Category: USDA Report

15 Jan 2023

Agriculture, Corn, Grain, Market Commentary, Market Updates, Other News, Research, Risk Management, Soybeans, USDA Report rcmagserv 0 comment

AG MARKET UPDATE: DECEMBER 30 – JANUARY 13

Corn finished the week strong following the January USDA report. The report had a mix of bullish and bearish news with the USDA raising the yield estimate to 173.3 bu/acre from 172.3 in November. At the same time they cut total production due to lowered harvested acreage while lowering US and world ending stocks. The USDA also lowered production estimates for South America by lowering Argentina yield 3 bu/acre and Brazil 1 bu/acre. Exports were also lowered as a bearish factor with lower usage. The news in the report was slightly bullish for corn and it needed it but there are still many factors around the world that can change. Argentina’s weather remains hot and dry for the next week and many private estimates believe the crop will continue to get lower.

Soybeans participated in the post rally on bullish numbers from the USDA. The USDA lowered bean yield to 49.5 bu/acre, .7 bu/acre lower than November report. The lower yields and lower harvested acres lead to a lower US ending stocks of 210 million bushels. They also lowered Argentina’s bean yield by 4 bushels per acre and raised Brazil’s 1 bu/acre. Beans have been trading higher over the last couple of months and the report did not throw water on it. While any further rallies will be met with farmer selling, South American weather will be the main factor going forward.

Equity Markets

The Dow rallied this week along with other indexes as the market has started off the year on a positive note. CPI came in at 6.5% continuing its trend lower but still well above where the Fed wants it, expect them to continue to raise rates. Recession fears remain with many analysts still expecting one this year in the US and in Europe. Ultimately the market is still looking for a direction as it tries to figure out what comes next.

Drought Monitor

Podcast

With every new year, there are new opportunities, and there’s no better time to dive deeply into the stock market and tax-saving strategies for 2023 than now. In our latest episode of the Hedged Edge, we’re joined by Tim Webb, Chief Investment Officer and Managing Partner from our sister company, RCM Wealth Advisors. Tim is no stranger to advising institutions and agribusinesses where he has been implementing no-nonsense financial planning strategies and market investment disciplines to help Clients build and maintain wealth and reach financial goals since

Inside this jam-packed session, we’re taking a break from commodities, and talking about the world of equities, interest rates, tax savings, and business planning strategies. Plus, Jeff and Tim delve into a variety of topics like:

The current state of the markets within the wealth management industry
Is there a beacon of hope, or is it all doom and gloom for the markets?
Other strategies to think about outside of the stock market and so much 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 Nov 2022

Agriculture, Corn, Cotton, Crude Oil, Dow Jones, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, U.S. Dollar, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: NOVEMBER 4 – 18

Corn strung together several days lower in a row last week with a neutral USDA report in the middle of it. The USDA raised the US yield to 172.3, which was within the range of estimates. While corn had been trading sideways for some time, the move lower remained in its trading range, followed by a bounce back higher this week. The black sea export corridor deal being renewed is welcome news for the world supply chain. Brazil and Argentina got some needed rain while some dry areas missed out. They are still suffering drought conditions, but it is also still early in the year. Exports improved this week from last, as the current price levels attract buyers.

Soybeans fell over the last two weeks, due to two days of large losses this week. Soybean Oil got hit as world veg oil prices fell, pulling beans down with it. The rain in Argentina helped speed up soybean planting but rain will still be needed moving forward as still about 25% of the country experiences drought. Bean exports, like corn, improved and better than expected this week. The lack of news makes this a difficult market to trade in as there are no overwhelming bullish or bearish factors dictating direction.

The US cotton supply was raised in last week’s USDA report with better yields and lower demand. The problem in the cotton market right now is demand. While more money is being spent , fewer units are being bought which translates to less consumption. With the continued high energy prices and inflation issues across the world people are prioritizing eating and heating their homes and fueling their cars (good call) over buying new clothes. The potential for a looming world recession in 2023 does not ease demand concerns as we would not see demand for cotton pick up as producers would sit on inventory they currently have. Until we get more clarity on the world outlook and 2023 it is a time to be cautious. The weakening USD will be worth keeping an eye on.

Equity Markets

The equity markets started off November with gains after a cooler than expected October CPI of 7.7%. While a drop is nice to see it is important to remember the target is 2-3% so we are still much closer to the top than the bottom with a Fed rate rise coming in early December. The markets seem to expect a 50-point hike, but there is still plenty of time for that to change and get priced in before. One big question that remains for the markets looking ahead is “what will December bring?”. Will there be a Santa Clause rally? Will markets fall as investors do some tax loss harvesting? Many investors still think a recession is coming in 2023 and the next month and half could give us a better idea what to expect.

Drought Monitor

Podcast

The Hedged Edge is back online with a guest who could be this podcast’s most important guest of all time. At a time when inflation is running rampant through the world economy, drought conditions are drying up our rivers, and the global supply of grain is scarce. We are tasked with the question, “what the hell is going on in logistics, and is there any relief in sight?”

To help address these questions and more, I am joined today by a man that needs no introduction to most in the physical commodity sector – Woodson Dunavant with the Dunavant Logistics company based in Memphis, TN.

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 Nov 2022

Agriculture, Corn, Cotton, Dow Jones, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, U.S. Dollar, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: OCTOBER 21 – NOVEMBER 4

Corn had small losses on the week again as it has been range bound the last month. The market holding at this level certainly is not a bad thing when it traded $1 lower than current levels in July, it just needs a catalyst to push it one way or the other. The catalyst could be next week’s USDA Report as there could always be a surprise or two for the market. Many estimates see the USDA raising production from the October estimates, but by how much will be the question. Ultimately with US harvest coming to a close and South America ramping up, the global outlook and weather will begin to dominate the markets. The US will also need plenty of moisture over the coming weeks and winter to 1. Raise river levels to help grain exports and 2. Improve subsoil moisture heading into 2023. Exports remain underwhelming and will likely be lowered for the year in next week’s report.

Unlike Corn, Beans have had a much wider range after an initial flat start to harvest have rallied back hard over the past 2 weeks. This move higher is welcome and appears to be heading toward a test of the highs from early September – can it break through? The USDA report will be the big news next week along with any news out of South America for weather and China potentially coming out of zero covid restrictions. Like corn, the USDA will likely raise US production next week and may lower exports. For any sustained move higher China will need to be a regular buyer and South American conditions would need to become less favorable.

Cotton has had quite the week with 4 days that traded limit up at one point. With a lot of speculative positions in the market being short, this could be seen as a short covering rally as specs must exit their positions before expiration. On the physical side, the global cash market is a mess. Mills have massive inventories of both cotton and converted goods with no companies buying. The lack of buying by apparel companies shows their concern for the holiday season as inflation and market uncertainty will weigh on spending this year.

Equity Markets

The equity markets have gained over the last 2 weeks; however, gains were muted after the Fed raised rates another 75 points earlier this week. This was expected but the comments by chair Powell after they came out were more hawkish than expected setting up an interesting point in next month’s meeting. Powell said the Fed is not likely to slow down yet setting up the potential for another 75 points in December, while analysts were leaning towards 50 before he spoke. The unemployment rate did tick higher in October while many companies also announced hiring freezes and grim outlooks for the first half of 2023. Crude oil spiked back above $90 a barrel on Friday continuing to bolster energy stocks. Midterm elections next week will also be closely watched as it may lay out what, if anything, will be done over the next 2 years.

Drought Monitor

Podcast

Are the Fed’s hikes starting to dampen inflation? Oil, grains, and metals have all fallen from their highs. But the rarely spoken of Cotton market was one of the first to crack…falling from 1.58/lb to 0.95/lb in just a few short days. We’re digging into this sharp drop and just why and how Cotton is involved in seemingly everything with RCM’s very own cotton king, LOGIC advisors Ron Lawson.

In this episode, Ron is giving us the low down on how and why he believes it’s not Dr. Copper which acts as the global economic barometer, but how Cotton is the real Canary and leading indicator on global demand. In between those talks, we’re covering all things Cotton including crop insurance, irrigated vs dry land, the scam that was Pima and Egyptian Cotton, the process of cotton – which countries have it, which want it, ginning it, spinning it, dyeing it, global commodity merchant co’s pushing it around, and even micro-plastics, climate change, and how Cotton always flows to the cheapest labor source. Finally, we’re walking in some high Cotton putting Ron in the hot seat. Will we ever get the growth back? Tune in to get these critical hot takes — SEND IT!

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 Oct 2022

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

AG MARKET UPDATE: OCTOBER 7 – 14

The USDA report this week did not make any major changes to the US corn crop estimating a yield of 171.9 bushels per acres, down .6 bu/ac from September. The lack of surprises in the report kept corn trading along its path of late with no major losses or gains. The ending stocks were raised on lower demand with a high USD and world recession fears looming. While the balance sheets remain tight for corn but the recession fears lowering demand eases the balance sheet worries, for now. Harvest is still rolling along with much of the US experiencing drought conditions and no major rains in the forecast for many areas to slow it down much.

Beans were the surprise of the report with estimated yields falling to 49.8 bu/ac, down 0.7 bu/ac from the September report. US ending stocks were also cut with the yield lowering getting an appropriate reaction higher aster the report. The main concern for beans right now is low demand and the potential of a record Brazil bean crop. The strong USD weighs on bean exports with China being slow buyers, as we have said before to start feeling better about the direction of beans’ price, we need China to show up more often in larger quantities.

Cotton continued lower this week following the USDA report that saw a bearish reaction despite lower production estimates. Cotton is still fighting the supply vs demand issue to figure out where to go. Right now, the demand, or lack thereof, is winning as prices have been moving lower over the last 2 months. World recession fears impact the demand for cotton with lower demand balancing the lower production. The lack of demand makes it difficult to see a sizeable move higher in the near term but for cotton to be planted in areas that could grow corn and soybeans these price levels will not be attractive. We could potentially see a sideways trade until there is more certainty economically (demand) going forward.

Equity Markets

The equity markets were positive this week due to a massive rally on Thursday to gain back the week’s losses and some. Inflation came in hot, again, this week giving the Fed the go ahead to raise rates another 75 basis points in November if they want to with a 15% chance of a 100 point raise. The market rallied on the CPI number, despite it being high, showing that there is still room for bounces in a bear market. It is hard to find much good news in the market with the proposed deal between the Biden administration and Rail workers unions falling apart this week as well, bringing the possibility of shutdowns back.

Drought Monitor

The drought monitor below shows where we stand week to week. As you can see much of the country is in drought conditions and will need moisture over the winter.

Podcast

Are the Fed’s hikes starting to dampen inflation? Oil, grains, and metals have all fallen from their highs. But the rarely spoken of Cotton market was one of the first to crack…falling from 1.58/lb to 0.95/lb in just a few short days. We’re digging into this sharp drop and just why and how Cotton is involved in seemingly everything with RCM’s very own cotton king, LOGIC advisors Ron Lawson.

In this episode, Ron is giving us the low down on how and why he believes it’s not Dr. Copper which acts as the global economic barometer, but how Cotton is the real Canary and leading indicator on global demand. In between those talks, we’re covering all things Cotton including crop insurance, irrigated vs dry land, the scam that was Pima and Egyptian Cotton, the process of cotton – which countries have it, which want it, ginning it, spinning it, dyeing it, global commodity merchant co’s pushing it around, and even micro-plastics, climate change, and how Cotton always flows to the cheapest labor source. Finally, we’re walking in some high Cotton putting Ron in the hot seat. Will we ever get the growth back? Tune in to get these critical hot takes — SEND IT!

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].

07 Oct 2022

Agriculture, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Risk Management, Soybeans, U.S. Dollar, USDA Report, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: SEPTEMBER 30 – OCTOBER 7

As you can see in the chart below the relatively sideways trade continued this week. Harvest is rolling along, about 20% done at the start of the week, with no issues across much of the country as most areas are experiencing drought conditions. The upcoming USDA report on Wednesday will update US and South American estimated yields. The low river levels from lack of rain are starting to cause bottlenecks and problems for exports. Elevators may ask farmers to delay delivery until they know they will be able to ship it out of their facility. A continued strong US Dollar will continue to weigh on export demand.

Beans were relatively flat this week but are still much lower than the highs from last month. Beans have struggled on lack of exports and relatively strong yields. The strong USD and barge situation is hurting bean export demand same as corn. China will be coming out of their week long market shut down on Sunday and hopefully we will see them as buyers more regularly in larger quantities. Harvest was 22% complete this week, off to a great start. The bean market is more vulnerable than corn at this point with less supportive news and poor technical.

Equity Markets

The markets had a nice two-day rally before losing a solid chunk of those gains heading into the weekend. The hard sell off on Friday was fueled by the strong jobs report. While a strong job report sounds like a good thing, it is one of the indicators the Fed has been using when deciding to raise rates and this would incline them to raise again instead of slowing down. There is not a lot of good news in the market right now with many analysts seeing more downside, while a few thinks this most recent bounce may have put in a good floor.

Drought Monitor

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

Podcast

Are the Fed’s hikes starting to dampen inflation? Oil, grains, and metals have all fallen from their highs. But the rarely spoken of Cotton market was one of the first to crack…falling from 1.58/lb to 0.95/lb in just a few short days. We’re digging into this sharp drop and just why and how Cotton is involved in seemingly everything with RCM’s very own cotton king, LOGIC advisors Ron Lawson.

In this episode, Ron is giving us the low down on how and why he believes it’s not Dr. Copper which acts as the global economic barometer, but how Cotton is the real Canary and leading indicator on global demand. In between those talks, we’re covering all things Cotton including crop insurance, irrigated vs dry land, the scam that was Pima and Egyptian Cotton, the process of cotton – which countries have it, which want it, ginning it, spinning it, dyeing it, global commodity merchant co’s pushing it around, and even micro-plastics, climate change, and how Cotton always flows to the cheapest labor source. Finally, we’re walking in some high Cotton putting Ron in the hot seat. Will we ever get the growth back? Tune in to get these critical hot takes — SEND IT!

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].

30 Sep 2022

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

AG MARKET UPDATE: SEPTEMBER 15 – 30

What a day…what a week for grain market volatility! With the anticipated shrinking US Corn crop, Corn has been moving higher over the last few weeks and today did not disappoint. The Sept 30 USDA report was bullish for corn coming in with quarterly stocks of 1.377 billion bushels. This was below the trade estimate (by roughly 1.6 bu/ac), giving corn prices a boost. The charts remain range bound but are starting to look more bullish. The October USDA report is in 2 weeks and is sure to have some surprises, be prepared for the volatility ahead and take advantage of rallies to catch up on sales.

Beans have not had any good news over the last 2 weeks as they continue lower into harvest. Friday’s report did nothing to help this, having 274 million bushels in quarterly stocks where the average trade estimate was 242 M/bu. While exports for beans have been slow, this number was much higher than expected and beans had an appropriate reaction lower. With a stronger USD vs international currency, there is limited expectation of any major export news in the near future. While beans are still about $1 higher than the July lows, there is little hope that additional supportive news around beans is coming to bail out the bulls…higher stocks reported today, Brazil off to a great start to their planting, and limited exports…Bears win (not talking about the @Chicagobears).

Wheat has had a good run since the August lows and received more bullish news in today’s USDA report. Wheat stocks came in below estimates at 1.650 billion bushels (1.778 billion estimate). The tight world wheat stocks are supportive for prices, along with the continued war in Ukraine. Any developments in the Black Sea trade corridor would add volatility to the grain markets, specifically wheat. Beyond the unknown factors of war sixty four percent of US winter wheat production is in areas that are currently experiencing moderate to exceptional drought. In this case the Bulls are the clear winners (not the @Chicagobulls).

Equity Markets

The markets were decimated in September with inflation not cooling off, increasing US & global recession fears and continued Fed rate hikes. There is no way around it, the news for the markets has been horrendous, with unemployment numbers remaining the limited good news. The S&P blew through the June lows today and is set to finish the quarter down -4.7% and the YTD down approximately – 24.8%. It’s anyone’s guess from there where the FED will go next; but as of now, they are set to continue to raise rates adding additional pressure to capital markets.

Drought Monitor

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

Podcast

Are the Fed’s hikes starting to dampen inflation? Oil, grains, and metals have all fallen from their highs. But the rarely spoken of Cotton market was one of the first to crack…falling from 1.58/lb to 0.95/lb in just a few short days. We’re digging into this sharp drop and just why and how Cotton is involved in seemingly everything with RCM’s very own cotton king, LOGIC advisors Ron Lawson.

In this episode, Ron is giving us the low down on how and why he believes it’s not Dr. Copper which acts as the global economic barometer, but how Cotton is the real Canary and leading indicator on global demand. In between those talks, we’re covering all things Cotton including crop insurance, irrigated vs dry land, the scam that was Pima and Egyptian Cotton, the process of cotton – which countries have it, which want it, ginning it, spinning it, dyeing it, global commodity merchant co’s pushing it around, and even micro-plastics, climate change, and how Cotton always flows to the cheapest labor source. Finally, we’re walking in some high Cotton putting Ron in the hot seat. Will we ever get the growth back? Tune in to get these critical hot takes — SEND IT!

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].

16 Sep 2022

Corn, Grain, Market Commentary, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: AUGUST 26 – SEPTEMBER 15

Corn has been moving higher since late July with yields being lowered in many areas and supply concern. The USDA report from Monday lowered the estimated US yield forecast to 172.5 bu/ac from the 175.4 bu/ac in August. Most private estimates are in the low 170 range, so it was nice to see the USDA start to agree with everyone that the crop just is not there this year. US and world ending stocks for 22/23 were both lowered as well but the world ending stocks were at the higher end of estimates. The prediction is that South America will have another record crop to take pressure off the disappointing US year. If South America has issues however, world balance sheets could get tight. Ethanol demand/production dodged a bullet this week as rail workers are likely to avert a strike (the large majority of ethanol is moved via rail). Energy markets have also pulled back as recession fears and global slowdown remains in the headlines.

Beans had the surprise of the report with the USDA lowering the US bean yield estimates to 50.5 bu/ac from 51.9 bu/ac in August. Many estimates believe this to be a great US crop to this point. Seeing the USDA lower the estimates was a shock and beans shot up +76 cents on Monday as a result. The lower bushel estimate lowered the US and world ending stocks for 22/23 as well. The trading days following the report have lacked additional bullish news and remain under pressure on Friday as exports remain lackluster. Soybeans need to find buyers, looking at you China!, for the bull case to have more ground to stand on. US prices are still expensive in the world marketplace suggesting we could see a pullback met with some buying. The late heat across the Midwest expected in the next couple weeks will put pressure on beans finish; however is helping with drying corn.

Cotton has been an interesting commodity to watch over the past few months with of the widest trading ranges in recent memory (51 cents!!). The US production will be low as most dryland in Texas has been zeroed out and will produce 0 (ZERO) bales. For the supply side this is bad news and adds to the already tight global supply. The demand side is littered with it’s own pressures – world recession fears loom, a strong USD (difficult for exports), and continues supply chain issue… the main Demand Theme = “It doesn’t matter how small the crop is is no one wants it”. When a tight supply market meets a low demand market, the next question is “what gives first?” a recession would lead to the demand market winning the race to the bottom.

Equity Markets

This time last week, the equity markets were bounding higher and all appeard to be clear for the bulls to win the race to the end of the year. Fast forward 7 days and equities are struggling on the heals of poor consumer data and higher than expected inflation (wait…this is not new!). Tuesday was one of the worst days since 2020 with the markets down sharply across the board leaving investors gasping for air. Historically, September and October are two of the most volatile months of the year…the first few trading days in September have not disappointed… button down the hatches for the days and weeks ahead…managing risk will be paramount.

Drought Monitor

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

Podcast

Are the Fed’s hikes starting to dampen inflation? Oil, grains, and metals have all fallen from their highs. But the rarely spoken of Cotton market was one of the first to crack…falling from 1.58/lb to 0.95/lb in just a few short days. We’re digging into this sharp drop and just why and how Cotton is involved in seemingly everything with RCM’s very own cotton king, LOGIC advisors Ron Lawson.

In this episode, Ron is giving us the low down on how and why he believes it’s not Dr. Copper which acts as the global economic barometer, but how Cotton is the real Canary and leading indicator on global demand. In between those talks, we’re covering all things Cotton including crop insurance, irrigated vs dry land, the scam that was Pima and Egyptian Cotton, the process of cotton – which countries have it, which want it, ginning it, spinning it, dyeing it, global commodity merchant co’s pushing it around, and even micro-plastics, climate change, and how Cotton always flows to the cheapest labor source. Finally, we’re walking in some high Cotton putting Ron in the hot seat. Will we ever get the growth back? Tune in to get these critical hot takes — SEND IT!

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 Aug 2022

Agriculture, Corn, Grain, Market Commentary, Market Updates, Other News, Risk Management, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: JULY 28 – AUGUST 12

Corn had had a good couple weeks heading into the August USDA report which gave updated ending stocks and yield numbers. The USDA lowered yield to 175.4 bu/acre from 177 in July (average estimate pre-report has 175.9). They raised old crop ending stocks but lowered 22/23 US and world ending stocks. Corn was rated 58% good/excellent this week, dropping 3% nationally from last week to help add bullish news to the corn market. The next month of weather will be important for kernel fill as the weather remains uncertain with some areas expecting hot and dry with others more seasonal weather in the ECB. Seeing world demand pick up would help corn whether it be China, ethanol demand, whatever it is the markets will gladly accept it.

Beans have made small gains over the last 2 weeks and rallied after the report following an initial reaction lower. The initial reaction lower was due to the surprise of a higher yield with the USDA estimating the US crop at 51.9 bu/acre, well above the pre report estimates of 50.4. The slow export pace was also factored into the larger ending stocks but could speed up as beans out of the PNW to Asia are very competitive in the world market. The would be record yield still has ways to go with August and September weather still having mixed expectations.

Cotton

Cotton was limit up after several up days following the report as the US’ crop continues to shrink with abandonment expected to continue to grow. 1.8 million bales ending stocks would be one of the lowest on record since 1960 and potentially problematic with world demand if we avoid a worldwide recession.

Russia and Ukraine

Vessels carrying grain have left Ukraine but the first cargo was not accepted due to quality concerns at its intended location. While the grain was sitting for a long time this is not surprising as the quality was always going to be a concern. The newest problem is the Zaporzhye nuclear power plant, with the UN Security Council meeting to discuss what needs to be done to make sure there is a not a “catastrophe on a scale much greater than the consequences of the accident at the Chernobyl nuclear power plant”.

Equity Markets

The equity markets have seen a strong and steady rally higher with consumer sentiment rising. CPI came in at 8.5% again this month so the positive is it did not go up from last month, the negative is it is still at 8.5% YOY so this number will need to start going down before there is too much confidence we have peaked with the Fed still raising rates. Production at several offshore drilling sights were paused for a short period this week while a problem was fixed causing some volatility in the energy sector.

Drought Monitor

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

Podcast

Are the Fed’s hikes starting to dampen inflation? Oil, grains, and metals have all fallen from their highs. But the rarely spoken of Cotton market was one of the first to crack…falling from 1.58/lb to 0.95/lb in just a few short days. We’re digging into this sharp drop and just why and how Cotton is involved in seemingly everything with RCM’s very own cotton king, LOGIC advisors Ron Lawson.

In this episode, Ron is giving us the low down on how and why he believes it’s not Dr. Copper which acts as the global economic barometer, but how Cotton is the real Canary and leading indicator on global demand. In between those talks, we’re covering all things Cotton including crop insurance, irrigated vs dry land, the scam that was Pima and Egyptian Cotton, the process of cotton – which countries have it, which want it, ginning it, spinning it, dyeing it, global commodity merchant co’s pushing it around, and even micro-plastics, climate change, and how Cotton always flows to the cheapest labor source. Finally, we’re walking in some high Cotton putting Ron in the hot seat. Will we ever get the growth back? Tune in to get these critical hot takes — SEND IT!

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].

15 Jul 2022

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

AG MARKET UPDATE: JULY 8 – 14

Corn had a volatile week suffering losses to drop back to levels it saw at the start of last week. The USDA report on Tuesday this week wiped out the gains from last week after a bearish report. Ending stocks came in higher than expectations, not by much, but enough to be bearish. The recession fears affect every market and corn is no different as ending stocks will grow as less ethanol is produced and other uses will lower. The weather is the bullish factor in the market right now with hot and dry conditions expected across much of the corn belt during pollination. The longer this weather outlook stays, the more bullish it will become as yields struggle. Russia says they have agreed to a safe export corridor for Ukrainian grain.

Soybeans took it on the chin post report just like corn. While the report numbers were not overly bearish the loss in crude oil and soy oil prices have weighed on beans lately. The weather issues for corn are not as big a concern for soybeans (yet) but will be something that could come up in the future. South American yields are still hard to get a full picture of with the USDA still differing from many estimates. China canceled a bean purchase on top of a poor export report for the week.

Cotton has continued its move lower despite widespread abandonment in west Texas. This comes from the expect of demand destruction with a potential worldwide recession ahead and producers sitting on plenty of supply. Prices could be even worse if the US was having a good growing season, but the demand destruction along with a very strong US dollar does not help cotton. With the loss of many hedgers in the market due to the loss of crop, specs will be the market mover, trading on technical indicators, not fundamentals, for the foreseeable future and will decide the direction with mills on the sidelines too.

Equity Markets

The equity markets continue their game of “recession or not” with the up and down trade. Another hot CPI number of 9.1% came in this week, the market was expecting it to be in the high 8s so this was still a bad number. While commodity prices have come down other areas of the market remain painful. Earnings this week were disappointing for banks kicking a market that was down and needed some positive news. The market will continue this back-and-forth game until everyone decides we are in the clear or the recession is unavoidable.

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].

08 Jul 2022

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

AG MARKET UPDATE: JULY 1 – 8

Corn bounced back to end the week after a brutal start. Corn was pressured to start the week with rain this week across large areas and recession fears that would lower demand for fuel and ethanol as energy prices started the week off poorly. Funds over the past couple weeks were unloading some positions as well but that looks to have slowed to end the week with some getting back in. The bounce back to end the week looks to be partly driven by hot and dry weather expecting to get back to the western corn belt next week and slowly continue east. The July USDA report will be released Tuesday July 12^th and will be the next major news that could affect the market.

Soybeans have traded like corn and on relatively the same news of weather and fund liquidation. The rain in the Midwest to start the week pressured beans lower while Chinese purchases were rumored to switch to Brazil. The drier outlook over the next couple weeks after this weekend will pressure beans after the last USDA report lowered acres considerably. The move after the last couple weeks following the report that lowered acres by over 2 million did not really match up and left many scratching their heads. Tuesday’s report may shed some light on the direction moving forward and what we need to keep an eye on.

Equity Markets

The equity markets had a fairly level week with some up and down days. The Fed minutes were close to a nonevent as the markets didn’t react. The Fed will probably raise rates by 75 points again in July but their guidance on what will happen after will be important to help recession and inflation fears.

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].

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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.