RCM Ag Services

Category: Education

15 Sep 2025
Agriculture, CME, Corn, Dow Jones, Education, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: AUGUST 29 – SEPTEMBER 12

Corn continued to move higher off last month’s lows following the September USDA Report. Most of the numbers came in along estimates but they increased planted acreage 1.4 million acres. This brings the US corn crop to 98.7 million acres, a new record. With about 90 million acres expected to be harvested, we will harvest 7 million more acres this year than in 2024, which equates to about 2 billion bushels larger crop than last year. Despite the added acreage corn bounced post report as weather issues, a dry finish, and disease pressure have caused speculation on the real size of this crop. As harvest gets rolling we will learn more about this crop.

Via Barchart

The USDA Report did not have any surprises for beans as most numbers were close to estimates, but the report could be viewed as slightly bearish. To get beans moving higher, China needs to show up as a buyer and trade talks with China need to make progress. China and the US are reportedly close to a deal over Tik Tok which can hopefully build some momentum for progress between the two countries. The size of the soybean crop, like corn, has been hurt by lack of rains down the home stretch but with the solid start the end result is still in question as harvest rolls.

Via Barchart

Equity Markets

Equity markets continue to make new highs with the Federal Reserve expected to start cuts this month. With the downward revision of 911,000 jobs from March ‘24 to March ’25 the labor market weakness gives the Fed some ammunition to lower rates with unemployment being one of their mandates.

Via Barchart

Other News

  • Secretary Rollins is in the process of looking into payments to farmers for this year with the low prices.
  • The wheat numbers were actually a bit supportive but lower world cash prices (Black Sea mainly) continue to plague prices. Wheat will remain an anchor for any potential corn rally as more wheat will be swapped in for corn in feed. Prices are back testing the 5 ½ year Covid lows.

Drought Monitor

Here is the most recent drought monitor as harvest begins.

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 blawrence@rcmam.com.

Check it Out:

Bulls, Bears, and Beef: Risk Management When Prices Run Hot

02 Sep 2025
Agriculture, CME, Education, Futures, Hedging, Housing, Lumber, Market Commentary, Market Updates, Research, Risk Management, Weekly Prices rcmagserv 0 comment

LEONARD LUMBER REPORT: I have to start with the chart. It helps to clarify the argument that the mills’ added variable costs are of little relevance to the market

The Lumber Market:

I have to start with the chart. It helps to clarify the argument that the mills’ added variable costs are of little relevance to the market. That said, it did cause waves. The market bottomed in July of 2024 after Biden dropped out. It rallied up until the tariffs were put on hold, fell, and then rebounded into the duties. The argument today states that the flat demand warrants the market to test the low again. After Friday’s disappointing trade, it could be possible. Outside influences have moved the market higher since July 2024. We could return to the mean, but that is unlikely. What is likely is a 61% retracement of the move back to $525. That is based on the Sept contract. The cash market has not found a foothold yet. A $20 break in futures is nothing. Market indicators:

We remain a very efficient supply and demand market. Outside variables, while catching some momentum, do not change dynamics. Today, we have a macro issue. Stocks are too high for the pending increase in unemployment. Regional decreases in building activity can’t be picked up. And the last issue, and maybe the most important, is that a home is not affordable today. We keep putting lipstick on a pig, but housing is not affordable.

Note:

I like to mention the retirement of an outstanding person once in a while. Today I want to offer my congratulations to Jack Stevenson. We go back to the Tim Stock days. He finished up with USLBM. Great character and great market knowledge! Enjoy!!

Daily Bulletin:
Southern Yellow Pine:
The Commitment of Traders:
About the Leonard Report:
The Leonard Lumber Report is a column that focuses on the lumber futures market’s highs and lows and everything else in between. Our very own, Brian Leonard, risk analyst, will provide weekly commentary on the industry’s wood product sectors.
Brian Leonard 

bleonard@rcmam.com
312-761-263
18 Aug 2025
Agriculture, CME, Education, Futures, Housing, Lumber, Market Commentary, Market Updates, Research, Risk Management, Weekly Prices rcmagserv 0 comment

LEONARD LUMBER REPORT: The feature of the week was the extreme down move between Monday and Wednesday

The Lumber Market:

The feature of the week was the extreme down move between Monday and Wednesday. Sept futures dropped almost $46 in three days. At the same time, the open interest was rapidly decreasing. It was all liquidation. The longs were selling, the algo was selling, and the industry was buying their shorts back. The algo doesn’t accumulate a position, so it was all sides of the trade exiting. The Commitment of Traders report showed a sharp drop in the industry shorts. After nine sessions of selling, futures caught a breather on Thursday and returned to the sedate mode on Friday. At this point, the market needs a macro look now that most of the noise is behind us. The following points are key:

It’s a tough call here. A bit of good news can pop the market, while no news erodes your inventory value. The data is neutral. I would look for a general pickup in demand or at least building going into the fourth quarter, but this outside noise never ends. Selling your cash is the best trade.

Technical:

The September futures have corrected 85% of the move. The majority of the time, if it goes 61% it goes 100%. That puts the 594.50 low as an objective. Now most are out of shorts already, so there won’t be a large volume to buy from here down. That makes least resistance down. The one caveat is that the RSI is only 20%. It needs a better correction.

Note:

Tuesday:

Starts 1.30 down from 1.32

Permits 1.39 down from 1.4

Friday: Existing a smidge higher…. more inventory, more sales.

Daily Bulletin:

https://www.cmegroup.com/daily_bulletin/current/Section23_Lumber_Options.pdf

Southern Yellow Pine:

https://www.cmegroup.com/markets/agriculture/lumber-and-softs/southern-yellow-pine.volume.html

The Commitment of Traders:

https://www.cftc.gov/dea/futures/other_lf.htm

About the Leonard Report:

The Leonard Lumber Report is a column that focuses on the lumber futures market’s highs and lows and everything else in between. Our very own, Brian Leonard, risk analyst, will provide weekly commentary on the industry’s wood product sectors.

Brian Leonard

bleonard@rcmam.com

312-761-263

14 Jul 2025
Agriculture, CME, Education, Hedging, Housing, Lumber, Market Commentary, Market Updates, Research, Risk Management, Weekly Prices rcmagserv 0 comment

LEONARD LUMBER REPORT: The September futures made a new high last week and held it

The Lumber Market:

The September futures made a new high last week and held it. It’s not the contract high, but a trend high. We are seeing a higher drift in both cash and futures as the deadlines near. The commitment of trader’s report has a big drawdown in the industry holding of both longs and shorts. We also saw a big jump in the funds long number. Industry trading doesn’t have a big effect on prices. The funds do. We will see if they continue to add or stay neutral.

I’m looking for a reactionary spike once the higher levels are announced the producers raise their prices. From there we have to determine the starting line and measure from it. For a year now, or since Wallstreet confirmed a Trump win, the market has been in an up channel. I will attach a chart of that below. Pure economics indicates possible offsets .

All this will take time. That is why we expect an early spike. From there it will come down to demand.

I struggle with the fact that the industry is bailing out of hedges both longs and shorts when directional risk is growing.

Technical:

Daily Bulletin:

https://www.cmegroup.com/daily_bulletin/current/Section23_Lumber_Options.pdf

Southern Yellow Pine:

https://www.cmegroup.com/markets/agriculture/lumber-and-softs/southern-yellow-pine.volume.html

The Commitment of Traders:

https://www.cftc.gov/dea/futures/other_lf.htm

 

About the Leonard Report:

The Leonard Lumber Report is a column that focuses on the lumber futures market’s highs and lows and everything else in between. Our very own, Brian Leonard, risk analyst, will provide weekly commentary on the industry’s wood product sectors.

Brian Leonard

bleonard@rcmam.com

312-761-263

29 Apr 2025
Agriculture, CME, Corn, Education, Futures, Grain, Hedging, Market Commentary, Market Updates, Other News, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: APRIL 14 – 29

Over the past two weeks, corn futures have experienced significant volatility, primarily from trade policy developments and supply and demand dynamics. In early April, the market faced pressure as the U.S. implemented tariffs on imports from Canada, Mexico, and China, prompting retaliatory measures, including a 15% tariff on U.S. corn by China. This escalation raised concerns about reduced export demand, leading to a sell-off in corn futures. However, the market rebounded when President Trump announced a delay in the implementation of tariffs on Mexican goods, alleviating fears of diminished demand from Mexico, the largest importer of U.S. corn. The market has tight US and global supplies with the recent USDA revisions resulting in a stocks-to-use ratio of 9.6%, the lowest in 3 years. South American weather remains non-threatening and US planting continues to make progress with many areas ready to get rolling in May.

Via Barchart

Soybeans have also faced sharp swings in the past two weeks, driven by global trade tensions, weather and repositioning. China’s retaliatory tariffs on US beans lead to a big drop in US exports, at the same time Brazil’s exports to China surged. Weather in some areas of Brazil has raised some concerns about a potential dip in yield but another record crop is still expected. Spec traders have started positioning a small long position after it has been beaten down so much they are hoping for a rally that could come with any US issues with planting or lower planted acres.

Via Barchart

Equity Markets

Markets have seen wild volatility this month but have calmed lately as the S&P 500 tries to hold above 5,500, a point many saw as resistance. While trade negotiations on tariffs continue with the world the market needs a stream of announcements that progress is being made as the 90-day delay will get here very quickly.

Via Barchart

Other News

  • Global wheat supplies face potential tightening through next year due to lower production in the Black Sea as the Russia Ukraine war continues on.
  • Cattle prices continue to record highs as the US headcount is the lowest level since 1951.

Drought Monitor

As planting approaches here is the most recent drought monitor.

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 blawrence@rcmam.com.

14 Apr 2025
Agriculture, CME, Corn, Education, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: MARCH 31 – APRIL 14

Old crop corn has had a strong rally over the last 2 weeks, having a 40 cent rally after trading relatively flat since its 80 cent pullback in February. While markets were rallying before President Trump’s announcement of a 90 day pause on tariffs, they liked that news to push higher. Any positive news about negotiations with Mexico would be great for corn. The April 10th crop report cut old crop stocks more than expected on increased exports by 100 million bushels, but a modest 25-million-bushel demand cut to US feed demand. US planting should accelerate this week as weather is favorable and where planting hasn’t started allow for field work to get done. Weather during planting will be the main factor if we end up having 95-96 million acres of corn planted.

Via Barchart

Soybeans have also benefited from the recent rally corn has. While the rally may be losing steam until we have a better idea on how many acres will actually be planted in the US, new crop’s rally above the 20, 50 and 100 day moving averages provides some support under a volatile market. China continuing buying beans will be important as any mass cancelations will signal trade issues in Washington. As trade negotiations continue it will be important for small wins for the ag sector in all of them who are currently buyers.

Via Barchart

Equity Markets

“Liberation Day” created sharp market selloff with the White House announcing a delay to the tariffs a week later as countries came forward wanting to negotiate. The markets are well off their highs from February as well off their lows from the post tariff announcement. As the market is in flux as they try to get a feel for what could come next for the economy (recession?) or what comes with these negotiations and China, volatility will likely remain on any headline news.

Via Barchart

Other News

  • Any progress in trade agreements with Mexico could be good for corn prices as they are our largest buyer. China needs to continue buying beans and any trade progress with them would help beans.

 

Drought Monitor

As planting approaches here is the most recent drought monitor.

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 blawrence@rcmam.com.

24 Feb 2025
Agriculture, CME, Education, Futures, Hedging, Housing, Lumber, Market Commentary, Market Updates, Research, Risk Management, Weekly Prices rcmagserv 0 comment

LEONARD LUMBER REPORT: The futures market continued to rally last week

The Lumber Market:

The futures market continued to rally last week. This time, the driver was the fund liquidating shorts. Two weeks ago, it was a substantial cash trade. Last week, it was the roll and liquidation. The cash trade was good last week, but the futures trade was all fund related. On Friday, a mill went off the market, which resulted in nary a ripple in futures. At this point, we need a third catalyst to help the market higher.

Factors to watch:

  • A slowing Euro supply

  • Quota information (If the producers get the funds back as usual, this is only a forced savings account and should not be added to the final cost.)

  • I’m not sure, but I think we went through a day or two without the President calling out lumber. At some point, you will have too much wood or not enough. Those with too much wood can hedge at a premium and wait it out. Those who do not have enough should go back to the old-fashioned way of buying deeply discounted items and running with those until the smoke clears.

  • Spring… misery loves company, so any consistent warm weather will wake the stragglers up. ( This is not a market factor. Anytime we went into spring bullish, we would find the wood was already bought and delivered.)

 

Technical:

The market broke out to the upside of the wedge, which measures $648. I am still in the camp where the market is headed. The issue developing is that this week’s trade shows up on the charts as a big negative. Lumber historically doesn’t creep higher and then explode up. It tends to trade sharply lower for a day or two. Fund liquidation won’t get the market to $648. Adding new shorts will.

If the market sentiment, which is about 95% bullish, can turn down, some higher levels will be hit.

Daily Bulletin:
The Commitment of Traders:
About the Leonard Report:
The Leonard Lumber Report is a column that focuses on the lumber futures market’s highs and lows and everything else in between. Our very own, Brian Leonard, risk analyst, will provide weekly commentary on the industry’s wood product sectors. 

Brian Leonard

bleonard@rcmam.com

312-761-2636

17 Feb 2025
Agriculture, CME, Corn, Education, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: JANUARY 27 – FEBRUARY 14

Corn rode the wave higher following the updated USDA numbers in the January report with old crop prices settling into a range and 2025 steadily moving higher. The funds are long 1.8 billion bushels and staying long which is helping this market higher with the general fear being a huge corn acreage number for this year that could present a problem. South American weather remains consistent with non-threatening forecasts while the US has a striking cold few days coming. There are multiple items supporting a continued grind higher from here, but funds have their hand on the scale so keeping an eye on what they do and what the technicals are saying will be important as well as harvest data out of South America. It is never too early to look at making sales for the 2025 crop year once you know your breakeven. You can always look at re-owning it on paper if the market really makes moves higher.

Via Barchart

Soybeans have been trading flat since the January USDA Report bump. South America’s record crop present price challenges to the US as we are not the main supplier for the world anymore. A renewed trade war with China would certainly have negative effects again on the soybean market. South America yield numbers and any tariff wars will be the main news in the market until planting begins. Beans inability to continue the rally like corn is not surprising but the corn-bean price ratio that we are seeing is going to make for some interesting conversations when planting is decided.

Via Barchart

Equity Markets

The equity markets have been volatile as we start the year with the Magnificent 7 taking a break while managers repositioning for expected moves (or lack thereof) from the Fed. With the constant talk of tariffs and then delays to implementation, it provides a volatile market within different sectors.

Via Barchart

Other News

  • Wheat has moved higher recently with record cold weather and winterkill concern driving it to a technical breakout.
  • Livestock prices have pulled back this month but are still at strong prices as the head count in the US remains on the small side.
  • Tariff announcements remain at the top of mind of the markets as uncertainty is the main issue with no clear guidance and kicking the can down the road.

Drought Monitor

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 blawrence@rcmam.com.

 

27 Jan 2025
Agriculture, Corn, Cotton, Education, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Uncategorized, USDA Report, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: DECEMBER 10 – JANUARY 25

A lot has happened in the corn market since our last update, from a new administration taking office to a surprise USDA report. The final yield and stocks for 2024 came in well lower than previous USDA estimates leading to a solid rally for a market that needed it. The USDA lowered the final average yield to 179.3 bu/ac, down from their estimate of 183.1 bu/ac in November. The market had been priced in for a 182+ yield so as you can see in the chart below the market responded appropriately. The market popped higher to reach new 6-month highs following the report and has continued higher with funds having long positions in the market.

Via Barchart

Soybeans’ also got a bump following the January USDA report. The USDA lowered the US crop from 51.7 bu/ac in November to 50.7. The yield cuts worked through to ending stocks but did not completely match as demand numbers were slightly trimmed with harvested acres raised. The Biden administration did not help out the SAF industry on their way out as bean crush plants remain in limbo on its future as a less eco friendly Trump administration takes over. What was projected to be a huge win for soybean growers now is a cloud that you do not know how long it hangs around before it rains. South America’s yields were barely changed with their forecasts now the most important thing to the markets (outside of President Trump starting any trade wars).

Via Barchart

Equity Markets

The equity markets have had a volatile end to 2024 and start of 2025 but overall seem to be in a good place as Q4 earnings start to come in. A wave went through the market with Chinese DeepSeek coming out with an opensource AI model that is much cheaper than anything in the US. This caused tech stocks to plummet to start the week with Nvidia losing over 15%. With no immediate tariff action by the Trump administration the market sighed some relief as this administration appears to be taking a more measured approach than in President Trump’s previous term.

Via Barchart

Other News

  • The USDA’s revisions lower were both surprising in a positive way and frustrating how they were so wrong on the data the market traded for the last few months when farmers had to sell.
  • The Trump administration had their first spat over deporting illegal immigrants with Colombia president Petro while mutually threatening tariffs over the handling of the situation.

Drought Monitor

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 blawrence@rcmam.com.

 

23 Dec 2024
Agriculture, CME, Education, Futures, Hedging, Housing, Lumber, Market Commentary, Market Updates, Research, Risk Management, Weekly Prices rcmagserv 0 comment

LEONARD LUMBER REPORT: A FLARE FOR THE DRAMATICS

Recap:

” A flare for the dramatics.” That’s how the market was described last week. It was meant for futures but can be easily fit the cash trade most of the year. Here all in or all out mentality drives prices more than supply and demand. The fact that this commodity has been in a range now for over 2 years, but the trade can get chopped up, shows us just how difficult this market is to navigate. At the end of the day, the price always represents value. The main takeaway from last week was that this market is working to redefine the trading range higher. If you look back over the past few weeks, many cash items were back near their lows. That’s not a consolidation higher, but it’s not a confirmation of value. The futures market better defines the overall market as it is a broader indicator of prices and attitudes. Last week we saw a rally of about $40. Yes, it was all in one day and actually all in a matter of minutes, but the fact that it didn’t give it all back tells us that the value area is higher. If all economics remain the same the market has suggested the new value area to be $560 up from $520. The buy zone has moved up. The sell is the premium offered when out of line.

Technical:

It’s hard to find a mirror today’s chart pattern in any markets. The looming gap down to $540 will keep most technicians out of the market. The idea mentioned above of a new value area and how this market trades technically are opposites this week.

The roll has allowed a long algo to trade again. That will be the key to direction this week. That said, with rising open interest in the commercial longs and in the fund shorts, I’m worried more about the downside more than the upside during the holidays. Again, the roll will bring in buying. The best trade of the week is to shut off the computer and come back on January 6th.

Daily Bulletin:
The Commitment of Traders:
About the Leonard Report:
The Leonard Lumber Report is a column that focuses on the lumber futures market’s highs and lows and everything else in between. Our very own, Brian Leonard, risk analyst, will provide weekly commentary on the industry’s wood product sectors. 

Brian Leonard

bleonard@rcmam.com

312-761-2636

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.