Category: Weather

11 Mar 2024

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

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

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

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

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].

21 Aug 2023

AG MARKET UPDATE: AUGUST 4 – 21

Corn had a rough two weeks with the cool and wet weather that covered large areas of the US coming just in time on a stressed crop. The August 11 USDA Report came in with a 175.1 bu/acre US yield, slightly below trade estimates. This yield seems very reasonable with the early drought stress and the recent rains to help stabilize the crop. The scorching heat and dry weather coming to most of the US the next week+ will stress the crop but the areas that are no longer experiencing drought conditions (see drought charts below) are positioned to handle it. The ProFarmer crop tour is this week and will give insights into what to expect from this crop and give insights we do not get from the USDA. If the USDA updates the planted acres lower from 94 million in September that will be news the market has eyes on.

Via Barchart

Soybeans have held together well over the last couple of months with the low acreage number supporting it. The weather was not great for beans early on, but like corn, the last couple of weeks have been very beneficial and the heat over the next 10 days can cause some issues. The USDA updated their yield estimates to 50.9 bu/acre, below the trade estimates and previous report but also a reasonable number with how the growing season has gone so far. Bean demand appears to be increasing and if this continues into harvest, momentum behind beans could give it another push that corn seems to be missing. The ProFarmer crop tour will be the news this week along with the hot dry weather, an adjustment to acres down the road is a variable that can change the look of this crop.

Via Barchart

Equity Markets

The equity markets have struggled the last few weeks as tech stocks stopped pulling the markets higher and seasonal trends took over. Earnings season is almost over with only a few big names left to report. Inflation and the Fed will be the news moving forward as markets are still unsure what their next move is.

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].

 

04 Aug 2023

AG MARKET UPDATE: JULY 20 – AUGUST 4

As quickly as corn rallied to get back over $5.50, the rains and favorable forecasts for August led it back below $5 just as quickly. The rains in late July provided much needed moisture over much of the corn belt, but as you can see in the drought charts below, varying levels of drought conditions remain. The forecast has shifted drier for August but after a record hot July, August is forecasted to be cooler. Reports of how much damage the first half of summer did to this crop are all over the place, which usually means it is somewhere in the middle. A 180+ yield is probably off the table, but a 172 yield seems to be just as unlikely unless the forecasts change to hot and dry for a long stretch soon. Russia’s bombing of Ukrainian ports in Odesa and the Danube River continue as the markets seem to shrug off any new damage. Over the weekend any forecast changes, new developments in Ukraine or world news will determine what the trade does to start the week.

Via Barchart

Soybeans have a similar story to corn this week but were able to avoid the late June collapse that corn saw thanks to the low acreage number. StoneX estimate for bean yield this week was 50.5 bu/ac which would be a supportive number for beans, especially if the acreage number is accurate. China has begun showing up as frequent buyers in export reports helping the demand story that was questionable on world economic worries not too long ago. The lack of bullish news is good news for the bears as no news markets rarely tend to move higher. Weather in August will be important for this crop and next week’s USDA report will give us more information on US production.

Via Barchart

Recent News

Click HERE to listen to RCM Ag Services’ Jody Lawrence join AgriTalk a couple weeks ago to discuss the current market.

Wheat

Wheat followed corn and beans lower for similar reasons. The markets have shrugged off Russian aggression of late but will be watching over the weekend for any escalation.

Equity Markets

The equity markets suffered losses this week with a big down day on Wednesday when Fitch downgraded US debt to AA+ and earnings continue to roll in. The job market seems to be moderating as hiring was slightly weaker than the previous month. The markets are looking for numbers that will keep the economy and markets going while also giving the Fed the signal to stop raising rates. This is a fine line that can feel like walking on eggshells with a long-predicted recession still the worry of most investors.

Via Barchart

Drought Monitor

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

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].

 

25 Jul 2023

Listen: Jody Lawrence recently joined Chip Flory on AgriTalk to discuss current markets

Recently RCM Ag Services’ director of research, Jody Lawrence, jumped on “AgriTalk with Chip Flory” after they both spoke at an event in Memphis for Helena Agribusiness. During the discussion Jody and Chip dive into the recent events in the commodities space hitting several topics including:

  • The war in Ukraine continuing to impact the world grain supply. The suspension of the export corridor and escalation of the war and its impact on markets.
  • Drought conditions in the US at the start of the year damaged the crop in many areas but how much? Is 177.5 bpa still too high?
  • The recent USDA Report numbers and did 94 million acres of corn really get planted?
  • Balance Sheets and the disconnect between them and what the cash market and basis tells us
  • And More

The audio is below to listen to parts of their discussion and get more insight into their thoughts on what to expect moving forward.

https://omny.fm/shows/market-rally/agritalk-7-18-23-jody-lawrence-1

https://omny.fm/shows/market-rally/agritalk-7-18-23-jody-lawrence-2

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].

21 Jul 2023

AG MARKET UPDATE: JULY 7 – 20

Corn has seen a strong rally after falling following the USDA Report last Wednesday. The USDA estimated the US crop to have a 177.6 bu/ac yield this year following the rough start to growing season with drought conditions over most growing areas. While the rains have been beneficial in providing relief, this crop needs a lot more rain in the form of soaking rains and not storms with straight line winds. If the hot and dry pattern returns expect to see prices move higher. Russia has threatened that they will treat any ship entering the now closed grain corridor as a military vessel has tensions in the Black Sea region high again. The longer this new standoff drags out the more support it will provide grains. The collapse of the USD and inconsistent weather can help support this move higher after a bearish USDA report depending on the future forecasts and technical trading.

Via Barchart

Soybeans have enjoyed a great run over the last month and half as soybeans got back over $14 this week. After a low acreage number and not an ideal start to the summer beans have had a great last 2 months. The forecast hot dry stretch coming up is expected to put more stress on this crop as we head into the end of July and start of August. With tightening world balance sheets it will be hard for funds to get over extended short but every weekend provides the opportunity for surprise rains and new market surprises.

Via Barchart

The big news of the week was Russia threatening all vessels that enter the region as military vessels, escalating the tensions and ending the grain corridor for the time being. Russia keeps attacking Odessa which will damage the remaining infrastructure and could present even more challenges if/when the grain deal resumes. The Russian ambassador to the US has said that Russia is not preparing to attack civilian ships in the Black Sea, though previously the Russian Defense Ministry announced that all ships traveling to Ukrainian Black Sea ports would be considered potential carriers of military cargo, and the southeastern and northwestern parts of the Black Sea’s international waters should be considered unsafe for navigation.

Via Barchart

Equity Markets

The equity markets continued their strength the past couple of weeks with CPI coming in slightly lower than expected (by 0.1%) at 3%. While inflation is still above the target of 2% the slow decrease over time is helping it come down while core inflation, 4.8%, follows the same pattern. The Fed decision at the end of the month is likely to result in a ¼ point rate hike as we head into earnings season next week. Tech stocks took their largest losses that we have seen recently on Wednesday as earnings have begun being posted.

Via Barchart

US Dollar

The US Dollar hit its lowest level in a year this week as the greenback fell below the 100 level. This should help ag exports be competitive on the world stage but the sharp decline from the 103-level last week was surprising.

Drought Monitor

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

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].

07 Jul 2023

AG MARKET UPDATE: JUNE 23 – JULY 7

Corn fell over the last couple weeks following the USDA coming out with 94 million planted acres, well above the March prospective plantings report. On top of the report there were widespread rains across the US over the end of June and start of July. While the drought conditions remain in most areas this rain was able to provide relief in much needed areas to buy it some time for another good rain. With La Nina setting in the potential for more rain and cooler temperatures could be what we see moving forward but how much damage was caused in May and June will be hard for the market to see. The export market has not provided any help with the slow pace continuing during the summer. If the dryness continues and the rain did not provide enough relief, we could see prices move back up after we get the USDA projected yield update on Wednesday.

Via Barchart

Soybeans had the surprise of lower acres in the report with the USDA coming in at 83.5 million acres, a 4-million-acre shift from the March report. Soybeans got a big pop on this news after falling, like corn, when the chance of rain was added to the forecast for most areas. The pullback this week came as the rains helped this crop that was not in as needy a spot as corn was.  The soybean acreage number will help raise the floor of where this crop could have gone with strong yields, but the low number will be the focus as balance sheets tighten. Weather will be the driver moving forward after the USDA report on Wednesday.

Via Barchart

The report last week for wheat was boring compared to corn and soybeans with little changes made. All wheat acres were reported at 49.628 million, down only 227,000 from the prospective plantings report. While the numbers did not seem bearish overall the USDA trimmed abandonment from 32.6% to 30.5%. Stocks remain tight but the lack of demand with Russia dominating the world markets leaves the US exporters in a tough spot. The lack of US demand does not seem to be changing anytime soon so paying to store wheat, hoping to profit from any bullish change, could cost you more when you include interest you need to pay back on operating loans. If you are looking to profit in this scenario using cheap options to own back on paper would make more sense.

Via Barchart

Equity Markets

The equity markets have traded close to flat over the last two weeks trading higher then back lower. The jobs report came in hotter than expected again this week. The markets give the Fed almost a 90% chance of raising rates at the next meeting. The markets have been lead higher by several stocks as we get to the halfway point, the question moving forward will be will they continue to lead and is there a recession on the horizon.

Via Barchart

Drought Monitor

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

 

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].