Category: Wheat

14 Jan 2022

AG MARKET UPDATE: JANUARY 6 – 13

The USDA report was met with a mixed reaction on Wednesday as markets traded both higher and lower immediately following the report. Thursday brought on large selling though, as rain in the dryer parts of South America took the headlines after the USDA Report ultimately did not provide any major changes. The USDA did not change the U.S. yield for corn as it stayed at 177 BPA while raising total crop size to 15.115 billion bushels and 1.540 billion bushels for ending stocks. World stocks were lowered along with smaller yield numbers expected in South America. The rain will do little to alleviate the stress on the crop as more will be needed before we feel better about less yield loss. Several private estimates   believe the Brazil and Argentinian losses are larger than the USDA updated. However, there is still plenty of time before the crop comes out of the ground to rebound.

Via Barchart

Soybeans fell on the week for the same reasons as corn. The USDA Report was slightly more bearish for beans as they raised the U.S. yield 0.2 BPA to 51.4. They slightly increased total production and raised U.S. ending stocks by 10 million bushels to 350 million. A good amount was cut from World-ending stocks due to the issues in South America, but the market had already priced that in, if not more so than was reported. Exports were within expectations, so no surprises there. One wild card still out there is that China is $16 billion behind their Phase 1 trade agreement commitments. Obviously, not all of this is soybeans, but they are far off their soybean numbers. It is unlikely the Biden administration will press them to get to their commitments, but if South America’s troubles are worse than expected, they have to go buy them from somewhere.

Via Barchart

Dow Jones

The Dow fell slightly on the week but bounced back off its lows from Monday. The markets are looking for direction following 4 days of loses straight. With repositioning for the year ahead and profit taking after a historic year the volatility could be around for a while.

Wheat

Wheat has taken it on the chin the last couple of weeks as you can see in the chart below. Wheat sold off following the other markets after the report. The drought in the winter wheat belt is concerning and if it does not improve, we should see prices move higher in the next month or two. The drought is not a big problem right now, but if it continues into February, it would be concerning. This week saw the lowest close in KC Wheat since October.

Via Barchart

Podcast

The 2021 U.S. grain crop has the potential to be one of the largest on record. Where did all the yield come from, what areas were the hardest hit, and why on God’s green earth are grain prices still so high?

Today, we are joined by several RCM Ag Services grain markets experts from around the country to catch up on a post-harvest update and share an outlook for production and marketing in each of their respective regions for the remainder of the 2021 marketing season and the upcoming 22 crops.

 

 

Via Barchart.com

27 Dec 2021

What’s Driving the Grain Markets Heading into 2022?

The 2021 U.S. grain crop has the potential to be one of the largest on record. Where did all the yield come from, what areas were the hardest hit, and why on God’s green earth are grain prices still so high?
Today, we are joined by several RCM Ag Services grain markets experts from around the country to catch up on a post-harvest update and share an outlook for production and marketing in each of their respective regions for the remainder of the 2021 marketing season and the upcoming 22 crops.
Listen or watch:
11 Nov 2021

AG MARKET UPDATE: OCTOBER 28 – NOVEMBER 9 USDA REPORT

Corn was struggling this week heading into the Nov 9th USDA report, where it saw a good bounce after its release before falling back to only finish up slightly higher on the day. The corn numbers that came out of the report were fairly neutral, with a 177 bu/acre yield and 15.062-billion-bushel U.S. production. The yield was slightly raised from 176.5 the month before but was right in line with estimates, so there was no significant reaction on that number. Overall, there were not many surprises for corn as most bullish reactions came from soybeans pulling them higher with them. With ethanol margins very profitable and crude oil staying higher, the demand side will continue to keep basis levels high. As harvest was 84% complete at the start of the week, there is still time for any weather issues to create issues to finish up harvest, but this is always expected, so being this far along is helpful.

Via Barchart

Soybeans had an excellent bounce post USDA report but finished well off the highs of the day. The yield came in at 51.2 bu/acre, down 0.3 from last month, along with lower world-ending stocks. As far as U.S. ending stocks. the USDA pegged it at a manageable 340 million bushels, slightly up from last month —these numbers are not outright bullish. South America’s weather is non-threatening right now; however, with solid world crush margins, there is not much reason for a bearish outlook heading into the winter. With funds currently flat, we may hang around this area trading until new news enters the market.

Via Barchart

There were no surprises in the wheat report,, but it did follow beans higher after a down week leading into the report. US wheat stocks came in at 583 million bushels (pre-report estimates were 581 million) and world-ending stocks of 275.80 million metric tons (pre-report estimates 276.5 MMT). Despite the recent pullback, there is still a bullish sentiment in the market moving forward for the time being.

Via Barchart

Dow Jones

The Dow has continued to trend higher this week as it has put together an impressive month despite Tuesday’s pullback. Many markets have led it higher from tech to industrials, with the new infrastructure bill playing a role.

Side note: The crypto markets have also been on a tear the past couple of weeks. It will be interesting to watch heading into the end of the year after an impressive last year and a half.

Podcast

For the past year, commodity prices have perpetually soared and continue to trend higher. We’re diving into the fertilizer forecast with a unique guest, Billy Dale Strader, a branch manager for Helena Agri-Enterprises in Russellville, KY., who is truly at the epicenter of the rising fertilizer prices.

Billy Dale planted his agriculture roots on his family-owned farm and has managed regional seed and chemical sales at Helena for the past decade. In this week’s pod, we tackle the big question for farmers and ultimately end-users — is the impact of higher-priced inputs, like seeds, chemicals, and fertilizer, on the supply and demand for the major U.S. crops? Listen or watch to find out!

 

U.S. Drought Monitor

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

Via Barchart.com

01 Oct 2021

AG MARKET UPDATE: SEPTEMBER 23 – 30

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

Via Barchart                         

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

Via Barchart

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

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

Via Barchart

Wheat

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

Dow Jones

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

Podcast

Check out our recent podcast where we’ve brought on one of our real-life firefighters from RCM Ag – Jody Lawrence, along with Tim Andriesen from the CME Group to provide us with some inside baseball knowledge of the current state of agriculture markets. They discuss the real-world application of short-dated options to potentially fight the recent blaze of volatility surrounding agriculture markets.

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

US Drought Monitor

The maps below show the US drought monitor and the comparison to it from a week ago. The outlined areas in black are areas that the drought will have a dominant impact.

Via Barchart.com

 

 

02 Jul 2021

AG MARKET UPDATE: JUNE 18 – JULY 1

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

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

Via Barchart                       

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

Via Barchart

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

Via Barchart

Dow Jones

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

Lumber

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

Podcast

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

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

US Drought Monitor

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

  

Via Barchart.com

 

 

01 Apr 2021

Ag Market Updates: March 27 – April 1

Watch our corn and grain experts talk through this new report in our podcast The Hedged Edge. Or you can continue on below and read our analysis on the corn, soybean, and wheat markets.

 

 

The USDA coming out with a bullish report? 2021 is due to have some crazy things happen after how 2020 went. The Prospective Plantings Report that came out this week pegged the US corn crop at 91.144 million acres when the average trade estimate was 93.208 million acres. The USDA lowered their numbers from the USDA Ag Forum earlier in the year that projected 92 million acres. Along with the acreage coming in below expectations, the Stocks report was lowered from the March 1 number of 7.952 billion bushels to 7.701 billion. So, what does all this mean? It means that an already tight world supply has to meet the needs of a world coming out of a year of lockdowns where demand is expected to ramp back up to pre-pandemic levels. The US crop is always important in the world supply but any major weather issues in the US with this acreage could cause major issues in the world supply while also boosting prices. These numbers could still change as farmers can always decide to plant more but until the summer report of actual acres planted these will be the numbers to go off of.

Via Barchart

 

Soybeans, like corn, had a bullish report with prospective plantings coming in at 87.600 million acres. The average trade estimate was 89.996 million acres and the USDA Ag Forum had estimated it at 90 million acres. This led to a limit-up day following the report as the demand for beans is expected to continue to be strong as the world reopens and the US will need to meet that demand as South America did not blow their growing season out of the water. As we have continued to see the problems with ASF in China that is the current cloud still over this market even with the report. Even with the limit up move you can see in the chart below that it came after a long losing streak to get it back in the higher side of the range of the last 2 months. Thursday beans gave back a good chunk of their gains following the report as the market digests the report and all other information in the market right now. If this acreage number is accurate for the year and the crop isn’t trend line or better then prices should continue to be strong and go up from here. If there is a great growing season and the ASF outbreak in China gets out of control it could put some pressure on this market.

Via Barchart

 

The report for wheat came out bearish but was pulled up after the report by corn and beans. All wheat acres came in at 46.358 million acres when the average trade estimate had it at 44.971 million acres and the USDA Ag Forum had it at 45 million acres. Wheat appears to have taken some of the 1.4 million acres from corn and soybean estimates. The stocks came in above estimates to pushing more bearish news into the market. It will be interesting to see if this weekend’s freeze for the winter wheat areas changes some minds on abandoning acres. As you can see from the chart below wheat has had a more volatile run but is still much higher than it was over last summer despite the last few weeks of losses.

Via Barchart

 

Dow Jones

The Dow gained on the week as markets calm down following the spike in interest rates as their rise has slowed. President Biden rolled out his plan for over $2 trillion in infrastructure improvements this week and still has more spending plans to go. With the money that has been pumped into the economy through stimulus and reopening continuing in the US, there are many questions ahead but one thing we know is that Biden plans to raise taxes to help pay for these plans which will be important to pay attention to.

 

Weekly Prices

Via Barchart.com

 

 

12 Feb 2021

Ag Market Updates: February 6 – 12

Corn lost on the week following dissapointing numbers in the February USDA WASDE Report. Despite the big losses on Tuesday and Wednesday following the report a modest bounce was seen Thursday to give the bulls a little sigh of relief. As we have seen with previous dips there has been buying after the dips that help support the market. The big surprise in the report was US corn ending stocks number being over 100 million bushels higher than trade expectations at 1.502 billion bushels. They did lower them from the January report of 1.552 BBU but not near as much as expected. The world carryout was was also bearish with the USDA raising world carryout to 286.53 million metric tonnes, a raise of 2.7 mmt, and well above trade estimates. The bullish news was that Chinese imoprt expectations increased by 256 million bushels but the US export total was only increased 50 million bushels. With this bearish news funds also began to offload some of their long positions adding fuel to the fire. You should also not expect any news to come out of China as they head into their Lunar New Year so buying from China will be slow. Parts of Argentina that have gotten needed rain may have received more help than expected on their crops as some predict it helped more than anticipated. The positive day on Thursday to stop the bleeding was important for the bulls but how the week ends will be important.


Via Barchart.com

 

Soybeans were lower this week as the bearish news in the report for corn moved triggered a broad based sell off at the Board of Trade. Beans took it on the chin Wednesday as fund selling led the way. Despite a neutral report on the beans side, when funds decide to take profit they are the market mover. New export offers from Brazil were part of drawback as they were 40 cents below the US market and that collapse brought the US to about even. The USDA report showed that the US cannot export any more than about 250 million bushels the rest of the marketing year before bins are empty. CONAB released supportive bean crop estimates on Thursday coming in just above 133 million metric tonnes. The tightness of world stocks is on every traders mind and likely what has caused the markets to jump around – While 100 million additional bushels is only 1% of the 10 billion bushels produced any and all changes to production are being watched. The volatility of the past few weeks is best displayed on the visual daily ranges in the chart below.


Via Barchart.com

 

Cotton once again saw a big week of gains as demand around the world continues. Exports were strong this week with Vietnam, Turkey and China being the biggest buyers. The National Cotton Council’s planted acreage estimates came out this week with the following:

The NCC sees Upland acreage down 4.9% Y-O-Y, at 11.3mm acres. Pima acreage is seen down 20.7%, to 161,000. Overall, this imputes a 5.2% decline to 11.5mm acres. (CottonGrower.com)

With only 4 trading days next week, On-Call sales basis the March contract, will have to be fixed (bought) by the Mills before Friday, ahead of First Notice Day on Monday, Feb 22. The loss of acres was expected with soybeans and corn being very attractive in price vs cotton currently. If cotton can continue its run up it may be able to gain some acres back but this recent run will need to continue. West Texas continues to be extremely dry and will need some moisture heading into the spring.

Via Barchart.com

 

Dow Jones
The Dow gained this week as supportive news from vaccines and the continued drop in Covid cases around the US. As many investors remain bullish looking at 2021 it is important to note that we still have a long way to get out of the storm that has been the last year.

Wheat
Wheat has been in a sideways trade the last few weeks and looks to continue. There was no big news in the report that caused any knee jerk reaction in the market as it followed beans and corn lower on the week.

Insurance
Remember that this month is important for revenue-based insurance averages so it will be important to keep an eye on the markets even if you do not plan on making any sales. As of the close on 2/11 the price for corn is $4.5141 and soybeans are $11.645.


Via Barchart.com

15 Jan 2021

Harvest Market Updates: Jan 9 – 15

Corn had a huge boost this week as the USDA reported the US yield to be 172 bu/acre. This was a 3.8 bu/acre decrease from the Nov report that nobody was expecting. The average trade estimate heading into the report was 175.3 bu/acre, so this surprise played a large role in why corn was limit up following the report. This number is low when you think about the past several years of yields and the fact the USDA had estimated the crop to be 181.8 bu/acre in the August report. Now we had some weather events that caused damage to large areas of crops and a drier August, but not to the point that would cause a 9.8 bushel decrease. So, the drastic change over the last few months is a head scratcher, but the USDA does usually leave us with more questions than answers. The USDA also lowered both US and World ending stocks showing why corn has been going up over the past few months, less corn in the world than expected. US ending stocks were lowered from 1.702 billion bushels to 1.552 billion and world ending stocks were lowered from 288.96 billion bushels to 283.83 billion. Tightening ending stocks played a major role in the harvest to now rally in corn and will continue to play a role as all eyes will turn to South America and their corn crop. If their crop begins to struggle or comes out smaller than anticipated this will begin to push new crop ’21 prices up as farmers make their decisions on what to grow in 2021.


Via Barchart

 

Soybeans continue to go higher as March beans topped $14 this week. Like corn, the report was bullish for soybeans. The USDA pegged yield at 50.2 bu/acre after dropping them ½ bu/acre from the December report. They also raised exports and use while cutting ending stocks adding to the bullish news. Soybean’s news the last few months has been bullish as South America oversold their last crop and are now importing US beans on top of the picked-up demand from China. The USDA also lowered the production for South America from 183 million metric tons to 180.6 MMT. With the current South America weather problems (dryness) this number could continue to go down which would keep the weather as one of the bullish factors pushing the market higher. With Chinese demand continuing along with the imports into South America until their harvest, we will continue to see demand support the market. As always with this time of year pay attention to South American production numbers/weather as changes in those will also have major impacts on our markets.

Via Barchart

 

Wheat followed corn up after the report this week as there were no major changes to wheat. The news from the report was that the winter wheat seedings report increased for the first time in 8 years. All wheat acres were 31.991 million acres, up 1.576 million from last year. This was also slightly higher than the trade estimate. The Dec stocks number was not much of a surprise as it came in at 1.674 billion bushels. On the supply and demand side, supply was left unchanged while seed usage was raised slightly by 1 million bushels and feed usage raised by 25 million. This lead to a 26 million bushel reduction in the ending stocks , overall friendly for the market. As you can see in the chart below, despite the Nov dip the March chart is still bullish looking back to the contract lows in June.

Via Barchart

 

Dow Jones
The Dow has remained pretty flat over the last week as impeachment of President Trump hasn’t been a market mover with president elect Biden set to take office in one week. As vaccine rollouts continue to be slower than hoped for, states begin to ramp up their next phase to non-healthcare workers. Governor Cuomo has now come out against another round of lockdowns but we will see what the Biden administration has in store in the next two weeks.

Weekly Prices

Via Barchart

11 Dec 2020

Ag Markets Update: December 5 – 11

Corn was down a little on the week as there was not much news on either side. The USDA report came with a mixed bag of information as corn had minimal loses after it. The US corn stocks came in 11 MBU above estimates, but world numbers came in 12 MBU below making that news mostly a wash. They did not touch many numbers but did raise Chinese imports or corn by 16.5 mmt. Many experts still see 16.5 mmt on the lower end of imports and will probably end up being higher. Corn does not have quite the bullish news behind it of beans, but a sharp up move in beans will bring corn with it. Continue to keep an eye on exports to China and South American weather.

Via Barchart

The USDA report for soybeans came as a mixed bag of news. The US ending stocks came in higher than expected but still lower than the Nov report (190 MBU in Nov vs 175 MBU Thurs vs 168 mil bu expected). Thursday saw a wide range of trading from 18 higher to 8 lower as you can see in the chart below, and settled down a few cents post report. The main focus will now shift to world demand and South American weather as we head towards the end of 2020. In a La Nina year, drought conditions and warm temperatures can cause issues although recently SA weather has gotten some relief. Any surprise sales will be welcome news as well to push prices higher, but if South America has a production problem that will be the biggest market mover going forward until the January USDA report. Many experts are still bullish bean prices heading into 2021. We stand on our suggestion of not storing beans into the 2021 planting season to take advantage of great prices and potentially look at re-ownership strategies if it fits your risk profile as we look ahead to 2021.

Via Barchart

 

Cotton had a good week boosted on Thursday by the USDA report which provided some bullish news for cotton prices. It lowered production by 1.1 million bales (900,000 bales of which came from a reduction in Texas). Mill use was unchanged, but they raised exports 400,000 bales to 15 million as world consumption and US exports rise. Ending stocks were also 1.5 million bales lower to 5.7 million (or 33% of use). The USDA also lowered world ending stocks by 3.9 million bales expecting lower production and higher consumption. The 2.2 million bale decline in global production comes from the US reduction as well as 1 million bale reduction between India and Pakistan. China is also expected to import more cotton than the previous report. All of these are bullish news for cotton as well as continued drought conditions in west Texas that could cause problems come the spring if the conditions continue for too long. Another bullish factor looking to 2021 crop is with bean and corn prices where they are and cotton prices still trailing we could see acres used for cotton switch to beans or corn in areas where the soil allows. There is still a pandemic raging throughout the world with a second wave in full effect so consumption in the near future may be holding cotton prices back.

Via Barchart

 

Wheat had solid gains this week on Wednesday and Thursday after falling the previous trading days. The USDA report provided some bullish news with smaller supplies, higher exports, and lower ending stocks with no change to the domestic use. The 20/21 global wheat outlook is for larger supplies, increased consumption, higher exports, and reduced stocks. This probably comes on the heels of vaccines rolling out hopefully easing lockdowns as life gets back to normal throughout 2021.

Via Barchart

 

Dow Jones
The Dow has traded up and down over the last week making small gains as the market seems to have priced in the COVID vaccine being rolled out in the next week after FDA approval (hopefully) in the coming days. The approval of the vaccine and Operation Warp Speed going into effect could help support this runup of stocks into the new year, however, if Congress can’t get a stimulus bill together, we could see another pullback. There are still many questions about what a Biden presidency will look like for taxes and regulations coming to Wall Street at the start of 2021 as well.

Water Futures
The CME began trading water futures on Monday as yet another way for farmers to hedge their production if they use irrigation. Water will not require any physical delivery like other futures contracts. This will allow farmers to hedge against water scarcity or shortages that could hurt their crop. Read the entire article here.

Weekly Prices

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08 Oct 2020

AG MARKET UPDATE: OCTOBER 3 – 9

Corn followed beans higher this week as exports continued and Brazil’s weather is still questionable as their season starts. Corn harvest in the US is 26% complete as favorable weather looks to allow for harvest to continue across the country. As Chinese buying continued following holiday, markets are keeping an eye on their purchases as the Chinese government changed laws in what can be fed to hog herds as they continue to recover from ASF. By not allowing for swill (food waste and garbage) to be fed to hogs anymore the demand for corn and meal for feed looks to increase, but it is hard to tell how much swill feed will need to be replaced. Ethanol demand has remained lower than normal as the pandemic continues, but with lower demand has also lowered production. The lower production has lead to tightening in stocks to their lowest level in 8 years. If/when ethanol demand rebounds, look for a boost in corn purchases for ethanol use to replenish stocks and meet demand. Keep an eye on the USDA yield estimates on Friday.


Via Barchart

 


Soybeans kept the rally going this week on weather concerns in South America and exports continued in large amounts. South America remains in a dry pattern that could turn into a drought if they do not get the much needed and forecasted rain in the next couple of weeks to get the beans in the field in some major growing areas. Harvest continued across the US this week as harvest is seen 36% complete as favorable weather across much of the US has allowed farmers to get off to a great start. As China came back from holiday the buying continued as feed demand in China has started to pick up despite herd sizes only being about 65% of what they were before ASF. Fund buying has also continued this week as funds now are long 1.4 billion bushels (about 10% of the expected world production in 20/21) of beans. Prices will once again be paying attention to the USDA report on Friday but do not expect anything like the last report. As you go through harvest we suggest not storing any beans as the market is currently inverted (Nov prices being better than anything in ’21) showing the market wants your beans now. Not seeing a carry in the market makes it hard to hold the beans when selling the physical and getting long futures if you believe the markets are going higher is an option.

 

Via Barchart

 


Funds continued to get long wheat this week, with some profit taking on Thursday, helping fuel the rally that other grains have seen. Weather problems in other areas of the world are helping markets move as parts of Russia remain dry and the Black Sea area has been dry but is forecasted to get much needed rain this week. Argentina like Brazil has been dry but looks to continue their dry pattern unlike Brazil. Stocks are expected to be lower in the report on Friday from the September report.


Via Barchart

 


Cotton prices rallied this week as Hurricane Delta heads toward the Mississippi Delta. The fact that there is still plenty of time for another storm before harvest after Delta worries farmers that one storm may be fine but another would present major issues. Cotton has seen a steady rise in prices since the lows back in April. Exports were good this week as there were little cancellations and strong sales to Vietnam.


Via Barchart

 

Crude Oil
Crude saw a boost this week as Hurricane Delta has shut down production in many parts of the Gulf of Mexico. This is typical of prices whenever a hurricane is in the gulf as reactions to what may happen is usually worse than the outcome.

Dow Jones
The Dow continues its bounce back despite back and forth tweets from Trump and Pelosi regarding a new relief bill and what it should look like. Big tech stays in the news as Amazon and Facebook are continuously being looked at for anti-trust violations by a bipartisan group, not much is expected to come from this but worth noting.

World Weather
Brazil has been dry causing some delays in planting but some rain this week and cooler temperatures are in the forecast so markets will keep an eye on any changes there. Hurricane Delta barrels toward the US as farmers in the south look to try and get their crops out ahead of any rain that could cause damage, especially to cotton in the Delta.

 

Via Barchart.com