RCM Ag Services

Category: Futures

11 Aug 2025
Agriculture, CME, Futures, Housing, Lumber, Market Commentary, Market Updates, Research, Risk Management, Weekly Prices rcmagserv 0 comment

LEONARD LUMBER REPORT: “Canadian producers get bailed out.”

The Lumber Market:

“Canadian producers get bailed out.” That should be the feature of the week. It nullified the reason for the upside premium futures were carrying by eliminating the shutdown risk. It also brought to light the amount of extra wood that is out there. Now I will say the industry has done a good job hedging it. The commercial shorts jumped 1088 last week to 7227. There was more added from Tuesday on. We could be sitting at 1800 to 2000 cars hedged today. That’s high. It also will limit the downside at some point. Those hedges take the cash wood off the market. Theoretically, once futures close into par levels those hedges will unwind.

This week we will see a different trade focus. After losing $43 in futures last week, we will start to look for either bottoming indicators or a flush. I would have bet last Monday that neither would have been in today’s comments. The problem with this run up has been all speculative at a time when OSB and SYP could find support. This week we have to look at the macro market for the next move. I’m just not seeing the appetite to add to the pile. We expected a two- or three-week downturn going into fall. That could have just started.

The mills have looked to print to cover the duties, any tariffs with an added profit on top. With the current demand, I’m not sure print can continue to be so far off. The question becomes if the market makes them give it back?

Technical:

The chart pattern is closing in on a trendline, the 200-day moving average and a gap. With a 31% RSI, I can’t look for this to act as any real support. A flush is defined as “emptying something out.” That is how the lumber market recalibrates itself, which never gives the common trader a chance to participate. The major support area is 620.10. That is the flush. Without outside help it will be tough to get there.

What could be changing is… The spread normally goes out towards expiration as the longs are the ones exiting. With the now large number of shorts, we have to watch how that liquidates. If we are sitting on September 1st with heavy open interest, the front spread may actually go in.

 

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

04 Aug 2025
Agriculture, CME, Corn, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, U.S. Dollar, USDA Report, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: JULY 18 – AUGUST 4

Corn prices have drifted lower since Mid-July with no major weather issues and no major trade deal news. The corn crop ratings remain strong with about 73% of the US crop rated good/excellent and slking and dough formation ahead of average. Exports have slowed and funds have kept their short position about even last week. With the recent heat dissipating giving way to a cooler week, this crop has not been made yet but has not faced any prolonged growth challenges which continues to fuel the estimates into the 184-185 bu/acre. While this will be an impressive crop, from talking to growers across the country there are trouble spots due to disease and timing of rains which would help us get back to the low 180s which would give the market a bump. The market has been limping lower and will likely continue until something in the news cycle changes.

Via Barchart

Soybeans have struggled lately as there has not been any news to boost the market. Exports this week were better but until China shows up as a buyer the demand for US beans is struggling on the global market. South America had a strong crop giving China more supply to buy so China may not show up until they have to unless prices fall enough to make them step in. Crop ratings remain strong, but the next month of rain will be important for pod filling and to get the crop across the finish line.

Via Barchart

Equity Markets

Equity markets continued to reach new highs before a sizeable pullback to end last week with the news of Trump firing the head of the BLS. AI and tech names continue to lead the way. Magnificent 7 stocks have had mixed reactions to earnings but nobody is sounding the alarm yet about tariffs as guidance remains steady.

Via Barchart

Other News

  • Wheat has limped lower with corn and beans but saw good exports this week amid Ukraine’s sluggish exports.
  • The USD has strengthened in the last week but is still well below its year high. Historically this would have been supportive of agriculture exports but there are other factors in play this year.
  • The August WASDE report should provide some clarity and at least provide some new news for the market to digest and trade on for a bit.

 

Drought Monitor

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.

 

04 Aug 2025
Agriculture, CME, Futures, Housing, Lumber, Market Commentary, Market Updates, Research, Risk Management, Weekly Prices rcmagserv 0 comment

LEONARD LUMBER REPORT: IT IS 2 DOWN AND 1 TO GO

The Lumber Market:

It is 2 down and 1 to go. With the ADD and tariff day now out of the way all we have to contend with is the CVD at the end of the week. After that we have to live with a weakening jobs outlook and steady inflation. Prices won’t stay up here once the news cycle is over. There is no economic value up here. We are up here because of the risk of a major supply disruption. That is still a feature, but the timing seems to be further out. In the short run mills are coming back online after the summer shutdowns. The bottom line is that no one expected business to be this slow at this point. The market will need to correct after all the noise lets up. What announcements that come out could temper that sell off.

The mills do not have files. Why they wouldn’t sell the futures market at a good profit will always be a wonder. The industry does have inventory but that is slowly getting hedged. The one up factor in the market is that the funds are adding to their long position.

Technical:

It took until last Friday to finally close the gap in September. We talked about the gap back in early May. Things are back to slow and rough. It will now take a few years to get that new truck. This has been a perfect stair step higher market. It takes time and suffers setbacks. Presently there are no technical sign to call the cycle over. It does call for a correction. Momentum still points to hitting or taking out the high of 714.50.

Here is the trader’s fact sheet.

***Lock in the substantial profits offered and tell treasury to make the margin calls.

 

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

28 Jul 2025
Agriculture, CME, Futures, Housing, Lumber, Market Commentary, Market Updates, Research, Risk Management, Weekly Prices rcmagserv 0 comment

THE LEONARD LUMBER REPORT: The lumber industry is very efficient

The Lumber Market:

The lumber industry is very efficient. Supply can be added or reduce in days or weeks. That is why it is so difficult to gauge a supply driven market in lumber. The good news is that the cycles have definition. At the beginning of the year, it was a panic element throughout the industry with the pending duties and a tariff. The current rally is driven by a possible supply disruption. The next phases of the cycle are:

In these circumstances the market historically fails because of market efficiencies. It finds enough wood because demand is flat. I would caution anyone who believes the market is going back to the lows on this one. We’ve been saying for a few years that value is somewhat higher than the norm.

The duty numbers run from 10% to 35%. Today we heard the deal with European will add 15% to their costs. Prices are going up. The issue in futures is continuing to hold a $50 or more premium you may have to be in the $700’s by Friday. I’m not seeing the appetite to run it up. We did see a big increase in the industry shorts last week. Having less wood sitting at the mills and industry inventories hedged are bullish dynamics.

Technical:

The futures market consistently traded near $675. This is an established value area. What has been a significant red flag is the fact that with some much-forced price appreciation in front of us we continue to fail closing the gap. Each day we expect that area to find trading only to see the futures market take 10 minutes just to open. The lack of “volatility created” will be a factor in any run. That’s why you hedge.

 

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

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

LEONARD LUMBER REPORT: The futures continue to stair step higher on its way to a new high for the move

The Lumber Market:

The futures continue to stair step higher on its way to a new high for the move. A stair step higher marketplace is one that sees a buying push followed by a stagnant confirmation period. It tends to be the norm in a supply driven market. This one is driven by the risk of higher prices due to duties and tariffs, so you basically have to drag the buy community to the market weekly. The buy side knows that there will be higher prices, and the producers will try to pass it along.

What is interesting on this one is the fact that every aspect of the industry is running on shoestring margins. A rising price/flat demand environment is difficult to navigate. For those who have been proactive buying the deals and out of the market a week or two are now suffering sticker shock. This cycle had been set since February. Prices will go higher because of outside influences. Futures will continue up until the shorts blow out. It’s really that simple.

What this blowoff looks like is hard to define given the very light open interest overall. Most of the spec side is long and the industry shorts are basis trades. We will see what it looks like after we get there.

Back to tight margins. In the last week or so we talked about a possible increase in supply from Europe, the pacific northwest and SYP. We have been showing the data of the gains in SYP over the last few years on the spruce market. With extremely tight profit margins, the SYP alternative will continue to be embraced. It has slowly creped north up to I80. In a supply driven market, the dollar equation is king. A few dollars in cost savings win.

Technical:

The market is forming a defined wedge pattern which calls for a $70 move. 672 is the top line and 635 is the bottom. With a 61% RSI there is room in both directions. Nothing is showing up in the momentum indicators to signal a possibility of a move to that degree, but it is there. Sept futures have traded a lot of volume between $660 and $670. That seems to be the “area of acceptance” with the headwinds or(tailwinds??) in front of our market. I would expect a knee jerk reaction up with 660 now becoming an area of support replacing the area of value. This market can easily go back over $700 and then test $600. Any delay in an announcement and $600 may come first.

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 Leonardbleonard@rcmam.com

312-761-263
18 Jul 2025
Agriculture, CME, Corn, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, U.S. Dollar, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: JUNE 30 – JULY 18

Corn continues to struggle but saw a solid bounce this week after hitting new contract lows. U.S. weather has largely been non-threatening, with most areas benefiting from favorable summer conditions—though pockets of stress remain, particularly in the Southern Plains and Southwestern Corn Belt, where upcoming heat could pose challenges. In South America, Brazil’s main corn crop is estimated to be over 10% larger than last year’s. With strong production expected from both the U.S. and Brazil, the global supply glut remains a key headwind, continuing to weigh on prices over the past few months. The corn crop had a G/E rating of 74% to start the week.

Via Barchart

Soybeans, like corn, had a solid week following a recent dip. Prices have held relatively steady, trading in the $10–$11 range. Favorable U.S. weather has supported early crop development, but late-July heat could pressure some of the later-planted areas. Globally, Brazil remains on pace for a record soybean crop, while Argentina is facing some production challenges and policy-related uncertainty that has slowed farmer sales. November soybean futures ended the week just above all major moving averages (20, 50, 100, and 200-day), setting the stage for a key technical test as we head into next week. Beans had a G/E rating of 70%, better than expected.

Via Barchart

Equity Markets

Equity markets continue to push higher, setting new records as the AI trade returns to the spotlight ahead of earnings season. Meanwhile, the Trump White House is adding volatility, with markets reacting to shifting headlines around the future of Fed Chair Jerome Powell. While Powell’s position appears secure for now—at least through the next eight months—any change could rattle markets, as evidenced by the sharp reaction to a recent false report.

Via Barchart

Other News

  • The last two USDA reports lacked surprises, good or bad, which has created a trade focused on weather.
  • The USD weakness continues as it holds around 98, off the recent lows of 96 and well below the recent highs around 108.

Drought Monitor

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.

 

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

THE LEONARD LUMBER REPORT: The futures market continued its trek higher on a journey to find real price discovery

The Lumber Market:

The futures market continued its trek higher on a journey to find real price discovery. A report midweek about two SYP mills taking downtime confirmed the reality of less product in the future. But at the same time we saw more weak housing news compounding the problem. Add to it that Trump in now loading both barrels and pointing it at Canada. The possible 25% tariff just keeps showing up. What we do see is many items holding lower levels because of the lack of demand. There is no reason to wait on these items in today’s environment. As long as the industry procrastinates the more chance there is for a spike higher when the SHTF. If it turns out to be a non-event, sell the board.

Technical:

The midweek gap in September from 648.50 to 649.50 is a momentum gap. We can come back and close it early in the week making it more of the same or we can see additional momentum following it up. That would bring the 4-month gap of 673.00 to 708 into play. I do have an issue with a 76.80%. That is toppy without the momentum. I will say it could be less of a fact when we analyze the trade. The market shot up with the tariff announcements. These has been no resolution to it. Whatever the catalyst for the initial rally, a precedent was set. Any movement towards a tariff again pushes prices back up there.

This could take some time to play out. Owning cash at low levels with a good basis available has been the play for 3 years now. Today there is too much wood out there. It doesn’t mean you shouldn’t own some.

 

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

312-761-2636

30 Jun 2025
Agriculture, CME, Corn, Cotton, Futures, Grain, Hedging, Market Commentary, Market Updates, Other News, Risk Management, Soybeans, U.S. Dollar, USDA Report, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: JUNE 13 – 30

Last week was rough for commodities as corn dropped to make new contract lows in Dec ’25. The charts do not look good for corn and there is no good news to help either. There are no major weather concerns and South America is producing another record crop allowing for ample ending stocks in the world. The USDA June 30th Planted Acreage Report stated that corn has 95.203 million planted acres. This number is neutral to bearish as the market was expecting a slightly higher number but anything 95+ with the weather to this point in the year looks for a huge crop. The bears have the momentum right now but there are some trouble areas and a long summer ahead to bring the bulls some help.

Via Barchart

Soybeans gave back the recent gains as well last week before the report on June 30th. Beans will likely continue to trade in the range they have been until we receive news to direct the market either on the trade agreement side or weather. The Planted Acres report had 83.38 million acres, slightly below expectations. The tax bill going through congress right now may give beans some help by getting rid of a 45z tax credit loophole but until this thing passes everything is on the table to get cut from it. Weather is good for the next 2 weeks so the market needs positive news from a US and China trade deal to give it a boost.

Via Barchart

Equity Markets

Markets set new highs after another V shape recovery following the liberation day tariff dip. Several tech stocks have led the way outside of the Magnificent 7 as AI continues to dominate headlines with spending continuing and companies talking about how it can help improve their margins.

Via Barchart

Other News

  • Cotton acres came in higher than expected at 10.12 million acres. Cotton has been stuck below 70 cents/lb for a while and while the acreage number came in higher than expected we know there are issues with the crop and a lot of abandonment.
  • Wheat, like corn and beans, yawned at the report as the numbers were close to the average estimate with no major changes. After a mid June rally, the weakness to end the month was disappointing dropping 50 cents from the highs.
  • The weakness in the USD over the past few months will be something to keep an eye on as the year continues with it trading at levels we have not seen since early 2022.
  • Tensions in the Middle East continue despite a drawdown in aggression.

Drought Monitor

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.

 

23 Jun 2025
Agriculture, CME, Futures, Hedging, Housing, Lumber, Market Commentary, Market Updates, Research, Risk Management, Weekly Prices rcmagserv 0 comment

LEONARD LUMBER REPORT: Just when we thought we had seen it all this year, the US bombs Iran

The Lumber Market:

Just when we thought we had seen it all this year, the US bombs Iran. With that news we see the TASE at all-time highs today. If nothing else, it is weighing on the psyche of the investor. That in turn makes the big decision of home buying more difficult. And that will keep demand and building muted. So where is the risk in the next 3 months? The biggest is risk is to the producers. The Canadians will see higher costs that can’t be passed along. The US producers, especially down south, will see prices fall below breakeven. Looking at the other risk, it is on those holding jobs short. The producer side could just shut it down causing a major temporary spike in prices. The buyer could get stuck in the middle of it. It is a mess. Now as far as the middle trader goes, volatility carries a premium in markets. They should benefit.

Last week July futures were off $10.50 on a trade dominated by the roll. The market makeup has the industry getting short eating up the funds exiting. The only other feature is that the yahoo’s are getting longer. The debate is which month is better to be speculatively long. The closer July gets to no limits the less it should be traded. Time holds the answer. Once the funds are done with the July buy side there won’t be much support.

Technical:

Technically the July is still in the neutral zone while the September is rolling over. That is the opposite of what most expect. The tech read is very fragile so not much of a run up would reverse it. They whole picture holds little opportunity. Most are relying on the pending price increases forced on the Canadians.

$100 crude is not helpful.

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

312-761-2636

16 Jun 2025
Agriculture, CME, Futures, Hedging, Housing, Lumber, Market Commentary, Market Updates, Research, Risk Management, Weekly Prices rcmagserv 0 comment

LEONARD LUMBER REPORT: Futures were up $20 for the week

The Lumber Market:

Futures were up $20 for the week. It is a market doing a good job in developing price discovery in a chaos environment. Saturday, I  was asked to be on a call with an equities team who wanted to know what was causing the uptick. These guys a very inflation sensitive. I explained that between the CVD, AD and, tariffs prices from Canada will be going up. To what level remains to be seen. They were quick to point out that the US and European capacity could be increased. I pointed out that the quarters it would take to be a factor is too far off to put into a 2025 equation. What about demand? We are here because demand has been flat for 3 years. A macro look shows that we are fighting for every dollar higher as usual. July hit 710.00 back in early March. The futures market is actually near its low end of the range. We are flat. The trade today is trying to find a new equilibrium trading range. This is not a supply driven rally, at least not yet. It isn’t a demand push either. The rally is spec shorts covering and short funds covering via the roll. Nothing more, nothing less. I do see and uptick in the industry hedging up here. Good move.

Technical:

The RSI is 75.60. A grind to the next points of 642 and then 655 are in reach. Once we hit the gap we may have to take a closer look. The 200 day is at 618.50. History has shown us that this ends in a quick thud, so a risk management plans need to be in place. Just stair step in higher. There is no need to rush into it. The marketplace should drag the cash marginally higher.

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

312-761-2636

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.