RCM Ag Services

Category: USDA Report

12 Oct 2021
Agriculture, Corn, Grain, Market Commentary, Market Updates, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: SEPTEMBER 30 – OCTOBER 12 USDA REPORT

Corn had been in neutral heading into the October 12th USDA yield report, seeing bearish numbers. The report raised yield to 176.5 bushels per acre, slightly higher than the report last month. U.S. ending stocks and world stocks were both raised while also raising exports, lowering feed and residual use. The somewhat disappointing yields in the eastern corn belt were offset by better-than-expected western corn belt/plains yields. Demand looked to be lowered due to the continued export issues out of New Orleans since the hurricane, and a record crop in China won’t require them to import as much. The season-average corn price received by producers was left unchanged at $5.45. A higher yield and supply is bearish news, but the numbers do not appear to have been bearish enough to where we will retest harvest lows anytime soon. The cash market will continue to give us an idea of how much corn is actually out there, along with private estimates as harvest rolls on.

Via Barchart                        Soybeans have  been struggling the last couple of months, and the previous two reports have not done them any favors. As you can see in the chart below, it has been tough sledding since early June for beans. The USDA raised yields to 51.5 bushels per acre, up from the September report. The feeling that the U.S. bean crop was getting bigger with the good late-season weather came to fruition in the report. World stocks were also revised higher, creating another bearish concern. Without demand from China or a problem in South America, there aren’t many bullish factors for beans. If either China demand or SA weather turn in favor of the U.S., we could see some support, but until then, there is not much helping the market.

Via Barchart

USDA Report

The report covers many areas of the agriculture landscape. If you would like to view the full report or look at something else not covered, here is the link.

Dow Jones

The Dow bounced back this week following the rough end of September. Congress agreed to pass a short-term agreement to keep the government funded until December. There was a small amount of worry in the markets as the deadline loomed, but the same concern will return in 2 months when they need to pass a long-term plan and a debt limit adjustment. Any bounce back after a significant drop is good to see to level everyone’s heads.

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 U.S. drought monitor and the comparison to it from a week ago. The outlined areas in black are areas that the drought will have a dominant impact.

Via Barchart.com

01 Oct 2021
Agriculture, Corn, Cotton, Grain, Market Commentary, Market Updates, Podcast, Research, Soybeans, USDA Report, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: SEPTEMBER 23 – 30

Corn took it on the chin upon the release of Thursday’s USDA report before bouncing back to finish only slightly lower on the day, but still up on the week. The report may have left more questions than answers hanging around as they raised ending stocks, but as we mentioned last week, the current basis and cash markets hint there may be less corn out there than the USDA believes. Corn stocks came in at 1.236 billion bushels, which was higher than the average estimate going in. Harvest was 18% done at the start of the week, and further progress will have been made with favorable harvest conditions. Exports this week were not great for corn, while beans were strong. The next major report for corn will be the October 12th yield update. With harvest getting off to a fast start, it will be interesting to see if the private estimates and USDA are closer to each other than usual this far in.

Via Barchart                         

Soybeans fell post report as estimates were well lower than the USDA number of 256 million bushels. The average estimate was 174 million bushels which caused the immediate and lasting drop following the report. Obviously, nobody saw this number coming as it was well higher than the highest estimates. It is now time for the market to decide if they believe that number leading up to the October 12th yield report. Beans had great exports this week, but that was not enough to fend off the bears with the report. All the losses for beans on the week came from the report, as it had been pretty flat until Thursday. Soybeans harvested at 16% and will continue like corn this week. Like corn, the October 12th yield update will be critical as harvest has progressed further and we have a better idea of the crop.

Via Barchart

Cotton has been on a great run the last two weeks as you can see in the chart below. Cotton busted through several technical indicators in the 97 cent range while also clearing the 99.47 high from January of 2012. China has started to inquire about purchasing cotton as many companies look to import cotton and no longer use cotton from Xinjiang. Ultimately this is a supply/demand driven rally from strong global demand and uncertainty about the crop until it is out of the ground. Forecasts for rains in West Texas this weekend are not helpful for the crop and could cause issues depending on how much it does rain. Even with further upside potential to the cotton price this is a good opportunity to set floors to take advantage of this run up. As always look at your production and make the informed decision that applies specifically to your operation and not a cookie cutter plan.

Note: Since the writing above, Cotton has now topped 105 with December 2021 Cotton touching 107.28 on what seems to be a made rush of continued buying…. hold on to your hats!

Via Barchart

Wheat

Wheat saw a post-report rally as all wheat stocks came in at 1.780 billion bushels, which was below the pre-report estimates. Keep an eye on Russia as the export tax on Russian wheat will cut acres from their regular planting and could play out in the US wheat market as well.

Dow Jones

The Dow struggled again this week as September proved to be the worst month for stocks since March 2020, when Covid hit. Rising treasuries and interest rate hikes in the future had some to do with it, but September historically is not a great month for performance. One bad month in the span of a year and a half should not ring the alarm, but it will remind everyone that stocks can go down.

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 potentially fight the recent blaze of volatility surrounding agriculture markets.

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 outlined areas in black are areas that the drought will have a dominant impact.

Via Barchart.com

 

 

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

 

 

13 Aug 2021
Corn, Grain, Market Commentary, Market Updates, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: AUGUST 5 – 12

Corn saw large gains following the USDA report on Thursday before finishing the day well off the highs. The USDA cut expected yield to 174.60 bu/acre from 179.5 in the July report. The USDA also lowered Brazil’s crop yield by 6 million tons to 87 million and some estimates believe it will still be lower than that. The combination of these two yield cuts cut the world ending stocks for the 21/22 year by over 6.5 million tons which shows a slightly lower demand as well.

The report this year cut yield expectations much earlier than in the past which is what surprised the market as we usually get adjustments after the fact. Brazil will probably see another cut in their production down the road where the USDA left the possibility of raising the US production in the future by making such a drastic cut. The drought monitor at the bottom shows current conditions and although it is slightly improved from last week but as you have seen the plains have had a brutal stretch.

Via Barchart                       

Soybeans had more of a mixed report but still gained following the report while finishing well off their highs. The USDA pegged the bean crop at 50 bushel per acre but cut demand by raising world ending stocks. As the demand from China has slowed from the torrid pace to start the year that fueled the run up in price the demand has been quiet recently. With improving weather conditions coming down the stretch the US bean crop is in good shape with the possibility to improve. The world supply is snug but not critically tight so there is more wiggle room for beans than corn currently.

Via Barchart

Dow Jones

The Dow gained on the week as strong earnings continue to come through with the normal names leading the way. The Biden administration’s Infrastructure plan will become more a story as more exact details come out but will provide areas of growth.

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 the continued drought conditions in the northern Midwest that reaches into the Canadian planes while it has also improved since last week.

 

Via Barchart.com

16 Jul 2021
Corn, Grain, Market Commentary, Market Updates, Other News, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: JULY 8 – 15

Corn rallied this week following Monday’s USDA report that was relatively neutral. The USDA left expected US yield the same while slightly lowering the 20/21 ending stocks and raising the 2021 production. The USDA did lower Brazil’s corn production numbers, but some estimates still think they are overstating what it will be. The USDA dropped Brazil’s corn production from 98.5 million tons to 93 million, while only raising Argentina’s 1.5 million. The drought conditions persist in the upper Midwest as some areas are expected to get rain over the weekend. The drought in the Canadian prairies and Dakotas does not have any major relief in the forecast as heat and dryness remains in the next weeks forecast. Exports this week were small but not surprising. Weather continues to be the main driver as markets will react to where it rained and how much over the weekend to start next week. Currently about 36% of the US corn production is in an area experiencing drought. As you can see in the drought monitor below northern Iowa and southern Minnesota is a good amount of that.

Via Barchart                          

Soybeans gained on the week as well following the USDA report. There was no adjustment to expected yield and only slight adjustments higher to ending stocks. Beans kept up their momentum following the report for the week before cooling off Thursday. It will be important how they end the week and open Sunday to set the tone for next week. Weather continues to be the main market mover as it will be important heading into the end of July and August. About 31% of the soybean production is in an area currently experiencing drought so any and all rain will be welcome for the crop but the price will be impacted as well.

Via Barchart

Dow Jones

The Dow gained on the week despite growing inflation concerns and Powell’s comments about Fed strategy. The Biden administration’s child tax credit has arrived as well with it going into effect this week. The Delta variant continues to spread around the US with some places beginning to bring back mask requirements.

Podcast

Check out our recent podcast with Dr. Greg Willoughby: We’re talking with Greg in the new episode about being a “plant doctor”, weather patterns, GMO & organic produce, crop history, technical advances, level 201 education on agronomy, the agronomy equation, Helena Agri, soil biology, American v European agriculture, Greg’s early background in livestock, and the advancement of native plants to modern produce.

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

US Drought Monitor

The maps below show the current drought conditions in the US. The second map is last week’s so you can see how the areas that received rain improved or did not.

Via Barchart.com

 

 

02 Jul 2021
Agriculture, Corn, Grain, Market Updates, Other News, Soybeans, USDA Report, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: JUNE 18 – JULY 1

The USDA Acreage report was released this week and was bullish for corn. Planted acres came in @ 92.70 million acres, which was below the average estimate of 93.787 million. June 1st stocks were also slightly lower than estimates coming in at 4.112 billion bushels. For the second year in a row the USDA came out with less planted acres than pre-report estimates. There was also a note at the start of the report saying there are still 2.18 million acres intended to be planted during the survey time of May 29-June 17. This means that the 92.70 million number may end up being lower as odds are not all the 2.18 million acres got planted. This combined with the lower stocks gave corn a big boost as Dec’ 21 futures went limit up post report.

This is the last major market moving report (historically) of the summer, which means we are now in a weather market for the time being. The upper Midwest is still very dry and needs relief as you can see in the drought monitor chart at the bottom.

Via Barchart                       

Soybeans, like corn, saw big gains following the release of the acreage report. Planted acres came in at 87.6 million acres, below the average estimate of 88.955 million. The June 1st stocks were also lower than estimates coming in at 767 million bushels, 20 million lower than the average estimate. Beans had a similar post report reaction to corn because the bullishness of the numbers were similar. With acres and stocks both being smaller than anticipated this will put pressure on the crop and weather during August will be very important for not only the crop but also the price.

Via Barchart

Wheat had a neutral report but followed corn and soybeans higher after. Wheat looks to be forming a bottom on the charts but July weather is still critical for the plains/Canadian wheat crop. Wheat struggled lower on Thursday as they had their own trade and did not follow the lead of corn and soybeans. Weather this month will be important for the crop as we are also in a weather market for wheat too.

Via Barchart

Dow Jones

The Dow gained on the week as all major indexes had a good week as trade continues to be getting back to normal following the covid lockdown of the last year. The Dow closed out the month strong after seeing major weakness the first half of June.

Lumber

Lumber prices have continued their slide down and are back in the 700s after trading into the mid 1700s in early May. The pressure on the market looks to continue as the downturn has been sharp.

Podcast

Check out our recent podcast with Dr. Greg Willoughby: We’re talking with Greg in the new episode about being a “plant doctor”, weather patterns, GMO & organic produce, crop history, technical advances, level 201 education on agronomy, the agronomy equation, Helena Agri, soil biology, American v European agriculture, Greg’s early background in livestock, and the advancement of native plants to modern produce.

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

US Drought Monitor

The map below shows current drought conditions and the continued problems in the upper Midwest and continued sever drought in the western US.

  

Via Barchart.com

 

 

11 Jun 2021
Agriculture, Corn, Cotton, Grain, Lumber, Market Updates, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: JUNE 4-11

Corn had another good week that was made better following the bullish news in Thursday’s WASDE report. At the start of the week corn planting was seen as 91% complete with little progress being made from last week but at this point in the process limited progress is expected. The dryness in the Midwest and other areas of the corn belt can be seen in the drought monitor below. The USDA agreed with what many in the industry have been saying by reducing US and world ending stocks.

20/21 US ending stocks was adjusted down to 1.107 billion bushels from 1.257 in the May report while 21/22 ending stocks were adjusted down to 1.357 billion bushels from 1.507 in May. World ending stocks for 20/21 were lowered to 280.60 million tonnes from 283.53 while the 21/22 was also lowered to 289.41 million tonnes from 292.30. There is still a disconnect between the USDA and the public on what’s going on in South America and the size of their crop. Word on the street is that it has been shrinking as weather woes caused issues but the USDA does not have them down nearly as much in this report.

Now that growing season has started weather and specifically where it does and does not rain will be the main price driving factors.  The upper Midwest is dry but the delta just got torrential rains this week and areas in Indiana and Ohio have been soaked too. The rain in the Dakotas and Iowa to end the week will help but still need rain over extended periods to get back to good growing conditions.

Via Barchart

Soybeans slipped a bit on the week but are still hanging on inside the recent range. Bean news has been quiet as of late with no market specific news, unlike corn. Soybean planting was seen as 80% complete to start the week with some continued progress to be made. The USDA WASDE report was more bearish for beans than corn but markets responded well after.

The 20/21 US ending stocks were raised from 120 million bushels to 135 million and the 21/22 ending stocks were raised form 140 million to 155 million bushels respectively. These were both still within trade estimates so no major shock with the US or the world stocks. The 20/21 world ending stocks were raised from 86.55 million tonnes to 88 million and the 21/22 ending stocks were raised from 91.10 million to 92.55. Raising the stocks month over month is usually bearish and old crop took a hit while new crop rallied on the report.

Markets moved lower Friday with rain coming in some much needed areas heading into the weekend.

Via Barchart

Cotton has seen modest gains this week after soaking rains and flooding in areas of the Delta. The WASDE report this week showed the expected directionally bullish revisions. There were no major surprises, but their numbers may be hinting at a continued decline in production going up against the rising levels of global consumption. The USDA projections for 21/22 show a 100,000 bale increase in exports from last month to 14.8 million bales. As exports continue to be strong for the 20/21 crop ending stocks were lowered 200,000 bales to 2.9 million ending stocks. Global ending stocks were lower as well with consumption rising.

Via Barchart

Dow Jones

The Dow lost slightly on the week as news was slow with no major market news or movers. Covid openings continue as numbers continue to decline in the US while there are still problems around the world.

Lumber

Lumber prices have dipped recently but are still at very high levels historically. Check out our recent post about the lumber market and what all has been going on.

Podcast

Check out our recent podcast with Dr. Greg Willoughby: We’re talking with Greg in the new episode about being a “plant doctor”, weather patterns, GMO & organic produce, crop history, technical advances, level 201 education on agronomy, the agronomy equation, Helena Agri, soil biology, American v European agriculture, Greg’s early background in livestock, and the advancement of native plants to modern produce.

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

US Drought Monitor

The map below shows current drought conditions and the continued problems in the upper Midwest. More drought conditions have crept into southern Iowa and parts of Nebraska in the last week. Heat over the next two weeks will be a problem in the Dakotas and western corn belt.

Via Barchart

 

05 Apr 2021
Agriculture, Corn, Cotton, Grain, Market Commentary, Market Updates, Podcast, Soybeans, U.S. Dollar, USDA Report rcmagserv 0 comment

March 2021 Quarterly Stocks and Planting Intentions Report: The Hedged Edge

The USDA came out with a bullish report???!!!! It’s fair to say that many in the industry (us included) were left speechless. We know that 2020 was a crazy ride for commodities, but it looks like we may be in for an even WILDER ride on the opposite end for 2021. To discuss this bullish report, we’re joined by our two favorite RCM Ag Services Cotton and Grain experts, Jody Lawrence and Ron Lawson, to discuss how this recent report is bound to affect the markets/insurance premiums/loan opportunities and much more in the coming months.

Find the full episode links for The Derivative below:

 

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: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit www.rcmalternatives.com/disclaimer

26 Mar 2021
Agriculture, Corn, Cotton, Market Commentary, Market Updates, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

Ag Market Updates: March 20 – 26

Corn struggled to get any momentum going this week, despite having better than expected exports. Corn, like other commodities, has struggled as funds begin to reposition in a “rising interest rates” environment and a strengthening US dollar. There has not been any news out of South America that is either bullish or bearish for corn and it is likely to stay that way into next week. The prospective plantings report on Wednesday is  major and we expect the market news to be relatively calm as everyone holds their breath for next week. This report always has the potential to pull the rug out from under the market, so positioning yourself ahead of it will be important as well as considering some new crop sales as prices are still very good in case the report is bearish.

Via Barchart

 

Soybeans had slight gains on the week as they continue to trade in the same range of the last few weeks. Even though it looks like beans have flattened out on the chart, we are still about 50 cents better than we were on Feb 1st . So even though beans have slowed down compared to Aug-Jan, we still have seen a good last 2 months even if it looks like the momentum is slowing down. Exports were good again this week and there was little changed in the world weather outlook, so beans have been at the mercy of traders and not the fundamental news moving the markets. Wednesday’s report, like with all markets, will be an important measuring stick on beans as we see the acres as well. As it is expected, the USDA will lower ending stocks as exports continue to be strong and ahead of the USDA predicted pace. As always, the USDA can surprise everyone so be prepared for the unexpected and plan accordingly.

Via Barchart

The cotton market got hammered this week capped off by a limit-down movement on Thursday. The cotton market is being moved by the funds and quants as what we are seeing in all other markets is affecting cotton. The fundamental news about cotton is rather bullish as pressure continues to be put on the CCP and cotton coming out of Xinjiang. The exports this week were higher than anticipated as well as large sales going to Vietnam, China, and Turkey pushing cotton higher. With the acreage report next week it is expected that about 40% of the US cotton crop will be planted in West Texas (which is suffering from very bad drought conditions) which will affect planting unless there is a major shift in weather. Cotton will also likely lose some acres to other crops in areas that can grow variety as December soybean and corn prices are much more attractive. The increase in demand coming to the US market along with what could be a very challenging growing season for many areas could lead to a high demand low supply environment.

Via Barchart

Dow Jones
The Dow suffered some losses on the week as the markets leaked lower after a couple of weeks of gains. The vaccination problems in Europe mixed with uncertainty about rates continue to hover over the market. All major indexes were down this week with the Dow as all eyes turn to what the Biden administration has planned in their infrastructure and tax plan.

Prospective Plantings Report March 31st
This report will be a big market mover as it will set the tone for what we have to plan for in the year ahead. This report contains the expected plantings and last year’s harvest for principal crops and tobacco presented on a state basis. Principal crops are as follows: corn, all wheat, winter wheat, durum wheat, other spring wheat, oats, barley, flaxseed, cotton, rice, all sorghum, sweet potatoes, dry edible beans, soybeans, sunflower, peanuts, sugarbeets, canola, and proso millet.

Weekly Prices

Via Barchart.com

05 Feb 2021
Agriculture, Corn, Cotton, Dow Jones, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

Ag Market Updates January 30 – February 5


Corn gained on the week as South America has had issues with their first harvest and the continued wet conditions delaying it in north and central Brazil. Huge exports this week to China and other strong ones to accompany it were very welcome to see. A total of 293 million bushels, a weekly record, was the good news the bulls needed. It is easy to get in a lull where you expect these exports at this point with the past few months of demand but whenever they come in above or at the high end of expectations it is what is needed to keep the momentum. Funds continue to be long close to 2 billion bushels, so like beans the daily volatility may stick around. Continued exports and continued delay of Brazil’s harvest will be the bullish news under the market going into the USDA report on Tuesday that could throw some surprises at us – there is one thing we know for sure it is the USDA is full of surprises (both good and bad).


Via Barchart

 


Soybeans rebounded this week as the markets were not as volatile as the previous couple of weeks. South America got some welcome rain in parts of Argentina and looks to remain hot and dry for the near future. The wetness in Brazil delaying their first corn harvest does not have much of an impact on soybeans, but as we know any big news for one of them will still have a ripple effect. Funds continue to be long as they entered the week long 820 MBU. As mentioned last week when funds decide to take profits, we may see price volatility in stretches. Good exports this week continued as we see consistent demand from China. As beans have been range bound the last 2 weeks relative to the past few months there has been end user buying dips below $13.50 to provide some support.


Via Barchart

 


Cotton got a strong bounce on Thursday after trading relatively flat for the week. This week’s exports were strong with cotton going to 18 destinations. Overseas mills demand has stayed consistent and will continue to be the driving force behind cotton. With all the cotton that has been sold it is not hard to imagine that there will be a supply squeeze here in the US that will continue to drive prices higher as well. The supply squeeze will come as demand remains high; however, at some point we will begin to run out of cotton to export if current pace keeps up. Outside political pressure on China and their accused human rights abuses continue to cause them troubles exporting cotton which has helped the US. As great as cotton’s run has been it still is well below where it needs to be to be competitive with grains. For this reason, cotton acres are expected to fall over 500,000 acres to 11.5MA which would be supportive for new crop cotton as we head into the spring, but will we get a rally before then to keep those acres? The demand is there so it may be a last-minute decision for some farmers.


Via Barchart

 


Dow Jones
The Dow gained this week and traded to new contract highs as market volatility has slowed down following the short squeeze drama of the last week. Covid-19 cases in the US have been trending lower for new daily cases along with vaccines continuing to roll are both great news. It is also earnings season so there has been lots of news both supportive and negative for many companies as any positive COVID-19 news seems to be the biggest overall market mover.

Insurance
Remember that this month is important for revenue-based insurance averages so it will be important to keep an eye on the markets even if you do not plan on making any sales. As of the close on 2/4 the price for corn is $4.4937 and soybeans are $11.5525.

February USDA Report
Reminder to keep an eye on the USDA report on Tuesday the 9th. This report historically has not contained as many surprises but with the recent Chinese demand we may see another update of the expected ending stocks and exports. We are expecting Tuesday’s report to be a market mover.

Weekly Prices


Via Barchart.com

Disclaimer

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