RCM Ag Services

Category: Weather

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].

 

22 Apr 2024
Agriculture, CME, Corn, Cotton, Dow Jones, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: APRIL 8 – 19

Corn continued its slow bleed lower over the last couple weeks with no major bullish news to turn this market around. US weather may slow planting down to end April a bit but not enough for markets to begin to worry anytime soon. Argentina’s rain will continue to slow harvest as the discrepancy between the USDA and South American reporting services remains a mystery. The bounce to end the week was due to escalation of the Israel and Hamas/Iran fighting in the middle east.  According to Reuters the US EPA is expected to announce plans to temporarily waive restrictions on higher-ethanol gasoline blends this summer. This market is at the mercy of funds and weather which currently aren’t helping prices higher.

Via Barchart

Beans continued lower as they lost another 20+ cents this week even with the big up day on Friday. Beans need any good news they can get as you can see from the chart below it has been a rough few months. Soybean oil has also had a rough go lately as bullish news is lacking in the soybean complex. The size of the bean harvest with the USDA and CONAB numbers still far apart will be the biggest factor moving forward as we need all the information we can get. We did get close to the technical support which is good to see a bounce there.

Via Barchart

Equity Markets

The equity markets continued their recent struggles as tech and AI stocks have given back some recent gains. Pullbacks are healthy for markets, especially after the run we have had to start the last few months being so concentrated, but sticky inflation and war escalation provides some problems to monitor as earnings are set to ramp up next week.

Via Barchart

Other News

  • Israel retaliated against Iran overnight continuing the escalation of tensions and war in the middle east.
  • The USD keeps moving higher as the June USD Index went over 106 earlier this week.
  • Cotton has struggled of late as a lack of demand on the global scale and no weather issues yet in the US pulled it back from recent highs.

Via Barchart

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].

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

AG MARKET UPDATE: JANUARY 26 – FEBRUARY 9

Corn has had a rough 6 months and continued lower with bearish sentiment and funds being short. The USDA report had higher Brazil corn production than the CONAB numbers by 10.25 MMT. The market has been looking for any good news to help put a floor in and that has not materialized. The one bright spot in exports is that we are ahead of pace to both Japan and Mexico for the year while China’s demand has been poor heading into the Lunar New Year. The USDA report pegged 23/24 US corn stocks at 2.172 billion bushels, close to the pre-report estimates.

Via Barchart

As bad as the news, or lack of news, for corn has been, the news for beans has been worse. In this week’s USDA report the US bean stocks came in at 30 million bushels higher as exports struggle. Brazil bean production came in above expectations as well with a 156 mmt production (trade estimate of 153.15mmt). With a quiet period occurring during Chinese Lunar New Year it is unlikely to see strong exports and weather is neutral to bearish in South America.

Via Barchart

Equity Markets

The equity markets continue to climb as the S&P 500 closed over 5,000 for the first time on Friday. The market has been pulled higher by the same stocks that have gotten it to this point in the magnificent 7 and AI stocks rallying. Analysts are debating whether the rally should broaden in 2024 or remain top heavy as it has started. The Fed will likely keep rates where they are until at least the summer.

Via Barchart

Other News

  • The bearish USDA report continued to weigh on the markets as South American production came in above expectations, still higher than many private estimates.
  • Thanks to Chip Flory and Davis Michaelson for having Jody Lawrence on their internationally known and critically acclaimed AgriTalk radio program last Friday. Here is the link.

 

Via Barchart.com

Contact an Ag Specialist Today

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

 

01 Dec 2023
Agriculture, CME, Corn, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: NOVEMBER 9 – DECEMBER 1

Corn has had a rough month as it continues its sideways to lower grind after briefly touching $5.20 in October for the March contract. While there has not been any major market news to direct the market a strong weekly export report this week was welcome to the market that had been bleeding lower. The last few days saw a nice reversal, seeing a 14-cent rally off this week’s lows. Basis has taken a nosedive in many areas of the country hinting that there may be more corn out there than initially expected. With harvest all but wrapped up for most of the country it will be worth keeping an eye on whether farmers store the corn and hope for better basis or get it off their books to pay back operating loans at the highest rates we have seen in years. Brazil’s weather remains about the same with beneficial rains expected over the next couple of weeks in the drier areas north and the south remains wet.

Via Barchart

Soybeans have fallen over the last couple of weeks but is in a sideways trade in the big picture. Exports were not as strong as corn but better than expected. Brazil’s weather is the main focus for beans right now as the north is drier than normal and the south is still wet. The bean demand from China is welcome, as always, but sustained demand and not just demand while Brazil is having logistic issues will be important. The amount of rain in Brazil next week will be the main market mover until the report on Friday if we get some surprises.

Via Barchart

Equity Markets

The equity markets had a great November seeing strong gains across the board as the Fed speak has turned dovish and inflation continues to cool. The markets are pricing in the Fed beginning to cut rates in the first half of 2024 while the general consensus by large companies and funds is that a mild recession is still in the cards next year. The big names had a good month and the 10-year note fell, but it was encouraging to see some laggards join the party. The end of the year always involves some shuffling, but economic data will continue to move the markets now that earnings are past.

Via Barchart

 

Other News

  • Charlie Munger passed away this week at the age of 99. A longtime investor and one of the brightest minds for financial markets the Berkshire Hathaway investor left his mark and knowledge on the financial markets.
  • The next WASDE Report is Friday, December 8 at 12 ET
  • Brazil is set to join OPEC+. Brazil produces about 3.7 million barrels a day which makes it a top 10 oil producing country.
  • The ceasefire between Israel and Hamas ended as hostage swap negotiations stalled. The unrest in the Middle East will continue to dominate headlines.

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].

 

17 Sep 2023
Agriculture, Cash Basis, CME, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: SEPTEMBER 1 – 15

The September USDA Report this week did not give the bulls much to work with, having yield come in above estimates at 175.8 bu/ac and increasing planted acres by 800,000. The increased acreage and yield would still result in a record crop of 15.134 billion bushels despite the drought conditions that bookended this growing season. The largest sale of corn to China since April occurred this week as they made a purchase at the lowest prices in months even with a strong USD. While the markets trade the USDA report, the cash markets in areas are telling a different story with strong seasonal basis and poor crop ratings. Combines will get rolling in the coming weeks and will tell the story of this crop.

Via Barchart

Soybeans fell following the report as well, with the numbers coming in close to expectations but not enough to spark high volumes of buying. The US soybean yield of 50.1 bu/ac following the brutal heat over the end of August and start of September did damage to this crop, but to what extent is hard to tell. The soybean balance sheets are tight for ending stocks and any lower yield from here would eat further into it. The soybean crush numbers were disappointing to end the week, but the stocks were low hinting at the lack of soybeans out in the market currently.

Via Barchart

Equity Markets

The equity markets have been mixed the past couple weeks with various economic data coming in including CPI of 3.7%, slightly hotter than expected, for the month of August. The markets will continue to process data now that earnings are mostly done with, and the Fed is unlikely to raise rates again. The soft landing is still in play, but any economic surprises could derail that.

Via CNBC

Drought Monitor

The drought monitors below show the change in drought conditions over the last 2 weeks.

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].

 

05 Sep 2023
Agriculture, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: AUGUST 21 – SEPTEMBER 1

Corn has been range bound lately looking for anything to give it direction. The heat and dryness currently happening across most of the US is bullish, but the rains and cool weather before may have given this crop enough to weather the heat. There has been some rain added to the forecast but far enough out to not get too excited about yet. Exports remain steady and within expectations with no major changes expected. Corn has been held down with wheat while Russia sells their wheat for cheap on the world market to pay for the war in Ukraine. Last week’s Pro Farmer tour came back with a 172 bu/ac yield for the US, below the latest USDA report by over 3 bu/ac. While many estimates think the latest USDA is still probably too high, a 172 yield is closer to other estimates even with the current heat. The long weekend always allows for news to change and create a volatile trade to start next week.

Via Barchart

Soybeans fell this week following helpful rains before the heat. The Pro Farmer tour estimated the US crop to be 49.7 bu/ac, below the USDA projection of 50.9 bu/ac. The soybean balance sheets are tighter than corn and will only get worse the more this crop shrinks down the stretch. New crop sales are well behind USDA projections of an 8% decrease for the 23/24 marketing year, currently running 37% behind last year’s pace. With a shrinking crop it is hard to expect export sales to significantly ramp up but if drought conditions continue with heat and river levels stay low we could see logistic problems again this year. The next few weeks will be important to finish this crop but with harvest approaching most of the damage has likely been done.

Via Barchart

Equity Markets

The equity markets rallied over the last two weeks with some important stocks posting strong quarters such as Nvidia. After a tough August the markets will look to bounce back in September with economic data and Fed decisions in the coming weeks.

Via Barchart

Drought Monitor

The drought monitors below show the change in drought conditions over the last 2 weeks.

 

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].

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.