the U.S. and the markets as spikes in cases continues around the country. An important thing to keep an eye on for the markets will be what schools decide to do in the fall, as going back to school is being used as a tool to also try and continue to reopen the economy.

Lumber
September lumber futures reached a multi-year high this week and are now up +82% from their April multi-year low. The best way to sum up the market place is by watching it print. It was up $48 – $498 since Wednesday. There isn’t enough wood to supply the needs, and mills are raising prices at will. It is a market squeeze that only ends once the pipeline is filling or prices shut down purchase order books.

Disclaimer

RCM Ag Services is a registered DBA of Reliance Capital Markets II LLC. Trading futures, options on futures, and retail off-exchange foreign currency transactions are complex and involve substantial risk of loss and are not suitable for all investors. Loss-limiting strategies such as stop loss orders may not be effective because market conditions or technological issues may make it impossible to execute such orders. Likewise, strategies using combinations of options and/or futures positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. There are no guarantees of profit. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources. You may lose all or more than your initial investment. You should not rely on any of the information herein as a substitute for the exercise of your own skill and judgment in making such a decision on the appropriateness of such investments. Opinions, market data and recommendations are subject to change without notice. Reliance Capital Markets II LLC shall not be held responsible for any actions taken based on this website or attached links. Parties acting on this electronic communication are responsible for their own actions. Past performance is not necessarily indicative of future results.