Category: Livestock

30 Apr 2021

AG Market Update: April 24-30

Volatility was the name of the game this week as many days saw wide trading ranges on both sides of unchanged. Looking at the chart below you can just how wide ranges the last few days have been.  Despite the volatlity, the May contract settled squarely within the range as of Thursday.  This volatility came about as we’ve faced a short squeeze on the front month May contract.  Coming into the week, there were nearly 200,000 open contracts, as of this morning there are only 12,500 – presumably many were on the short side and needed to cover.

Regardless of what has caused the rally – higher prices is GREAT for the American Farmer!

For the July contract and new crop Dec, the markets followed the May higher this week and most April as South America’s struggles with drought conditions begin to be seen in yield estimates.  Any rain after May 10th probably won’t be able to add must help this late in the game. As expected, exports were good this week but that has become the new normal. The epanded limits coming next week along with higher prices means we should probably expect volatility to hang around.

Via Barchart

Soybeans had small gains on the week as they also traded in wide ranges in the May contract in addition to future months. The short squeeze has end users scrambling with physical delivery coming up. Along with beans rallying, we have seen basis improve in many areas as buyers try get what is left out of farmers bins. A growing consensus among traders is that continued strong US cash bids indicate that the stock numbers are lower than the USDA reports.  Will the USDA adjust in the June report is a major question?  Bean meal and oil have also rallied in the past couple weeks aiding to soybeans rise. The fundamental news around the market was less in focus this week with the May contract expiration causing for most of the volatility.

Via Barchart

Dow Jones

The Dow was up slightly on the week as more news about reopenings continue to roll in and President Biden gave his first speech to Congress. Vaccination rates continue to be strong in many cities and New York City announced this week they will lift all restrictions for reopening July 1st.

Lumber

Check out our recent post about the lumber market and what all has been going on.

Podcast

Check out or recent podcasts with guests Elaine Kub and Kyle Little. Elaine and Jeff discuss grain markets and trading grains while Kyle helps give insight into the Lumber markets and what has been going on.

https://rcmagservices.com/the-hedged-edge/

 

Other News

On Monday, daily trading limits will expand for our major markets with corn increased from 25 cents to 40 cents, beans from 70 to $1.00 and wheat from 40 to 45.  The CBOT is not tipping their hand that they expect volatility this summer, the daily limit increases are largely due to the high prices to keep daily ranges in line with historic percentages of price.

 

US Drought Monitor

The map below shows what areas are currently experiencing drought conditions across the US. Not much changed from last week. The rains in Texas will help alleviate some dryness in the area but will not solve their moisture issues. Some dryness has crept into Illinois and Indiana but nothing to worry about right now.

 

Weekly prices

Via Barchart.com

22 Feb 2021

2021 Ag Markets Outlook

2020 was a notably difficult year for commodities – oil went negative, coronavirus halted trade and decreased demand, and overall turmoil in the markets sent investors fleeing. Though the first quarter was rough, commodities did their best to rally in the last three quarters of the year and did so as well as they could. So, what of 2021? Are we going to see major rallies in the grain markets with dry weather and Chinese consumption? What about the cotton markets? Are we looking for a steady year or will cotton continue to trend down?

Because there’s so much to talk about, we’ve broken this episode down into two parts:

Part I: Cotton & Grains
In the first part, we’re joined by our Cotton expert – Ron Lawson, and our Grains expert – Jody Lawrence to talk about the outlook for these markets into 2021.

Part I Links:

 

Part II: Meats
In part II, we’re talking meats with our in-house meat specialists Tom Chaves and Kevin Bost.

Part II Links:

21 Jan 2021

Ag Markets Update: January USDA 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. Watch the whole episode below!

 

If you’d rather listen – click on the links below to find your preferred platform: