RCM Ag Services

Category: USDA Report

18 Nov 2024
Agriculture, CME, Corn, Education, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, U.S. Dollar, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: OCT 29 – NOV 18

December ’24 corn rallied back to the $4.30-point last week, matching its recent highs from the start of the month. Corn’s 40+ cent rally from the August lows has been very welcome as harvest wrapped up and bins were getting full. Corn struggled to hold this level of trading for long a few weeks ago but with the December contract getting ready to expire and all the focus shifting to March the markets need some help to push to the $4.50 mark. Funds are long 550 million bushels of corn, the largest long position in 21 months. The November 8th USDA report had the ’24 US corn crop at 183.1 bu/ac, avoiding the fears of the USDA finding an even bigger crop and raising yields that would’ve sent the market lower. Exports have been solid but within expectations as post-election trade will involve countries positioning themselves ahead of the new Trump presidency.

Via Barchart

Soybeans recent rally was quickly given back with January soybeans trading just over $10. The recent lows in the $9.75 range appear to the where support is showing up as it has traded down to that range a few times but keeps bouncing back. The USDA had the US soybean production to 51.7 bu/ac, below the 52.8 bu/ac estimate the markets had priced in. While the market got an initial bounce from the report the fact that another trade war may be on the horizon with record bean yields in the US and South America, the supply and demand story is not friendly in its current state.

Via Barchart

Equity Markets

The equity markets rallied following the presidential election and have since given some back. While Trump is seen a market friendly, the “who will benefit?” is a big question mark as tariffs and promised lower government spending will have widespread effects. Republicans will control the house and senate but with some senators not high on Trump, he likely will need some help to do everything he wants (think Manchin and Sinema with Dems).

Via Barchart

Other News

  • South America is off to a good start with another record crop expected with the expanded acreage.
  • Cotton has had a rough 2 months after falling below 70 cents with the recent low of $0.6626 squarely in the crosshairs.
  • The USD has moved higher topping 106 following the election.

Drought Monitor

Contact an Ag Specialist Today

Whether you’re a producer, end-user, commercial operator, RCM AG Services helps protect revenues and control costs through its suite of hedging tools and network of buyers/sellers — Contact Ag Specialist Brady Lawrence today at 312-858-4049 or [email protected].

 

07 Oct 2024
Agriculture, CME, Corn, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: SEPTEMBER 12 – OCTOBER 4

Corn’s rally back to $4.25 has been welcome heading into harvest as South America’s weather started off a little weary but have added rains to the upcoming forecast. The US drought to end growing season does not appear to have impacted the corn crop very much. Export demand has picked up putting us ahead of the USDA annual projections. The recent rally has taken corn above other major exporters which will likely lead to slowing exports unless South American weather becomes more of a concern. Harvest has gotten off to an average start with 21% harvested as dry weather shouldn’t cause any problems in the next week.

Via Barchart

Soybeans faded to end the week as harvest progress and pressure lead to profit taking after the recent rally. The biggest news related to soybeans, non harvest related, is that congress seems to be working on bipartisan legislature to address the importing of used cooking oil while still collecting tax credits. The American farmer wants this loophole closed to force biofuel producers in the US to use domestic production. This will lead to millions of more bushels used at crush facilities in the US throughout the year with a major question of, what happens to the bean meal? The longer congress and the lobbying associations take on this legislature will lead to more frustration among farmers across the country so with it being an election year I would be careful with what gets “leaked” by parties involved. The end of year drought across much of the US likely led to a smaller crop as pods did not get the moisture needed for max fill. Bean harvest is slightly ahead of expectations at 26% to start the week of Sept 30.

Via Barchart

Equity Markets

The equity markets continue to roll hitting new all-time highs as Fed rate cuts and the likelihood of a soft landing becomes higher. The market has broadened out but the biggest names (Nvidia, Meta, etc) are still doing well. With rates lowering over the next year expect money that has been getting 5%+ in fixed income to begin to move back into the market. Chinese stimulus prompted a large rally in Chinese stocks this week as they try to get their economy going again.

Via Barchart

Other News

  • The Fed announced a 50-basis point rate cut this month, cutting rates for the first time since the Pandemic. More rates are expected into the end of the year.
  • Tensions in the Middle East escalated as Iran launched attacks on Israel. Israel is expected to respond but how and when remain unknown, with attacks on oil fields a possibility crude oil rallied over the week.
  • Hurricane Helene caused massive devastation in the United States Southeast over the weekend causing loss of life and destruction of major infrastructure. The total amount of damage is still unknown, but it will take the mountain communities a long time to recover.

Drought Monitor

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].

 

12 Sep 2024
Agriculture, CME, Corn, Futures, Grain, Hedging, Market Commentary, Market Updates, Other News, Research, Risk Management, Soybeans, USDA Report, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: AUGUST 26 – SEPTEMBER 12

Corn has gotten back above $4.00 in a struggling market that needs good news to propel it back to the mid $4s. The USDA raised US corn yield to 183.6 bu/ac up from 183.1 bu/ac in last month’s report. In the USDA’s eyes the crop is getting bigger as struggling areas will be more than made up for by the best areas across the corn belt. Despite the higher US yield numbers, the corn trade following the report was welcome to see as it did not move much lower on larger numbers. If corn can bounce off or hold this $4 level then we can probably expect it to hang around here as planting gets rolling until we know what is actually in the field and if the numbers are closer to 180 or 183.6.

Via Barchart

Soybeans have seen a nice 50+ cent rally off recent lows with dryness in areas causing a little concern with pod fill and some pickup in demand. The USDA kept yield the same at 53.2 bu/ac as they agree with Pro Farmer tour that a massive crop is out there. Like corn, this recent bounce off lows is encouraging but may setup a range bound trade until harvest gets rolling and we have a better idea on the true yield. The USDA did slightly lower US ending stocks in both 23/24 and 24/25. Continued exports and any issues to South American planting are needed to drive beans higher in the current market.

Via Barchart

Equity Markets

The equity markets have been on a bit of a roller coaster lately with the tech/semiconductor trade having quite a bit of volatility while some rotation occurs with the Fed rate cuts expected to begin this month.

Via Barchart

Other News

  • The market is expecting a 25 basis point cut to the Fed Funds rate this month

Wheat

  • Wheat has been the one positive market lately, hitting new 2-month highs. The war in Ukraine and Russia continues to escalate and the market has responded accordingly. The USDA did not make any major changes in the report.

Drought Monitor

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 Jul 2024
Agriculture, CME, Corn, Dow Jones, Futures, Grain, Hedging, Market Commentary, Market Updates, Other News, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: JULY 8 – 22

Corn has consolidated in the $4 to $4.20 range since July 8 even with the USDA report. The USDA did not release any major updates to production as they let expected US yield at 181 bu/ac but it did have lower ending stocks for the next 2 years with increased old crop exports and increased feed demand. This bullish news was not enough to put a fire behind corn as the US crop this year remains on record breaking pace with the great weather start to the year. The forecasts to start the week were adjusted for a warmer drier US starting this week than initially thought, lifting markets.

Via Barchart

Beans seemed to find a near term bottom last week trading into the low $10.30 range. The sharp rally to start the week was a welcome sign with the largest up day for the Nov contract in at least the last 6 months. The USDA made minimal changes to soybeans in their update while adding demand to offset potentially record yields in the US. As we head into the back half of summer the bean market will trade on export demand from China and US weather.

Via Barchart

Equity Markets

The equity markets have shown volatility in July as several mega cap stocks that had been driving the market fell last week while small cap stocks saw their best week in years. The market is expecting rate cuts in September and the moves of last week appear to be repositioning within the market as funds space out their funds more away from the biggest stocks.

Via Barchart

Other News

  • President Joe Biden announced he would not seek reelection in November and put his support behind Kamala Harris to be the Democrats nominee. The DNC is in Chicago next week where unless a challenger pops up, she will become the nominee.
  • An assassination attempt on former president and current GOP nominee Donald Trump occurred at a rally last week after a gunmen fired on him at the event hitting his ear and killing someone in attendance.
  • The Ag markets will pay attention to the election as tariffs and trade wars (potentially from both candidates) are on the table.
  • Cotton continues its weakness drifting lower as the US is trending towards a large crop at this point in the year with weak demand from the global market.

Drought Monitor

   

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 Jul 2024
Agriculture, CME, Corn, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: JUNE 14 – JULY 8

Corn had the bottom fall out of it after trading between $4.60 and $5 from March to June. The USDA last week pegged the US corn crop at 91.475 million acres, over 1 million acres higher than the trade estimate. The USDA did make a note that those were the reported acres at the time of the survey so there is a good chance not all those acres end up getting planted. The crop ratings are currently better than last year’s at this time that led to a record crop and with no major weather concerns on the horizon and rains from Beryl expected to help some areas in the ECB later this week. With no major weather concern in the US or abroad right now, corn will need to find help in demand or fund buying as ending stocks remain high.

Via Barchart

Beans seemed to find a slight rally heading into the 4th of July before having a sharply lower start to the week, falling below $12 in the November futures contract. While the corn acreage number was bearish the soybean acres came in at 86.1 million acres (below the trade estimate of 86.783). The June 1st stocks number was slightly higher, but the markets could not find a catalyst higher. With no major weather issues on the horizon beans will need the funds to get out of their short positions while the charts still look bearish.

Via Barchart

Equity Markets

The equity markets have remained strong as they continue to set new highs. The market is looking to broaden after being very top heavy the first half of the year. With an election and possible rate cuts in the second half of this year, the market will have plenty of information outside of earnings to watch for.

Via Barchart

Drought Monitor

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].

14 Jun 2024
Agriculture, CME, Corn, Cotton, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: MAY 31 – JUNE 14

Corn’s small 18 cent rally off recent lows for new crop corn has been very welcome after 6 down days in a 7-day period to end May and start June. This week’s USDA Report was a non-event with the USDA making no changes to South Americas production from last month despite the trade expecting production well below the USDA’s estimate of 175 mmt (171.82 estimated). CONAB released their estimates on Thursday, increasing their estimates for Brazil’s corn crop but still 310 million bushels below what the USDA is saying. The heat over the next couple of weeks is not expected to be a major problem but if this level of heat with a lack of rain goes into July the markets would take notice and begin to worry a bit.

Via Barchart

Beans are lower over the last 2 weeks with them settling into a flat trade this week. The USDA report was uneventful despite the USDA cutting another 1 mmt from Brazil’s bean crop. US exports were revised lower and ending stocks rose as the slow pace of exports continued. With no major surprises and no major weather/production issues yet there is not much bullish news outside of CONAB’s Brazil production estimate which is 207 million bushels below this week’s USDA update.

Via Barchart

Equity Markets

The S&P 500 and NASQDAQ continue to move higher setting new all-time highs as several large tech companies beat on earnings. The AI movement is continuing its dominance, but some other areas are starting to find strength as funds are forced to reposition.

Via Barchart

Other News

  • The cotton market continues lower as there is nothing bullish in the news cycle for it other than the potential for up to 25 named hurricanes this year.
  • Wheat’s roller coaster ride continues with potential for lower Black Sea production still a possibility after the $1.50+ rally follows by a $1 fall with 10 down days in a row.

Drought Monitor

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].

 

03 Jun 2024
Agriculture, CME, Corn, Education, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: MAY 10 – 31

Corn had a rough week as planting is nearly wrapped up and the expectation of high initial US crop ratings put pressure on the market. The forecast for June turned slightly wetter but will not have any material impact on planting finishing up. The Black Sea yields continue to be pressured due to their weather with no immediate relief apparent. The USDA Crop Production report on June 12 will be watched closely as we get updates for the US including acreage, area harvested, and yield. The market will be looking for any good news before then to help support a weakening market.

Via Barchart

Beans fell on the week as planting advances despite some slowdowns in some areas due to weather. Currently only 3% of soybean production comes from areas experiencing drought. Rio Grande do Sul is turning warmer and drier after weeks of issues with flooding. Morgan Stanley estimates 5 million tonnes of soybeans were lost to the flooding in the region. Beans, like corn, have no bullish weather to help the market as it looks like normal planting progress should be made and no major weather issues in the forecast.

Via Barchart

Equity Markets

The equity markets have had a rough go lately with all major indexes falling well off recent highs. Several earnings misses and growing belief that “higher for longer” could last through the summer has people raising questions about the market.

Via Barchart

Other News

  • The Black Sea weather forecast has improved for next week as rain has been added to the forecast.
  • Wheat has seen a strong rally since mid-April seeing a $1.50+ rally at one point with possible production issues in the Black Sea even with the small pullback to end the week.

Drought Monitor

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].

 

13 May 2024
Agriculture, CME, Corn, Cotton, Dow Jones, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: APRIL 19 – MAY 10

Corn has seen a strong rally over the last couple of weeks as planting is slightly delayed in parts of the US and funds seem to have changed their tone a bit. Last week’s USDA Report did not have any earth-shattering news but did provide some good news for the markets. US corn stocks were lower than estimates heading into the report along with world stocks for both 23/24 and 24/25. The production outlook for this year, 181 bu/ac, continues to show how the advances in agronomic practices and seed genetics continue to grow. All of these carryout and stocks numbers are based on those production estimates so if we begin to see weather issues or problems at the end of planting, we could continue to see revisions to the downside, and vice versa with great weather and conditions.

Via Barchart

Beans had a rough week after a strong start to May. The USDA Report leaned bearish as the South American production continues to expand for the upcoming year. The USDA is slowly trimming Brazil’s bean crop but is still above CONAB’s estimates by a bout 300 million bushels. The recent flooding in southern Brazil will force their hand to lower their expectations but the CONAB estimates on losses will be closely watched. Another promising development in the report was the expectation of record imports and usage in China. While much of this is expected to be met by Brazil and issues with their production will still need to be met.

Via Barchart

Equity Markets

The equity markets have rebounded over the last couple weeks with earnings season going on. The feeling on Fed rate cuts keeps pushing them back with one not expected until the fall and at least one fed chair thinking we may not get one this year as inflation remains sticky. Rates will remain data dependent but the feeling of higher for longer continues to seem more likely.

Via Barchart

Cotton

  • Cotton has fallen well off the February and March highs as the lack of demand in the global market mixed with funds exiting their long positions has beaten down the market.

Via Barchart

Wheat

  • Wheat’s recent rallies are welcome after struggling to find much positive movement in the market to start the year. Frost damage to Russia’s wheat crop and a dry pattern in the Black Sea has been the recent mover as the USDA Report had some mixed numbers. Smaller than expected US stocks, 24/25 world stocks and total production with higher than expected world wheat stocks for 23/24.

Other News

  • Conflict continues between Israel and Palestine as a ceasefire has been negotiated on many sides, but nothing has been agreed to yet.
  • Major flooding across southern Brazil has killed thousands of livestock and will have an impact on their crop but the extent of which is not known yet

Drought Monitor

Here is the current drought monitor as we head toward planting with subsoil moisture a focus.

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 2024
Agriculture, CME, Corn, Futures, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: MARCH 8 – APRIL 8

Corn has traded in about a 20 cent range the last month spending much of its time in July corn between $4.40 and $4.60. The USDA acreage intention report gave the markets an initial bullish reaction but struggled to follow through past the report as prices have fallen back from the post report highs. Corn acreage for 2024 came in at 90.036 million acres (91.776 estimate) which was a surprise to the market. The trade appears to believe that the acreage number is likely higher as it has given some of the gains back quickly. While lower prices and high input costs are likely to affect farmer’s decisions, if the weather this April and May is friendly to planting it will be hard for farmers to leave acreage on the table. South America harvest in Brazil and Argentina is in line or slightly behind average.

Via Barchart

Soybeans have fallen from their recent highs as the USDA Report did not provide the market with any actionable news. The USDA came in at 86.510 million acres (86.530 estimate), because the acres were so close to the estimate the report was not a big mover for the bean market. The market has slowly traded lower since the report as the next market mover will be the April USDA and April CONAB Reports this week. The more information we can get on South America’s harvest the clearer the picture will become as the discrepancies between the USDA and CONAB still have the markets confused.

Via Barchart

Equity Markets

The equity markets have pulled back from recent highs with the pullback in some tech names but the market and economy are still strong as inflation remains sticky and the Fed trying to decide when, or if, to cut rates this year.

Via Barchart

 

Other News

  • US wheat acres will be lower than last year. Winter wheat plantings shrunk from the estimate in January, but spring wheat will be slightly higher than last year.
  • The transmission of bird flu in cattle in several states this week drove cattle prices lower and is a development to keep an eye on.

Drought Monitor

Here is the current drought monitor as we head toward planting with subsoil moisture a focus.

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].

11 Mar 2024
Agriculture, CME, Corn, Grain, Hedging, Market Commentary, Market Updates, Other News, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: FEBRUARY 9 – MARCH 8

Corn has managed to peel off its recent lows despite no major changes in the market. South America’s harvest is moving right along, while the crop appears to be smaller than initially anticipated, the increase in acreage seen will still likely make this a record crop. The March USDA Crop Report gave a little ground in their estimates for South American production of soybeans but slightly raised the estimates for production in Argentina for corn. These changes were inconsequential to any market movement as CONAB numbers this week will be the next data to give the market more direction.

Via Barchart

Soybeans got some good, but not great, news in the USDA report with the USDA slightly lowering the production in Brazil. While many private estimates in South America are still lower than the USDA’s, this shows that the USDA believes the others may be right but are not yet willing to give all their production back. This week’s CONAB numbers will be worth keeping an eye on. Basis has been slowly rising during harvest, hinting at this crop being smaller than expected. Continued gains following Tuesday’s report would be welcome as the further we can put the lows behind us, the better.

Via Barchart

Equity Markets

The equity markets continued their grind higher with a broadening in recent weeks to other names outside of the Magnificent 7. With slower job growth and a slightly higher unemployment rate, the Fed appears to be getting what they aimed for in a soft landing, but inflation is still sticky. The Fed may begin cutting rates in the second half of 2024.

Via Barchart

Other News

  • The stock market continues to make all time highs while AI stocks have driven this rally, some rebalancing appears to be occurring.

Drought Monitor

Here is the current drought monitor as we head toward planting with subsoil moisture a focus.

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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