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28 Sep 2021
Agriculture, Cash Basis, Grain, Other News, Podcast, Risk Management rcmagserv 0 comment

Ag View Solutions – Here’s what you need to know about the Outlook for the first week of October

Jody Lawrence, RCM Ag Services’ head of research, joined Shay Foulk on his podcast “The Ag View Pitch” for this week’s market outlook. Jody hits on some major points, including harvest, basis, the upcoming USDA stocks report, and storage decisions that need to be made.

Jody makes the point of discussing what the cash market has been telling us vs. what the futures market and USDA are. Basis has been historically strong while the USDA has not had drastically tight balance sheets showing us some disconnect. Should we expect this week’s report to lower ending stocks as the cash market would hint at?

A harvest update from what Jody and Shay are hearing from their people, both agree that there were many unknown/under-reported issues early in the year that we may be seeing played out combined with the dry and hot finish.

The basis discussion starts with ethanol and how the plants are affecting many different commodities. Currently, margins for ethanol allow them to have a better basis, which forces elevators to do the same to remain competitive.

Should you store soybeans or corn this year? Jody and Shay dive into the margins and spread in the futures markets and basic considerations. No matter what you decide, allowing yourself the opportunity to still participate in the market via futures and options will allow you to not miss out on upside possibilities.

Jody has some final thoughts on the oats market that he leaves us with and what it could mean for the corn and grain markets in countries with major oats markets.

17 Sep 2021
Agriculture, Corn, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report rcmagserv 0 comment

AG MARKET UPDATE: SEPTEMBER 2 – 16

Corn was struggling heading into the USDA report last week but has seen a good 30+ cent bounce from the sub $5.00 lows. The USDA raised their expected yield for corn to 176.3 bu/acre and added 600,000 acres. They also raised the ending stocks with higher yield for what some would consider a bearish report, but the reaction was neutral to bullish following it. As harvest gets going, yield estimates cover a wide range, but it appears that a mid 170s is more and more likely. With no significant weather concerns in the coming weeks, harvest should get off to a fast start. As strong as prices currently are, it is always essential to have a marketing strategy to avoid missing out on other opportunities. As you debate how much to store in the bins or go ahead and sell, make sure it is what makes the most sense for your farm. If you want to sell now to get the cash, consider what can be done on paper to not miss out in case of higher prices in the future. As harvest gets rolling expect yield updates to change as well while the markets keep an eye on them.

Via Barchart

Soybeans have had a similar reaction the past couple of weeks as corn. The USDA slightly raised their bean yield to 50.6 bu/acre from 50 and lowered harvested acres by 300,000. China continues to show up in the export report which is both needed and welcome to see after this summer’s lack.. As the ports in New Orleans and the other grain terminals along the Mississippi River reopen following the hurricane, export disruption worry has slowed. Harvest (like corn) should get off to a great start in the coming weeks, and it is crucial to have your marketing plan ready and execute it. Keep an eye on yield reports as they come out in the weeks ahead and the cash market as it will help give an idea of how much people are willing to sell now or store.

Via Barchart

Dow Jones

The Dow has struggled so far in September like the other indexes. This is not uncommon to see this time of the year but does give investors heartburn when you see back-to-back weeks of struggles.

Wheat

The insurance price was set for the red wheat varieties yesterday at $7.16 and $7.08, a multi-year high.  High prices cure high prices so expect corn to lose acres in the Wheat Belt as the guarantees will motivate additional wheat acres.

Podcast

Check out our recent podcast where we’ve brought on one of our real-life firefighters from RCM Ag – Jody Lawrence, along with Tim Andriesen from the CME Group to provide us with some inside baseball knowledge of the current state of agriculture markets. They discuss the real-world application of short-dated options to fight the recent blaze of volatility surrounding agriculture markets potentially. https://rcmagservices.com/the-hedged-edge/

 

US Drought Monitor

The maps below show the US drought monitor and the comparison to it from a week ago. The dryness will allow harvest to start on time.

 

Via Barchart.com

 

 

03 Sep 2021
Corn, Grain, Market Commentary, Market Updates, Podcast, Risk Management, Soybeans, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: AUGUST 26 – SEPTEMBER 2

Corn was hit hard this week as we continue to experience the fallout from Ida hitting the export business along with a favorable weather forecast ahead. Exports were better than expected this week coming in at 43 million bushels, which was the highest export total for corn since mid-May. The fallout from Ida will, more than likely, be seen playing out in the cash market.  That said, the longer supply chains are tied up, the bigger effect it will have on the uncertainty of the futures market. As we have mentioned before, South America’s crop is smaller than initially anticipated. With a smaller crop there will be some demand shift to the US corn crop; however, that is yet to show up in the export reports thus far. The big question is if/when that will change and show up in the US export reports. The September 10th USDA report next week will either fuel this bear run of the last month or calm the seas. An interesting note – The September USDA report the last 3 years has had the corn yield below the final yield which will be something to look for if they adjust yield.

Via Barchart

Soybeans have had the same fate as corn the last few weeks as the bears have had the momentum. The issues in New Orleans are playing a major role in this week’s fall just like they did for corn. Brazil is getting some of that business despite a premium being paid just because traders know they can get beans on a ship and send it. The good weather in the weeks ahead could still help the soybean crop despite maybe being a little too late for most corn. As seasonal temperatures set in and no freeze expected any time soon the weather is bearish for prices while good for the crop.

Via Barchart


Dow Jones

The Dow gained on the week as investors continue to feel out the market but not ditching it completely for other options. The rally from last Friday helped pull the market up on the week as the rest of the trading has been muted with no major moving days.

Ida

The port of New Orleans and the other infrastructure in the state of Louisiana and along the Mississippi River will take weeks to address and fix. This will/has caused major problems already for many residents in the areas effected along with the shipping.

Podcast

Check out our recent podcast where we’ve brought on one of our real-life firefighters from RCM Ag – Jody Lawrence along with Tim Andriesen from the CME Group to provide us with some inside baseball knowledge of the current state of the agriculture markets and to discuss the real-world application of the use of short-dated options to potentially fight the current blaze of volatility surrounding agriculture markets.

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

 

US Drought Monitor

The maps below show there was a little change over the week with weekend rains in some areas that needed it and some drying in Indiana.

Via Barchart.com

27 Aug 2021
Agriculture, Corn, Grain, Market Commentary, Market Updates, Podcast, Risk Management, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: AUGUST 19-26

Corn was unchanged on the week as slow news, a lack of major export announcements, and no major rain events crossed the area’s most in need. Additionally, most of the corn belt has seen above average temperatures this week keeping a bid under the market. The late season heat and hot nights are taking their toll on the crop but hopefully the heat will end soon according to some forecasts. This time of year, markets begin to look at multiple yield reports coming in from various independent groups – i.e the Pro Farmer Tour (results HERE). At first glance many in the industry feel the tour results are a bit high, but only time will tell.  Any big surprise exports or continued weather problems will be the bulls news while rain and yield reports will be the bears.

Via Barchart

Soybeans made small gains on the week as the same news moved beans that moved corn. China continues to be a buyer going on 2 weeks now which is supportive after their long silence. The market is reacting to these purchases as if they were expected and normal purchases. Regular and consistent purchases will need to continue for the market to remain supportive.  Any abrupt could see another slide heading into harvest before we have a better idea on yield. The rains that some think will help corn will also help beans as we head into September.

Via Barchart

Dow Jones

The Dow gained on the week as what seemed to be investor weariness last week turned into buying opportunities. The events in Afghanistan weighed on the market Thursday with uncertainty about the US foreign relations going forward.  As of this morning, Friday 8/27/2021, the S&P and Nasdaq are making fresh all-time highs following the latest comments from the Federal Reserve where NO NEW policy changes were announced and supportive monetary measures will remain in place.

Afghanistan

The suicide bombing by an ISIS-K member Thursday in Kabul, that claimed the lives of dozens of Afghan citizens, along with a dozen US Service members, while injuring countless others, shook the world. The swiftness of the fall of Afghanistan’s army and government to the Taliban has put the US at the center of one of the biggest international situations in recent memory. Going forward the countries around Afghanistan will be important to keep an eye on for exporters to the middle east.

Podcast

Check out our recent podcast where we’ve brought on one of our real-life firefighters from RCM Ag – Jody Lawrence along with Tim Andriesen from the CME Group to provide us with some inside baseball knowledge of the current state of the agriculture markets and to discuss the real-world application of the use of short-dated options to potentially fight the current blaze of volatility surrounding agriculture markets.

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

US Drought Monitor

The maps below show there was not much change over the week despite weekend rains in some areas that needed it and some drying in Indiana.

Via Barchart.com

27 Jul 2021
Agriculture, Corn, Cotton, Crop Insurance, Grain, Market Commentary, Market Updates, Options, Podcast, Research, Risk Management rcmagserv 0 comment

Managing Today’s Market Risks through Short Dated Options with CME Group

It is no secret that commodity markets have been on fire over the past 12 months.   On today’s podcast we’ve brought on one of our real-life firefighters from RCM Ag – Jody Lawrence along with Tim Andriesen from the CME Group to provide us with some inside baseball knowledge of the current state of the agriculture markets and to discuss the real world application of the use of short dated options to potentially fight the current blaze of volatility surrounding agriculture markets.

As the director of Research for RCM Jody is no stranger to the podcast.  Tim, is the Managing Director of Agriculture products for the CME Group and is responsible for management of the company’s global agriculture commodities business – including grain, oilseed, livestock and dairy risk management products.

 

Find the full episode links for The Hedged Edge below:

04 Dec 2020
Agriculture, Meats, Podcast, Research, Risk Management rcmagserv 0 comment

Risk Management, Research Writing, and International Protein with Simon Quilty

International meat trade (including Kangaroo!), years of writing and thousands of subscribers, risk management consulting and more – today’s guest really is a jack of all (ag) trades. Simon Quilty, global meat trader and analyst with Global Agritrends is on today’s podcast to take a deeper dive into his risk management background (with tips for operations of all sizes), the background on how he became one of the world’s leading researchers on international protein markets, and more crazy stories that fit his entertaining personality.

Follow along with Simon at the Global Agritrends website.

From the episode: Man punches a kangaroo in the face to rescue his dog

Chapters:

00:00-01:13 = Intro

01:13-11:53 = World Traveler, Lobbyist / From trading the physical to exploring China’s economy

11:54-36:36 = Potential for Ag Markets / China’s 2 speed economy & Hog pressure concerns

36:37-43:10 = Favorites

 

Find the full episodes here:

And last but not least, don’t forget to subscribe to The Hedged Edge on your preferred platform, and follow us on Twitter, LinkedIn, and Facebook.

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.