RCM Ag Services

Category: Weather

09 Jun 2023
Agriculture, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices, Wheat rcmagserv 0 comment

Ag Market Update: June USDA Report Overview

22/23 US Corn Stocks:  1.452 BBU (1.449 BBU Est)

22/23 World Corn Stocks:  297.60 MMT (297.66 MMT Est)

23/24 US Ending Stocks:  2.257 BBU (2.254 BBU Est)

23/24 World Ending Stocks: 314.00 MMT (313.40 MMT Est)

22/23 Brazil/ARG Corn Prod: 167.00 MMT (166.67 Est)

World corn stocks look to grow a lot year over year with expected economic slowdowns dragging on consumption. The USDA left production estimates unchanged, while this is not surprising for the June report, the weather will need to start helping or we should see a drop in next month’s report. The EU and GFS weather models continue to be inconsistent for the next two weeks. The USDA lowered Argentina’s production from last month but raised Brazil’s.

 

22/23 US Bean Stocks:  230 MBU (223 MBU Est)

22/23 World Bean Stocks:  101.30 MMT (100.55 MMT Est)

23/24 US Ending Stocks:  350 MBU (345 MBU Est)

23/24 World Ending Stocks:  123.30 MMT (121.99 MMT Est)

22/23 Brazil/ARG Bean Prod: 181.00 MMT (180.16 Est)

The USDA kept the US production the same while lowering exports, which leads to a big jump in US ending stocks. Crush margins should keep supporting beans, as weather is not a major factor, yet, to worry about. Like corn, the drop in Argentina’s bean crop was partially offset by Brazil’s gains.

 

22/23 US Wheat Stocks:  598 MBU (606 MBU Est)

22/23 World Wheat Stocks:  266.70 MMT (266.58 MMT Est)

23/24 US Wheat Stocks:  562 MBU (569 MBU Est)

23/24 World Ending Stocks:  270.70 MMT (264.65 MMT Est)

2023 US All Wheat Production:  1.665 MBU (1.672 MBU Est)

The USDA forecasted wheat world ending stocks to grow more than expected with higher stock in Russia, India Ukraine and the EU all revising higher. The US ending stocks were raised with a raise in US production as well. Wheat will continue to keep its eyes on the Black Sea, which as we have learned can be unpredictable.

 

Overview:

Business as usual with no big surprises in the June report as the USDA left US production estimates untouched. The USDA also left Chinese imports the same with 23 million tons or corn and 100 million tons of beans. The lack of any major news in the report was expected but the lack of any real bearish surprises was welcome. As it starts to heat up many areas will still be looking for rain, especially in the WCB that was lacking subsoil moisture to begin with. Forecasts will be the most watched thing moving forward as the inconsistencies in models does little to ameliorate any concerns.

 

December 2023 – Corn

November 2023 – Beans

July 2023 – Wheat

Via Barchart

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].

26 May 2023
Agriculture, CME, Corn, Cotton, Dow Jones, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: MAY 15 – 26

Corn had its best 2 week stretch in quite a while. As you can see from the chart below this has been the first meaningful rally, we have seen in 2023. As corn planting was 81% complete to start the week, ahead of the average pace, the trade has started to look at the weather outlook as we head into June. A dry pattern has begun forming in the coming weeks as it begins to warm up across the corn belt. While the heat in June is not overly worrisome it will be important to keep an eye on it as a warm dry June, followed by a hot dry July, could be plenty to do some serious damage to the US crop. We are a long way from this becoming a reality but a few weeks of dry heat to start June could help this rally keep some momentum or at least not give back the recent gains. Exports continue to be disappointing, and the extension of the Black Sea grain corridor isn’t bullish, but as usual the focus will be on final planted acres and weather in the coming weeks.

Via Barchart

Soybeans can’t get any momentum as South American beans continue to be the preferred option in the world market. November futures made a new low this week before getting a modest bounce on Friday heading into the long weekend. As demand continues to struggle the USDA will likely continue to trim exports in the next report, which will add to ending stocks for 22/23. Beans were 66% planted, ahead of the average pace, as weather concerns won’t hit the soybean market just yet. Beans are lacking any bullish news as they wait for a spark but struggle to find where it will come from.

Via Barchart

Cotton had a volatile week as seen in the chart below. When these opportunities present themselves, you do not want to miss the opportunity to hedge your risk. Have a plan and be prepared if there is another 5-cent spike that could make a big difference in your bottom line and potentially a good spot to place a hedge. The 78-84 cent range of Dec 2023 cotton has been consistent with pops to the upside and dips back to the bottom. The world economic outlook and US weather will be the main drivers moving forward into the long weekend.

Via Barchart

Equity Markets

The equity markets continue their mixed run of late with the DJI continuing to struggle while the S&P and NASDAQ stocks see gains. NVIDIA was the big winner of the week as chips and AI have investors’ focus. While the jury is still out on Artificial Intelligence and what role it will play in the coming years, one thing is clear, investors don’t want to miss the boat even though we do not know if the boat is the Titanic or the USS Missouri.

Via Barchart

Drought Monitor

The drought monitor below shows the struggles in the weestern corn belt as the eastern corn belt is in good shape as planting wraps up.

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].

 

28 Apr 2023
Agriculture, CME, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Podcast, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: APRIL 21 – 28

The losing streak continued for corn this week after another week with no bullish news keeps hitting prices. With Brazil’s prices as low as they are due to record production, China cancelled a 233,000-tonne corn purchase this week. This is not a new strategy by China as they cancel purchases from the US once they know Brazil can meet their demand for cheaper. This could lead the USDA to lower export expectations for the year and we would not be surprised to see more cancelations. While all the news has been bad of late and the chart looks ugly, the bounce off the lows to end the week was helpful. The weather remains cool and wet across much of the corn belt for the next week but should warm up and dry out after that to allow for quick planting come mid May. Corn planting progress was as expected this week at 14% complete.

Via Barchart

Soybeans had had seven consecutive days lower before their bounce on Friday to end the week. Brazilian markets had imploded but now appear to be stabilized, but still priced far below the US price. Like corn, there have been some cancelations and slow down in purchases, which will likely make the USDA lower export predictions for beans as well. Bean planting was seen 9% complete to start the week which is slightly ahead of expectations. Corn and Beans are both battling lower prices in Brazil and a good start to planting while they wait on news to change the trade direction.

Via Barchart

Equity Markets

The equity markets got a bounce this week after several mega cap tech companies delivered strong earnings report. Next week’s reports don’t have as many big names but it does have Apple which may be the most important stock. GDP growth cooled for the 3rd straight quarter growing slightly over 1%, the drop of 1%+ quarter over quarter the last three will make Q2 growth important to see if that trend continues and we slip into negative growth, also known as recession territory.

Via Barchart

Drought Monitor

The eastern corn belt has gotten plenty of moisture, some too much, so far this winter with the western corn belt dry.

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].

24 Apr 2023
Agriculture, Corn, Cotton, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: APRIL 12 – 21

Corn had a rough week, especially to end the week falling over 20 cents after a small rally. Poor weekly exports, fund selling and the potential for rain in the driest parts of the US pushed prices lower this week. Corn planting was 8% complete to start the week, slightly behind where it was expected to be but in fine shape for this point of the year. Weather will remain a problem from the Midwest with cold temps continuing. Any news out of Russia and Ukraine will continue to move markets.

Via Barchart

Soybeans had a similar week to corn with weakness into the weekend. Brazilian soybeans continue to be at a big discount to Chicago, $2.00, with their record production and storage shortage. China is not as active a buyer as expected in Brazil but less demand from them will lead to more from other places taking away from US exports. The soybean balance sheet has been tight so that would not be a bad thing for global supply but would not be friendly to getting back to $14 beans.

Via Barchart

Cotton was limit down at one point during Thursday’s trade, before bouncing slightly for its worst day in over a month. The export report was less than impressive this week at a 15-week low. The chart broke through its support level during the down trade, changing how the charts look. The chance of rain in west Texas was one of the drivers as it only takes a few well-timed rains to make the markets nervous. While it is still only a chance of rain all eyes will be on if that rainfall comes to fruition. Any widespread rain in west Texas would lead to another limit move lower.

Via Barchart

Equity Markets

The equity markets bled a little this week as the market looks for direction from earnings. The S&P 500 was unable to break through the 4,200 level, coming close before moving lower for the week. Earnings next week for some major companies (Microsoft, Google, Meta, and Amazon) will give us a lot of information that will determine the market’s next move.

Via Barchart

Drought Monitor

The eastern corn belt has gotten plenty of moisture, some too much, so far this winter with the western corn belt dry.

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].

 

24 Mar 2023
Agriculture, CME, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Podcast, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MAKET UPDATE: MARCH 10 – 24

Corn leveled out over the past couple weeks after its move lower into the mid $5 range. Good exports and continued problems in Argentina have been able to keep corn from moving any further lower while funds continue to offload long positions. Corn will continue to trade here until the prospective plantings and quarterly stocks report on the 31st that will play a role in its next move. There could be surprise news that gives it a bump higher or lower but for overall directional change something surprising would need to be in the report. How the USDA adjusts for further losses in Argentina and unpredictable world demand will be two questions to look for in the stocks report.

Via Barchart

Soybeans finally caved and followed corn and wheat lower after putting up a good fight. Brazil’s record bean harvest is under way and with insufficient storage they have to get rid of them driving prices lower to keep US beans even remotely competitive. Like corn the funds are legging out of their long held long positions making the moves sudden and large. Beans saw a nice bounce to end the week making up for Thursdays losses. One would expect the markets to calm down a little next week as the report looms large for any further downward pressure or welcome support.

Via Barchart

Equity Markets

The markets continue to be confused as they look for guidance that does not appear to be coming. Sec. Yellen this week flipped back and forth on whether or not they would increase deposit insurance for a period of time to help calm fears while the Fed went ahead with its 25 point rate hike. The banking issues make analysts think the Fed could cut rates before the end of the year helping tech stocks but ultimately the Fed likely wont cut rates until we are in a recession.

Via Barchart

Drought Monitor

The eastern corn belt has gotten plenty of moisture so far this winter with the western corn belt needing more heading into the spring.

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].

 

24 Feb 2023
Agriculture, Corn, Cotton, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Podcast, Research, Risk Management, Soybeans, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: FEBRUARY 10 – 24

Corn took it on the chin this week as it traded lower to levels last seen in early January. The bulk of the losses came in the second half of this week following the USDA Ag Forum’s bearish numbers. The Ag Forum estimates 91 million acres of corn with a 181.5 bu/ac yield. While these numbers are not surprising as they are mostly just trend line projections the market still reacted in a bearish way as this would raise ending stocks. These numbers also expect neutral external conditions such as weather, politics, etc. While these numbers historically are not the most accurate the market does listen and this was a major bearish factor for the week. They also released their price expectation for the year with December corn being $5.60, this is about 17 cents lower than Friday’s close. February insurance prices for corn sit at $5.95.

Via Barchart

Soybeans moved lower to end the week in sentiment with corn and wheat. The USDA Ag Forum numbers for beans were 87.5 million acres with a yield of 52 bu/ac. These numbers are very realistic and did not send any shock into the market. These numbers would raise stocks by 65 million bushels to 290 mbu which would help alleviate some balance sheet stress. While these numbers were not surprising they did say they expect November bean price of $12.90, so there is room for downward movement in their view. The news that pulled soybeans lower had to do with other commodities as Argentine production estimates continue to fall and Brazil’s harvest is delayed. The insurance average for soybeans is $13.77 for November beans.

Via Barchart

Wheat has struggled the last two weeks after pushing up against the $8.00 mark before falling all the way to $7.08 to end the week. Wheat has moved lower as Russia is selling their wheat the cheapest of anyone, with Egypt purchasing 240,000 tonnes this week. Russia selling their wheat cheaper to gain market share and get money to continue to fund their war on Ukraine. Funds were also sellers this week on the news as they expect Russia to get business as long as countries are saving money. The Ag Forum released estimates for wheat of 49.5 million acres and a trend yield of 49.2 bu/ac. This news combined with Russia were bearish but with first notice day approaches we could see calmer trade than the past few days soon.

Via Barchart

Cotton

The cotton story has not changed much as the supply/demand story has not changed. There is both a lack of demand and a supply surplus here in the US, which has led to less imports of cotton goods. With the potential recession looming the lack of current demand mixed with that does not paint a great picture for cotton as it continues to trade on the lower end of its recent range.

Equity Markets

Equity Markets were down this week as economic data keeps coming in supporting higher rates. Inflation is sticking around and earnings are mixed as February will post big losses across the major indexes. Many market commentors still believe we are heading lower from several different factors including the Fed, inflation, layoffs, valuations and more. Continue to keep an eye on the strengthening USD.

Via Barchart

Drought Monitor

Eastern corn belt has gotten plenty of moisture so far this winter with the western corn belt needing more heading into the spring.

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].

 

27 Jan 2023
Agriculture, Corn, Cotton, Grain, Market Commentary, Market Updates, Podcast, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: JANUARY 13 – 26

Corn made small gains over the last 2 weeks as news was quiet outside of South American weather with China being on holiday for Chinese New Year. Exports were better than expected this week, but Mexico continues to look at increasing their corn imports from Brazil. The forecast for rain in Argentina over the weekend will direct the trade to start the week. The news to look for in the coming weeks will be purchases from China and any changes in South American weather. Any developments in Ukraine will have ripple effects across the commodity space, but trying to predict what will happen there is almost impossible.

Via Barchart

Soybeans, like corn, had an up and down 2 week span but ended with modest losses. The uptrend beans have seen since October has been promising but eventually it will run out of steam with Brazil in a good position. If Brazil’s harvest gets off to a fast start we could see a weakening in old crop quickly with new crop following slower. Like corn, bean exports to China as they come out of covid lockdowns and Chinese new year would help provide some support until Brazil starts sending them beans. Keep an eye on any positive trade news from China, don’t expect news out of Brazil to be bullish.

Via Barchart

The cotton chart below shows the trade has stayed between 80 and 90 cents for the last couple of months. Cotton is caught in the middle of the markets thinking there will be a recession, and China coming out of Covid lockdowns with capital to spend on consumable goods. Cotton will need some news to get it out of this range, until then expect this trade to continue. While exports increased last week from the previous it is still half of this time last year, showing the demand situation is very different.

Via Barchart

Equity Markets

The Dow fell over the last 2 weeks as everyone is playing a guessing game with 1. What the Fed will do and 2. Will there be a recession? The economy is still doing well as jobless claims have not begun to go up and inflation is cooling but still has a way to go. With earnings underway guidance will be important to understand how companies are expecting 2023 to go with jobs and what they think the Fed will do.

Via Barchart

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].

 

16 Dec 2022
Agriculture, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: DECEMBER 7 – 16

Corn had a good week making gains on mixed news across the world. The war in Ukraine has picked back up with more bombing and aggression from Russia after a “quiet” few weeks. Exports were better this week as we head into the end of the year well behind the expected pace. Weather in Brazil remains good in most areas while Argentina forecast is becoming wetter. Markets will likely remain cooled through the holidays unless there is any unexpected news (flooding rains, further escalation in Ukraine, etc.) that is not already priced in.

Via Barchart

Soybeans were relatively flat this week with a mix of up and down days. We are back up trading at the top of the range we have seen since July. Whether it fails at this level again or can move higher may require some surprise news to the market as exports were good, but the market seemed to shrug off. With South America expected to produce a record crop and those beans hitting the world market in a little over a month, finding buyers for US beans could become challenging. Like corn, news may be quiet heading into the end of the year and holidays.

Via Barchart

Equity Markets

The markets were down this week following a good amount of volatility following the Fed’s announcement of a 50-point hike in rates with comments indicating there will be more raises in the future and could be held higher for longer. CPI came in better than expected but still hot at 7.1%. While we are 2% lower than the highs, we still have a long way to go to hit the target of 2-3% which the Fed will continue to work towards.

Via Barchart

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].

 

08 Dec 2022
Agriculture, Corn, Crude Oil, Grain, Market Commentary, Market Updates, Podcast, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: NOVEMBER 18 – DECEMBER 7

December has not been good to corn as we started the month with a slide lower into the $6.40s. There has not been any major news change with a good start for corn in Brazil, China lockdowns, and the war in Ukraine continuing to hold the headlines. While weekly exports have been good but uninspiring, the weakness in the USD should help US ag exports be competitive in the coming months before the South American harvest. The humanitarian corridor has continued to work as ships leave Ukraine, but as always this is something to keep an eye on for any bad developments. Russia is expected to resume ammonia exports soon, which would help keep input costs for 2023 from getting much higher.

Via Barchart

Soybeans have seen a nice improvement with their slow march higher from the beginning of October. The EPA came out with lower-than-expected biofuel mandates sending soybean and other world veg oil prices lower while meal has taken off higher. Soybeans hit their highest price since mid-September this week with buyers coming back in the market with a weakening USD. South Americas start has been good enough to where the market expects them to produce another record crop but there is still a long way to go. Right now, there does not appear to be much higher of an upside than the low $15 range in the near term, but if South America has weather problems, that could be the catalyst to move higher or if weather remains good the next move lower.

Via Barchart

Crude Oil

Crude has had an interesting second half of the year following its peak in June. While it has traded between $80-90/barrel most of that time, this recent dip below $75 shows there is a lot of uncertainty as we head into winter. The sanctions on Russian oil by capping it at $60 goes into effect this week while many investors do not expect to see it having a major impact immediately. With Russian oil already trading below the $60 and their breakeven closer to $40 it does not appear this will dampen exports for them with India and China continuing to buy. Europe is still struggling with energy as the war in Ukraine continues. Further guidance from the UN or another shock to the market (China loosening Covid restrictions) could send Crude back higher to its recent trading range.

Via Barchart

Equity Markets

The equity markets had a great November rallying over 10% but have gotten off to a sluggish start in December. While data comes in still pointing to a strong economy and job numbers the ball is in the Fed’s court on what to do with rates. It is expected that there will continue to be rate hikes into 2023 with the Fed potentially keeping rates higher for longer than originally anticipated but slowing the rate at which they raise them. Some of the largest companies in the world have either laid off workers or frozen hiring as many questions remain for next year.

Via Barchart

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].

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.

Via Barchart

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.

Via Barchart

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.

Via Barchart

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.

Via Barchart

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].

 

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.