Category: Risk Management

27 May 2022

Corn, Crude Oil, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

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.

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.

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.

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.

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.

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 [email protected].

13 May 2022

Agriculture, Corn, Dow Jones, Fertilizer, Grain, Market Commentary, Market Updates, Other News, Podcast, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices, Wheat rcmagserv 0 comment

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.

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.

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.

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).

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 [email protected].

29 Apr 2022

Agriculture, Corn, Cotton, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Podcast, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

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.

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 1^st.

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.

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 [email protected].

08 Apr 2022

Agriculture, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Risk Management, Soybeans, USDA Report, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: MARCH 31 – APRIL 8

A bullish USDA WASDE report on Friday did nothing to affect the markets; it appears that the report was met with little reaction. The U.S. ending stocks were unchanged while world ending stocks were raised due to larger Brazil corn crop estimates by 2 million tonnes. The weather in South America and the U.S. over the next month will be the main focus as it will be essential for U.S. corn to get off to a good start as far as world supply goes. The war in Ukraine continues, and as the ultimate damage and consequences are unknown, it is doubtful Ukraine will be able to produce/export what it was for a few years.

Soybeans were trading higher into the report and continued that post report solidifying their gains for the week. The USDA had the U.S. ending stocks at 260 million bushels which were right on estimates going into the report, and world ending stocks at 89.58 million metric tonnes. World veg oil prices continue higher, pulling bean oil prices to new 2-week highs. This week’s gains have gotten back the losses from the acreage report last week.

Wheat’s report numbers were neutral with no surprises. Wheat will gain on corn and beans strength as there is not much news outside of Ukraine and Russia to move it right now. With no end to the war seemingly coming soon, major questions will remain unanswered as world trade will be messed up for a long time. World trade with wheat will be what markets will keep an eye on as the cash market will give us a better idea of expected availability moving forward.

Dow Jones

The Dow was relatively flat on the week while tech struggled as the market is trying to position itself ahead of more Fed moves. It is unsure how many and by how much the hikes will be this year as inflation continues to be the main problem facing Americans. The market is hoping that the struggles of Q1 will not continue into Q2, but inflation is sticking around.

Drought Monitor

The drought monitor below shows where we stand heading into April compared to last year.

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 [email protected].

01 Apr 2022

Corn, Cotton, Crude Oil, Dow Jones, Fertilizer, Grain, Market Commentary, Market Updates, Other News, Podcast, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: MARCH 24 – 31

A bullish USDA Prospective Plantings report for corn saw both old and new crop corn getting a boost on Thursday. The USDA sees corn-planted acres for all purposes in 2022 at 89.5 million acres, down 3.87 million from last year and well below the average trade estimate of 92 million. Several factors might have played into this number but going from 92 million acres at the USDA Ag Forum to this number a month later is very interesting. Input prices and supply chain woes likely played a major role in the USDA predicting more bean acres than corn as the cost per acre to raise corn will be very high this year with the risk of not receiving all inputs in time. On top of the fallout of the war in Ukraine, this lower number should see tightening on the world balance sheets even with a record yield this year.

Soybeans had a bearish report as the USDA came out with 91 million planted acres in the US for 2022. This would be a record for planted acres and 4 percent higher than last year, with planted acreage being up or unchanged in 24 of the 29 estimating states. Fewer inputs are needed per acre to grow beans than corn played a major role in the shift in acres year to year. How the market trades in the next few days will be interesting to watch as 91 million is a lot of acres, but the world needs it, so will it actually be enough?

Wheat remains vulnerable to Ukraine and Russia news while also figuring out its value in the world market. Wheat acres came in at 47.351 million, lower than the pre-report estimates — 2022 winter wheat planted area at 34.2 million acres and (23.7 million HRW, 6.89 million SRW, 3.62 WW) 11.2 million acres of spring wheat. China’s poor crop and the issues with the U.S. crop seem to be priced into the market possible, but for the time being, Russia’s war in Ukraine will be the market moving news.

Cotton made another jump higher this week before falling following the report. Cotton acres came in at 12.2 million acres, up 9% from last year. Many growing areas have been dry this winter and could use a spring rain to help improve planting conditions. World demand is still present, so the US will have buyers if they can produce a crop. The old and new crops have been over $1 for several weeks now, making it easier to plant than when it was in the 50 cent range a couple of years ago.

Crude continued its move lower this week with a couple of large intraday ranges. The Biden administration announced that it would release 1 million barrels of oil a day from the Strategic Petroleum Reserves to help fight higher gas prices. The big dip came from rumors of progress in peace talks in Ukraine that seemed incorrect as the conflict continued. The Biden administration also wants to make companies with leases on federal land “use em or lose em” but that would take months to years to go from 0 production levels. When Democrats want to shift to EVs and other “green” energy, it is hard to see why companies invest capital when that party wants to get rid of their dependency as fast as possible.

Dow Jones

The equity markets fell slightly during the week due to Thursday’s fall into the close of trading. The 2/10 yr treasury yield inversion has been the main talking point this week as it could be a signal of a recession. While it does not always mean there will be a recession, we have not had a recession without that happening, even though it is usually over a year later. Q1 ended this week after a few months of losses, volatility, confusion, and inflation, and it is hard to see it calming down anytime soon.

Drought Monitor

The drought monitor below shows where we stand heading into April compares to last year.

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 [email protected].

25 Mar 2022

Agriculture, Corn, Cotton, Grain, Market Commentary, Market Updates, Podcast, Risk Management, Soybeans, USDA Report, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: MARCH 17 – 24

Corn has continued to trade in the same range since early March as the markets wait for next week’s acreage report from the USDA. This is a major market-moving report historically, so expect volatility either way. IHS Markit’s current estimates were for 91.42 million acres of corn, while Pro Farmer came out with 91.9 million. While these numbers seem realistic and may ultimately be right, I would be surprised if the USDA came out with anything lower than 92 million. The big question is, will higher inputs cause fewer acres even though there are higher prices, or will it be flipped? All eyes will be glued to the markets for the report, with the only other market-moving news until then will be developments in Ukraine.

Soybeans continued their steady climb while corn and wheat calmed down. Next week’s report will be important for beans as well. Some analysts expect more bean acres this year as some farmers switch corn to beans in favor of lower input costs. IHS Markit estimates 88.58 million acres while Pro Farmer estimates 87.8 million. This is a good size difference showing uncertainty around the bean number with prices this high. South America’s weather has become less newsworthy so expect the market to position itself into the report unless there is any unforeseen news.

Wheat’s craziness cooled off this week as many people have completely gotten out of the market until there is less uncertainty. With no significant news this week on the path of the fighting in Ukraine, the markets stayed in a smaller trading range compared to the past few weeks. The world wheat outlook is not very bright with the problems in Ukraine, China’s awful crop, and the struggles with the US crop, expect balance sheets to get tighter. World sanctions on Russia will play out in the wheat market if everyone stops buying Russian wheat; China will likely shift their buying to them and change up the trade dynamic of countries. The major news moving forward is still Ukraine.

Cotton

Cotton has had a good few weeks with the May contract topping $1.30. Many in the industry have expected this move higher, but its reluctance to do it has been frustrating. With a tight market and world demand, this growing season will be important. Analysts estimate that between 11.7 and 13 million acres will be planted, which is much higher than last year’s 11.2 million acres.

Dow Jones

The equity markets made gains again this week as markets appear to be holding their breath, hoping that we have bottomed while also figuring out what to expect ahead. With several rate hikes expected this year, the markets will price those in accordingly and should not be shocked when it happens. Inflation concerns remain as oil prices bounced back over $100 and may stay there for the foreseeable future with no resolution to the war in Ukraine in sight.

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 [email protected].

22 Mar 2022

Agriculture, Podcast, Risk Management rcmagserv 0 comment

Linking U.S. Agriculture To The World With Maria Dorsett of USDA

RCM Ag Services is putting a unique spin on National Agriculture Day by going international. That’s right, we’re jumping 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!

Quick Links from the episode:

Educational GSM presentations:

USDA’s Export Credit Guarantee Programs

GSM 102 (Spanish)

You can reach out to Maria at [email protected] & by checking out the links below:

https://twitter.com/USDAForeignAg

https://www.facebook.com/USDA

http://www.youtube.com/usda

18 Mar 2022

Agriculture, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: MARCH 10 – 17

Corn was pretty flat on the week, but it did not lack volatility. The war in Ukraine and the constant news make for wild swings on unconfirmed reports such as peace talks and Russian demands. The volatility has caused many headaches, but the volume has decreased, showing that many traders are watching from the sideline and not trading volatile rumors that may or may not be true. The next month of weather will be important as some areas of the US are very dry and will need moisture heading into the spring. Corn export sales were above expectations this week, helping the bounce back Thursday.

Soybeans fell on the week as the news affecting beans is not solely out of Ukraine. South America has had better weather conditions the last couple weeks and forecasted ahead. While the drought conditions did plenty of damage to the crop early on, the improved conditions are good but not great to help out. Bean exports were within expectations this week as beans have traded relatively flat the last couple of weeks.

Wheat’s volatility continued this week as the war in Ukraine continued. Reports of peace/ceasefire talks have been in the news that seems to move markets whenever a new one is reported, but the volatility will continue until there is a resolution. There will still be massive fallout from this war as Ukraine’s infrastructure will be devastated, and sanctions on Russia will be large. Ukraine’s crop year drastically change, and it will be hard to get a full read on the damage until much later. Rain fell on some of the drier areas in the US that grow wheat, but the market did not seem to care. For now, the news will continue to be Ukraine and Russia.

Dow Jones

The equity markets rallied this week as investors aren’t sure if we bottomed but felt the market had fallen enough to be an excellent area to get back in. The fed decided to raise rates for the first time since 2018 raising it a quarter of a point. They also announced to expect six more raises as the year goes on to fight inflation. The market had already priced this news in, and after a short dip down, markets finished the day after the news higher. China has had a new round of Covid lockdowns, which is something to watch.

Podcast

Tune in as biotech guru Dr. Channa S. Prakash discusses everything from Alabama football, genetics as one of the most extensive agricultural advancements, the most significant risk factors to feeding the world over the next 30-50 years, plus everything in between.

Why producing crop plants with a much gentler footprint on the natural resources will help feed the growing population. How 75% of the world’s patents in agriculture gene editing are coming from China. Understanding that trying to impose restrictions on our ability to grow food can be a considerable risk to agriculture. Listen to hear about these topics and more!

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 [email protected].

04 Mar 2022

Corn, Crude Oil, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Podcast, Risk Management, Soybeans, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: FEBRUARY 24 – MARCH 3

Corn made large gains this week following wheat, but not with the same panic. While Ukraine is a major corn exporter, it is not on the same level of wheat. Corn’s moves will be similar to wheat as the news from eastern Europe, and war will be problematic for the world balance sheets. While it has not moved with the same vigor as wheat, the $1 gain in the last eight trading days shows the potential fallout from this spooks the market. It is hard to tell how many acres will be lost this spring, but it is estimated that only 60% of corn seed is on farms. How likely is it the rest will make it to the farms? We cannot be sure, but it certainly won’t be much more if the conflict drags out. We are still in an inflationary environment, and fund money is very much in these markets, so when they decide to take profits, we will see the same volatility we have of late.

Soybeans gained on the week but barely when compared to corn and wheat’s gains. Corn and wheat are major exports for Ukraine and Russia out of the black sea area where beans are not, so they are not immediately affected. South America’s weather outlook has improved but will not turn around the crop too much after its rough start. Soybeans will benefit from the corn and wheat stories, but they also have their own story to follow in South America.

The soft red winter “Chicago” wheat is in full-on panic mode, as you can see from the limit move days in the chart below. The war in Ukraine does not seem to be ending soon, and the sanctions on Russia will last and hurt their economy. Eventually, the market will figure out what fair value wheat is, but for now, with the potential for Ukraine to not do their regular care of the crop, it is on a ride. If Ukrainian farmers cannot apply the fertilizer they usually do, the crop will shrink by several metric tons and could be double digits. Ukraine is the 5th largest exporter of wheat globally; Russia is number 1; this conflict will have major ramifications in the wheat market for the foreseeable future.

Dow Jones

This week, the equity market made decent gains as they have had a mixed trade the last few days. Jerome Powell said this week that it is all but a certainty that rates will be raised 25 basis points in the March meeting, lower than the 50 thought a few weeks ago before the war with Russia and Ukraine. Inflation has been bad the last year and will not improve soon with higher commodity prices across the board and Russian sanctions presenting a problem for some trade. Look for investors to focus on U.S. equities for the time being, as Europe and emerging market countries use Russia for a lot of their energy and could see issues with production and energy crunches.

Crude Oil

Crude moved higher this week as sanctions against Russia have made the future of Russian oil exports cloudy. The U.S. purchases roughly 600,000 barrels of crude from Russia a day, which does not help our already high gas prices. Crude still has room to go higher as ramping up production to make up for any lost oil takes months to do. If this conflict drags out, we will see elevated fuel prices through the summer and be a larger expense on the farm than the last few years going back to 2014. The 10-year chart below shows the current levels to 2014 to help you budget if you did not hedge your fuel prices.

Podcast

Tune in as biotech guru Dr. Channa S. Prakash discusses everything from Alabama football, genetics as one of the most extensive agricultural advancements, the most significant risk factors to feeding the world over the next 30-50 years, plus everything in between.

Why producing crop plants with a much gentler footprint on the natural resources will help feed the growing population. How 75% of the world’s patents in agriculture gene editing are coming from China. Understanding that trying to impose restrictions on our ability to grow food can be a considerable risk to agriculture. Listen to hear about these topics and more!

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 [email protected].

18 Feb 2022

Agriculture, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Podcast, Research, Risk Management, Soybeans, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: FEBRUARY 10 – 17

Corn made small gains on the week as grains did well across the board. The forecast for South America can’t seem to make up its mind switching back and forth on rain amounts. Argentina has consistently had rain in the forecasts, but what parts of the country and the amount has been inconsistent. Exports were better this week than last, but nothing crazy; potential conflict in Ukraine and further issues with the South American crop could see those numbers pick up soon. The markets are not open for President Day on Monday the 21st, so there is more time to develop around the world. Based on the Dec ’22 futures for corn after today, the February insurance price is $5.84 ¾.

Soybeans were up slightly on the week but have been relatively flat (relative to other weeks) the last two weeks, as you can see in the chart below. The continued weather issues in South America and the Russia v Ukraine possible invasion have been the movers for beans just like corn and wheat. Bean exports this week were the best of the group, with a flash old crop sale being announced on Thursday. We have seen private estimates continue to roll in for production in South America and what to expect this year in the US. The USDA Ag Outlook Forum will start next Wednesday, and we should find out what they are expecting for the year ahead and how the US will affect balance sheets. The insurance price for beans is $14.22 ½.

Wheat has been on a roller coaster the last two months with the ups and downs and uncertainties around Russia and Ukraine. A Russia invasion would be bullish for wheat as countries would shy away from trade with Russia, and Ukraine would stop exports as they try to keep Russia at bay. The Black Sea is a major world trade region. This conflict could lead to potential stoppages, shortages, or even a possible blockade in the region that would cripple a major trade corridor. Keep an eye on this developing story as it could have potential long-term consequences as the US has also threatened Russia with sanctions (they don’t seem to be fazed at all by Washington’s threats).

Dow Jones

This week, the equity markets fell as confusion and concerns of post-Olympic wars between a few countries inch closer. Russia was reported to have changed their mind on invading Ukraine, only for that news to switch to them adding troops at the border. China invading Taiwan post-Olympics is also a possibility as that has seemed to be forgotten as the Russia news took over the market. Earnings season has been mixed with losers and winners in all sectors as inflation has begun to show up more in guidance for the year ahead.

Podcast

Tune in as biotech guru Dr. Channa S. Prakash discusses everything from Alabama football, genetics as one of the most extensive agricultural advancements, the most significant risk factors to feeding the world over the next 30-50 years, plus everything in between.

Why producing crop plants with a much gentler footprint on the natural resources will help feed the growing population. How 75% of the world’s patents in agriculture gene editing are coming from China. Understanding that trying to impose restrictions on our ability to grow food can be a considerable risk to agriculture. Listen to hear about these topics and more!

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 [email protected].

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Disclaimers
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.

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.