Category: Market Commentary

01 Jul 2022

AG MARKET UPDATE: JUNE 23 – JULY 1

Corn reacted negatively to the Stocks and Acreage report this week despite there not being any surprises and the numbers coming out close to pre-report estimates. Planted acres came in at 89.921 million acres (89.861 million estimate) and June 1 stocks were 4.346 billion bushels (4.343 billion estimate). The bearish news is improving weather after the 4th of July with rains expected across most of the corn belt. The concern over the wet spring causing prevent plant acres in ND and MN does not appear to have come to fruition with high prices motivating farmers to get the crop in the ground. Trading resumes Tuesday morning after the long weekend so any change in weather or world news could lead to a volatile opening after another kick in the teeth on Friday.

Via Barchart

Soybeans had a good week making solid gains before dipping after the report and then getting crushed today (Friday). The bean planted acres was 88.325 million acres (90.446 million estimate) and June 1 stocks was 971 million bushels (965 estimate). The acres number was surprising as it came in 2.121 million acres below pre-report estimates. While the favorable weather for corn is also favorable to beans, they have a different story than corn to follow. Chinese demand needs to return to the market but 2+ million acres of production is a lot to be off by. The inability for Soybeans to break out higher following the report shows that they still have a fight ahead of them and that outside market risks likely have an impact on prices. Friday’s trade hit beans hard and the long weekend holds uncertainties.

Via Barchart

Wheat moved lower on the week pre-report and continued lower after it with no surprises only to get crushed on Friday. All wheat planted acres were 47.092 million acres (47.017 million estimate) and 660 million bushels in June 1st stocks (655 million estimate). After a tough Friday, wheat has plenty of non US weather related news to follow and any developments over the 4th of July weekend will be seen on Tuesday.

Via Barchart

As you can see in the chart below cotton has had a rough 2 weeks. With demand expected to decrease with the possibility of a recession coming, this reaction is clear and puts fiber prices at the mercy of the economy’s future. The other side to this is that US production will likely be lower than expected with so much dryland in west Texas and other serious drought areas (see map below) expected to not produce a crop. Growers planted 12.5 million acres in 2022, up 11% from last year.

Via Barchart

Equity Markets

The equity markets were relatively flat on the week after a few up and down days. The market headlines keep being “market rallies as fear of recession lessens” or “market falls as recession fears remain” so the market is still looking for guidance as it continues lower. July’s news will be similar to June with inflation and the Fed being the main drivers.

Via Barchart

Drought Monitor

The drought monitor below shows where we stand week to week.

Podcast

There is an agriculture tug of war happening across the nation, impacting America’s farmland. Fertilizer prices are continuously fluctuating, and it has us taking a page the “The Clash” should we stay, or should we go?! And we aren’t the only ones. Many farmers are asking their agronomist and chemical salespeople, “what will fertilizer cost me the rest of the season, and what are my options if I don’t want to go all-in on my typical fertilizer treatment plan?”

In this episode of the Hedged Edge, we are joined by a special guest who needs no introduction in his local circle, Dick Stiltz. Dick is a 50-year veteran of the fertilizer and chemical industry and is the current Agronomy Marketing Manager of Procurement fertilizer and crop protection at Prairieland FS, Inc in Jacksonville, IL. He is at the pulse of the current struggle and here to discuss the topic at hand.

 

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 blawrence@rcmam.com.

24 Jun 2022

AG MARKET UPDATE: JUNE 9 – 23

Corn had a rough week along with the overall commodity selloff the past few days. While the weather forecast has become cooler it is still going to be hot, and a lack of rain remains across much of the corn belt for the next week with higher chances in the 2-week forecast.  Do not be mistaken – we are in a “weather market” where positions will change along with the forecasts.

Outside of weather, it has been the funds who have helped propel the move higher over the past year – naturally, when funds liquidate their large long position, you get a gut punch like we’ve seen this week.

With unknown weather, a potential recession looming, and fund profit taking the current market condition are flat out tough to speculate on and require the utmost discipline and focus on profit margin management.

The Planted Acreage and Quarterly Stocks report comes out next week followed by a 3-day weekend for the 4th of July.

Give us a call today to get your plan set for tomorrow (i.e next week!) 312-858-4049.

Via Barchart

Soybeans suffered like corn from the cooler forecast and long liquidation this week. Collapsing world veg oil prices added pressure with the forecast change. Chinese Covid lockdowns and continued political friction will be in and out of the news but will always spook the markets. Beans and corn will be weather sensitive going forward but have suffered from outside forces like potential recession and lockdowns as well. The planted acres and stocks report will be important next week as well as weather over the 3 day 4th of July weekend.

Via Barchart

Wheat suffered along with other commodities with indications that Ukraine may be able to export more wheat than originally expected (not sure if this will come to fruition as the destruction of ports and shipping paths is continuing). Russian production estimates have risen, adding to the questions about what will be produced in Russia and Ukraine to be exported. The losses in wheat in recent weeks is confusing as the US yields are not spectacular, war continuing in Ukraine, and India is still in a drought, none of these are bearish factors yet we have come well off the highs.

Via Barchart

Equity Markets

It has been a bad past couple weeks for the equity markets as they fell lower following the Fed raising rates 75 points and lots of debate of a recession in the future. While the Fed tries to make up for late moves and inflation continues to affect the country it is important to look what has gotten us here. As companies are likely to lower future earnings expectations, it will be important for markets to figure out fair value after the last 2 years of staggering valuations.

Via Barchart

Drought Monitor

The drought monitor below shows where we stand week to week.

Podcast

There is an agriculture tug of war happening across the nation, impacting America’s farmland. Fertilizer prices are continuously fluctuating, and it has us taking a page the “The Clash” should we stay, or should we go?! And we aren’t the only ones. Many farmers are asking their agronomist and chemical salespeople, “what will fertilizer cost me the rest of the season, and what are my options if I don’t want to go all-in on my typical fertilizer treatment plan?”

In this episode of the Hedged Edge, we are joined by a special guest who needs no introduction in his local circle, Dick Stiltz. Dick is a 50-year veteran of the fertilizer and chemical industry and is the current Agronomy Marketing Manager of Procurement fertilizer and crop protection at Prairieland FS, Inc in Jacksonville, IL. He is at the pulse of the current struggle and here to discuss the topic at hand.

 

 

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 blawrence@rcmam.com.

 

10 Jun 2022

AG MARKET UPDATE: JUNE 2 – 10

Corn had a good week with solid gains as there has still been no conclusive progress on an open trade corridor for Ukraine to export grain. The US weather outlook for late June remains hot and dry for many areas. While this is not too worrisome yet, if that pattern continues for the summer it could lead to the long-term weather problems the world supply does not need. The cash market remains hot with positive basis for corn pushing corn up over $8 in many areas in the corn belt. The USDA Report Friday did not include many surprises but had a reduction in old crop corn exports. This led to a rise in expected ending stocks for 22/23 to 1.400 billion bushels for the US. World supplies were risen as well on a bigger Ukraine crop expected (up 5.5 mmt from the May estimate).

Via Barchart

Soybeans had a good week with strong exports and higher bean oil prices. While there has not been much soybean specific news, the same supportive factors of the last few weeks remain. The high-pressure ridge that may move into the Midwest is providing support, like for corn, but whether that ends up happening will be a wait and see. The high crude prices will continue to help, and they may stick around for the summer as demand picks up. In Friday’s USDA report, Soybeans ending stocks were lowered to 280 million bushels for 22/23 for the US. World ending stocks were raised to 100.46 million tonnes, slightly higher than May.

Via Barchart

Equity Markets

The equity markets had been trading sideways for the last couple weeks but took it on the chin Thursday and Friday. While the market tries to pick a direction to go, the inflation number on Friday did not help as it rose to 8.6%. Markets tumbled on Thursday as the ECB said it would end asset purchases and begin to raise interest rates, pushing global bond yields higher. Hopes were that inflation had peaked, that was not the case, and the market reacted as expected to a 8.6% inflation number and record low consumer sentiment.

Via Barchart

Drought Monitor

The drought monitor below shows where we stand week to week.

Podcast

There is an agriculture tug of war happening across the nation, impacting America’s farmland. Fertilizer prices are continuously fluctuating, and it has us taking a page the “The Clash” should we stay, or should we go?! And we aren’t the only ones. Many farmers are asking their agronomist and chemical salespeople, “what will fertilizer cost me the rest of the season, and what are my options if I don’t want to go all-in on my typical fertilizer treatment plan?”

In this episode of the Hedged Edge, we are joined by a special guest who needs no introduction in his local circle, Dick Stiltz. Dick is a 50-year veteran of the fertilizer and chemical industry and is the current Agronomy Marketing Manager of Procurement fertilizer and crop protection at Prairieland FS, Inc in Jacksonville, IL. He is at the pulse of the current struggle and here to discuss the topic at hand.

 

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 blawrence@rcmam.com.

 

03 Jun 2022

AG MARKET UPDATE: MAY 26 – JUNE 2

Corn had another tough week with a couple big down days before a quiet day on Thursday. The big news this week was the rumors of talks between Russia and Turkey to discuss a safe trade passage for Ukraine to export grain. While this would be a positive for the world supply, rumors are rumors until something comes to fruition and Russia supposedly would only let that happen if they were to get economic sanctions lifted. Along with this news, corn planting was 86% complete at the start of the week following the long weekend after a few weeks of much needed catch up after the slow start. This is close to the average as parts of North Dakota and Minnesota remain slow due to weather. Eyes will now turn to the weather for this summer while keeping an eye on any further Russia and Ukraine developments.

Via Barchart

Soybeans have not seen the move down that corn and wheat have the last couple of weeks. Demand for beans remains high across many areas with meal and oil prices moving higher too. 908 million pounds of soybean oil were used to make biofuels in March, the second highest monthly total on record. Exports remain good and with July trading at a 70-cent premium to August the demand has been strong and could be interesting to see if purchases begin for coming months. Soybean planting was 66% complete to start the week, right on the average for this time of year.

Via Barchart

Wheat fell this week on similar news to corn with the rumors of Ukraine being able to export grain. With Ukraine growing more wheat than expected, this will help the world supply if they are able to export some of it. Spring wheat planting was 73% complete to start the week, while this is well below the average the progress made was much needed. Wheat will keep an eye on planting to finish up in areas that dry out and keep an eye on Russia and Turkey discussions.

Via Barchart

Equity Markets

The equity markets have had a good past few days continuing its move higher from the lows from a few weeks ago. The weaker than expected economic data may ease inflation and possibly keep the Fed from being too aggressive in tightening. While the Fed was slow to move on rates the debate about how fast they need to move higher from here continues.

Via Barchart

Drought Monitor

The drought monitor below shows where we stand week to week.

Podcast

There is an agriculture tug of war happening across the nation, impacting America’s farmland. Fertilizer prices are continuously fluctuating, and it has us taking a page the “The Clash” should we stay, or should we go?! And we aren’t the only ones. Many farmers are asking their agronomist and chemical salespeople, “what will fertilizer cost me the rest of the season, and what are my options if I don’t want to go all-in on my typical fertilizer treatment plan?”

In this episode of the Hedged Edge, we are joined by a special guest who needs no introduction in his local circle, Dick Stiltz. Dick is a 50-year veteran of the fertilizer and chemical industry and is the current Agronomy Marketing Manager of Procurement fertilizer and crop protection at Prairieland FS, Inc in Jacksonville, IL. He is at the pulse of the current struggle and here to discuss the topic at hand.

 

 

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 blawrence@rcmam.com.

 

27 May 2022

AG MARKET UPDATE: MAY 12 – 26

Corn has traded lower over the past couple of weeks as planting progress has sped up following a slow start to the planting season. While we knew the corn would get planted, the early delay was worrisome and continues to have the potential to lead to harvest yield loss. Despite the gains in many states, ND and MN are still wet and cool with no warmer weather in the forecast to help pull these areas into any form of normal pattern.

With the country wide and regional delays to planting, the latest USDA yield estimate of 177 bpa seems realistic vs the initial 181 bpa. That said, more progress will be made over the 3-day weekend as catch up is played leaving traders only guessing how the lates progress data will be reported come Tuesday. 3-day weekends tend to be unpredictable as the markets do not open until Monday night, so any weather event over the weekend followed by a shortened trading week will likely lead to continued volatility.

Via Barchart

Soybeans have bounced back the past couple of weeks as they have traded up and down since making contract highs in February. Diesel’s rally has helped beans as it increases the need for more vegetable oil in renewable diesels. Chinese demand has been quiet and their new deal with Brazil for corn could lead to friendlier trade elsewhere as well. Planting is slow but we are not late enough into the year yet to worry about yield loss, like we are with corn. More progress will be made over the long weekend and could see a volatile open Monday night as well.

Via Barchart

Crude Oil

Crude is back trading near its post invasion highs of the mid $110s while natural gas continues higher. The world energy market continues to trade higher while countries try to explore ways to ease the burden on their citizens. This problem will not be fixed anytime soon so we should expect higher prices in to the summer.

Via Barchart

Equity Markets

The equity markets saw a welcome rally this week amidst the continued bear market of the last few months. While this may just be a temporary bounce before the Fed reduces its balance sheet, it is nice to see some positive days in a row. Mixed earnings, interest rates, and the war in the Ukraine continue to dominate the story lines. Keep an eye on the big names as they will continue to decide which way the market goes.

Via Barchart

Drought Monitor

The drought monitor below shows where we stand week to week.

Podcast

There is an agriculture tug of war happening across the nation, impacting America’s farmland. Fertilizer prices are continuously fluctuating, and it has us taking a page the “The Clash” should we stay, or should we go?! And we aren’t the only ones. Many farmers are asking their agronomist and chemical salespeople, “what will fertilizer cost me the rest of the season, and what are my options if I don’t want to go all-in on my typical fertilizer treatment plan?”

In this episode of the Hedged Edge, we are joined by a special guest who needs no introduction in his local circle, Dick Stiltz. Dick is a 50-year veteran of the fertilizer and chemical industry and is the current Agronomy Marketing Manager of Procurement fertilizer and crop protection at Prairieland FS, Inc in Jacksonville, IL. He is at the pulse of the current struggle and here to discuss the topic at hand.

 

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 blawrence@rcmam.com.

13 May 2022

AG MARKET UPDATE: APRIL 28 – MAY 12

The May USDA report was mixed but the most bullish news out of it was lowering expected yield to 177 bu/acre from 181. This adjustment trumped the other numbers as US and world stocks were higher than expected. The USDA appears to think demand rationing is in the future but is also aware the late panted US crop will not achieve record yield.  The USDA did not change their estimates for Brazil’s safrinha crop, their estimates remain a few hundred million bushels over private estimates. Corn planting was seen as being 22% complete to start the week with more progress being made. The US is well behind its normal pace and there are still places that have yet to start, the longer planting drags out the lower that yield is expected to go.

Via Barchart

Soybeans have struggled the last few weeks as it has fallen to the low $16s. The USDA report was relatively neutral with a mixed bag of numbers that offset each other. They kept the US yield estimates at 51.5 bu/acre as the slow planting pace has not gotten to the end of the soybean window yet. One important thing to note is the USDA’s acreage already had a large shift to beans from corn. If the wet areas do not dry in time for corn to get in so beans get planted instead, we could see an even larger bean vs corn gap in acreage. The slower corn gets planted the more eyes will turn to soybeans and could make for an interesting year.

Via Barchart

Wheat has seen a good rally over the past 2 weeks, lead by a big day after the USDA report. World wheat supplies are at record low stocks to use ratios and moving deeper into 2022. Replacing lost Ukrainian and Russian bushels is a challenge for the USDA balance sheets. World wheat stocks are at 991 million bushels below expectations from the May report in 2021. With the continued war in Ukraine and troubles with wheat crops all over the world, including here in the US, wheat has several bullish factors behind it heading into the summer.

Via Barchart

Equity Markets

There really is not much to say as the markets continue lower with inflation posting 8.3% this week. The Fed raised rates last week another 50 points, this was expected, and the markets actually immediately responded favorably before continuing the loses of the last few months. Several rounds of earnings happened this week with few winners and Apple continues its fall as it falls below $150. Apple is always one to keep an eye on as it is no longer the most valuable company in the world. The S&P and NASDAQ are getting hit just as hard (NASDAQ the worst down over 30% from its record highs in November).

Via Barchart

Drought Monitor

The drought monitor below shows where we stand week to week.

Podcast

There is an agriculture tug of war happening across the nation, impacting America’s farmland. Fertilizer prices are continuously fluctuating, and it has us taking a page the “The Clash” should we stay or should we go?! And we aren’t the only ones. Many farmers are asking their agronomist and chemical salespeople, “what will fertilizer cost me the rest of the season, and what are my options if I don’t want to go all-in on my typical fertilizer treatment plan?”

 

In this episode of the Hedged Edge we are joined by a special guest who needs no introduction in his local circle, Dick Stiltz. Dick is a 50 year veteran of the fertilizer and chemical industry and is the current Agronomy Marketing Manager of Procurement fertilizer and crop protection at Prairieland FS, Inc in Jacksonville, IL. He is at the pulse of the current struggle and here to discuss the topic at hand.

 

 

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 blawrence@rcmam.com.

 

09 May 2022

The Leonard Lumber Report: The Fundamentals of our Market are Sound

Change for the Week:

May Futures:    1000.10 -39.60

Open Interest:   2503 -184

Commitment of Traders:   -105 industry longs -104 spec longs

The fundamentals of our market are sound. Repeat; the fundamentals are sound, and there is a strong backlog of business. More business appears every day, and the marketplace is accepting these price levels. That makes today’s market fundamentally sound. The issue is that a lot of that new business has already been bought, and there is prompt wood all over. That leads to the trade having to define its value areas. 

It is complicated to define value today. The manufacturing of this widget has too many components to peg a price to, and it wasn’t long ago we saw a survey that had 83% of respondents calling for a run back to $1,700. Today you have an industry frozen because of last Mays trade, and we end up with a sideways trade. 

The best way to judge price with so many outside issues is to look at the technical read and the trend. A picture is worth a thousand words — the futures market is in a firm channel down, and the high channel sits at $915 while the low end is at $640. This is a 3-month channel that is slow moving, and it could take a month to get to the $640 area. On the flip side, the market would need a change in dynamic to run through $914 and stay. 

Take a look at the chart below. A correction should close the gap above, which was left on Friday. If we don’t correct this by Wednesday, July may be back in the $600 quicker than most want.

 

Open Interest and Commitment of Traders

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

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

About The Leonard Report

The Leonard Lumber Report is a new 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.

29 Apr 2022

AG MARKET UPDATE: APRIL 21 – 28

Corn continues to move higher as planting has gotten off to a slow start in the US and Brazil’s safrinha crop is facing drought conditions, shrinking their crop. The wet and cool forecasts remain into May for the north and eastern corn belt which will make it unlikely to see much planting progress in those areas. The rain will be welcome in the western corn belt that has been dry and making slow progress in planting, but the rain will be welcome for the soil even if it slows planting for a day or two. The ongoing conflict in Ukraine continues to decimate their infrastructure as Russia destroys ports and has seized stored corn to sell as their own. China was a buyer of corn this week and will hopefully continue to show up on exports as demand from other buyers has slowed. Limits have been increased at the CBOT for some commodities and corn will now have a 50 cent limit starting May 1 from the current 35 cent limit.

Via Barchart

Soybeans had a small dip this week after its nice run higher from the previous dip at the end of March. Soyoil prices continue their move higher pulling beans with it while meal struggles. Indonesia placed a palm oil ban on both refined and unrefined product. The slow start to planting will ultimately roll into affecting soybeans like corn but we aren’t at panic mode yet. The start to the year has been less than ideal when the world stocks need a great year. Beans daily trading limit will move up to $1.15 effective May 1st.

Via Barchart

Cotton

July cotton traded limit up (7 cents) on Thursday to set a new contract high at $1.4768. Export data from last week was better than the last few weeks. Cotton’s problem appears to be a lack of world supply mixed with (so far) not ideal growing conditions in Texas. Forecasts for rain in Texas are very welcome but will need to be widespread and a large amount to help the drought. (See drought map below)

Dow Jones

The Dow was down this week as volatility continues to be in the markets as earnings continue to come across with some large companies getting crushed and others posting solid numbers. Tech companies have had a good week after getting run over the past couple months. This may not be the bottom for tech but it is nice to see some good numbers and some support.

Via Barchart

Drought Monitor

The drought monitor below shows where we stand week to week.

Podcast

RCM Ag Services put a unique spin on National Agriculture Day by going international. That’s right, we jumped right into international waters with Maria Dorsett from USDA’s Foreign Agriculture Services for an interesting discussion about linking U.S. agriculture to the rest of the world.

Each year, March 22 represents a special day to increase public awareness of the U.S.’s agricultural role in society, so why not take it one step further by bringing in a global component? As the world population soars, there’s an even greater demand for producing food, fiber, and renewable resources. That’s why we’re taking a deeper dive into the USDA’s trade finance programs, like the GSM-102, which supports sales of U.S. agricultural products in overseas markets and supports export growth in areas of the world that are seeing some of the fastest population growth.

So, jump aboard (no passport needed), as Maria discusses how U.S. companies use GSM-102, what the program features, and the benefits that it offers!

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 blawrence@rcmam.com.

26 Apr 2022

The Leonard Lumber Report: It Was A Grind Higher Week in Futures

Change for the Week:

May Futures: 1002.60 +113.60
Open Interest: 2848 +66
CoT: + 108 Industry   

It was a grind higher week in futures as the cash trade found traction. The timing of this cash buy has come about earlier than many would have liked. Logistics and timing continue to be the issue, and these issues have pushed the trade to the futures for some upside risk management. In today’s volatile environment, most find risk management to be a must. The futures did see light selling by Friday, but it mainly was Dow-related.

It’s time to reintroduce the elephant. The great debate is whether there will be a soft or hard landing. In either case, the ship is going down, and the question is how hard it will hit. While that is an interesting debate, we know the housing sector will be the first to show the negative signs regardless.  

Today the buy-side of the industry is trying to navigate the great unknown. There isn’t a big push to own wood, which keeps the marketplace slightly underbought. Contracts and programs are just enough to keep the pipeline flowing. Logistic issues are now having a negative effect on buyers. Instead of a rush to own enough, the buyer is stepping back and just filling in. Another panic buy is looming out there, but the quantity may be less this time. That is troubling long-term.

 

Let’s Get Technical: 

A while back, the support and resistance channel in May showed an intersection at the $1000 mark, and here we are. Today we have the 100-day moving average meeting the top of the Bollinger band at 1049.60. The 200-day is meeting the bottom of the bands at 861.80. That typically would lead to a breakout. Today it could be signaling a sideways trade. The chart pattern calls a sideways trade from $1200 to $800. The bands are calling it $1050 to $860.00.

 

Outlook: 

There is a change in this cycle’s features going on. Those who limited exposure for the last few years also limited their profits. The cycle is now moving towards those who limit their exposure will be limiting their losses. While that isn’t the case today, the momentum is swinging back. This new feature of limiting exposure is creeping into the industry at a time when demand is good. That leads to tightness. Every dollar higher also leads to less buying. This creates a positive cycle staying in place for a long period. That is what the market indicators are telling us. The short-term investment could be long lumber futures and shorting ARC…..

Open Interest and Commitment of Traders

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

 

About The Leonard Report

The Leonard Lumber Report is a new 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.

Before You Go…

RCM Ag Services put a unique spin on National Agriculture Day by going international. That’s right, we jumped right into international waters with Maria Dorsett from USDA’s Foreign Agriculture Services for an interesting discussion about linking U.S. agriculture to the rest of the world.

Each year, March 22 represents a special day to increase public awareness of the U.S.’s agricultural role in society, so why not take it one step further by bringing in a global component? As the world population soars, there’s an even greater demand for producing food, fiber, and renewable resources. That’s why we’re taking a deeper dive into the USDA’s trade finance programs, like the GSM-102, which supports sales of U.S. agricultural products in overseas markets and supports export growth in areas of the world that are seeing some of the fastest population growth.

So, jump aboard (no passport needed), as Maria discusses how U.S. companies use GSM-102, what the program features, and the benefits that it offers!

20 Apr 2022

A Closer Look into the Evolution of Farming Equipment

Advancements in heavy equipment play a critical role in ensuring that agriculture and food production is sustainable for the world. From horses pulling wagons to modern-day combines, the evolution of farm equipment has played a vital role in the agriculture industry.

The development in technology has not only helped speed up the overall farming processes, but farming equipment is essential for decreasing the amount of manpower needed for each harvest season and increasing production overall.

First, let’s recognize a few of the pioneers and inventors of farming machinery:

  • In 1794, Eli Whitney created the cotton gin, which separated seeds, hulls, and other unwanted materials from cotton after it had been picked.
  • In 1831, Cyrus H. McCormick developed the first commercially successful reaper, a horse-drawn machine that harvested wheat.
  • In 1837, John Deere invented the self-polishing cast steel plow, improving the iron plow.
  • In 1842, the first grain elevator was built by Joseph Dart.
  • In 1878, a New Jersey woman named Anna Baldwin invented the first suction milking machine, which revolutionized the industry.

 

It’s incredible to see how far the evolution of these essential pieces of equipment has come, and be sure to read more in-depth descriptions of these early inventions here. We also had the opportunity to sit down with the late Bob Miller, who also discussed the various items used on his family farm in Wisconsin from 1927-present day in this recently released whitepaper, Then vs. Now: Memoirs from the Miller Family Farm; check that out here.

And thanks to these early inventions, today’s modern agriculture has adopted tools and digital technologies that have significantly improved the way farmers can manage their crops and fields. Here are five technologies that have been added to machinery that has made farming more efficient and safer:

  1. GPS software and GPS agriculture
  2. Satellite imagery
  3. Drone and other aerial imagery (Check out our podcast with Dr. Scott Irwin where we discuss the biggest evolution in crop agriculture here)
  4. Farming software and online data
  5. Merging datasets

 

The introduction of satellites into the world of agriculture has helped make farming decisions easier and has helped make farming more efficient. Satellites allow tractors to be more efficient with GPS technology to help plant and spray crops more precisely. Satellite imagery is also now used in the USDA’s research when putting out yield estimate reports by using satellite imagery to try and estimate the health of the crop.

Technological updates in drones and other intelligent software have allowed farmers to use artificial intelligence to help make decisions for the crop as the year goes on. Agriculture companies have developed apps that can gather hundreds of data points for every field someone farms to help farmers make time-critical decisions much easier. Artificial intelligence can make decisions in seconds that used to take hours of looking over data from the soil composition, seed variety, to when to spray the chemicals.

Not only does this information help each field for that year, but it helps farms become more sustainable and produce more consistent crops year after year. Reducing carbon emissions by being more efficient with tractors, combines and planters will help farming be “greener” moving forward. AI also helps benefit both farmers and the farming process by reducing runoff of chemicals and fertilizers as well as staying in the soil.

The continued development of technology and equipment is crucial now, more than ever, to help farmers produce the needed quantities to feed the world. With a global population projection of 10 billion people by 2050, agricultural production will need to increase by at least 60%, according to the Food and Agriculture Organization (FAO) from current levels. Will it be equipment, seed / chemicals, or simply mother nature that helps us reach a 200 bu per acre corn crop in the years ahead??

Be sure to download how equipment works to feed the world in our infographic here.

 

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 us today to speak with an ag specialist at 888-875-2110!

 

 

What-It-Takes-To-Feed-The-W

Did you know that by 2050, the world is expected to feed almost 2 billion more people than we do today? As the global population continuously rises, a significant amount of food will need to be produced over the next 30 years.