Blog

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 ...
Read More

The Leonard Lumber Report: January 10

It's hard to believe that this market has reentered the hyperbole dynamic we saw last year when the market lacked any restraint in upward pricing. The market bottomed on November 2nd at $606 and has gone straight up since. On Friday, the March contract made a new high of $1,250. That is a run of over 100% during the holidays. So, what are the issues causing these spikes? First is the massive contraction of this industry, creating a buy pattern that is out of balance. There are fewer players in the pipeline, making it consistently tight. The other is the ...
Read More

AG MARKET UPDATE: DECEMBER 29 – JANUARY 6

Happy New Year! Volatility has been the main storyline in the first week of 2022. There was enough surprise rainfall in the dry areas of South America to spook the markets right before the New Year before a slight bounce. This week’s ethanol production numbers were slightly below last week. Compared to the previous year, monthly ethanol production is running 9% over last year, but ethanol stocks are 8.3% below last year. Ethanol margins are still profitable as gas has rallied since Thanksgiving. The dryness and heat in Southern Brazil and Argentina remain in the forecast while northern Brazil continues ...
Read More

The Leonard Lumber Report: 2022 Outlook

What a year. The housing industry plowed through 2021 with record disruptions and record sales. Once a pipeline issue was resolved, another would pop up. We are coming into 2022 with a tight supply and high demand for this commodity. Big dollars continue to flow into the economy, and now a house has reappeared as a valuable asset. There is also roaring inflation which is a double-edged sword for this commodity.  The fact is the housing market is exceptional, and lumber prices are trending higher. The positives are firmly in place, while the negatives will need a dramatic economic shift ...
Read More

AG MARKET UPDATE: DECEMBER 22 – 29

Corn continued its rally until it faced some selling on Tuesday. The dip on Tuesday should be expected when a market starts running this hot and people like to take their profits. The South American weather has not changed and remains hot and dry in southern Brazil and Argentina. Northern Brazil may have the opposite problem as they are expected to see heavy rains that could lead to flooding delaying the start of harvest in the region. The weekly ethanol grind was good again this week as we are 17 mbu above the weekly pace needed to meet the USDA’s ...
Read More

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: Apple Spotify ...
Read More

The Leonard Lumber Report: A Quiet Holiday-Shortened Week

It was a quiet holiday-shortened week with the roll being the feature. The market broke $100 and rallied back $60 by the end of the session Thursday. All said the weakness in the market was only via futures, and the cash market held steady or gained for the week.  The Christmas holiday keeps giving. Next week there are more holidays to contend with — that's why we saw the big push before the Christmas week. The question is if the push was sufficient for a while or not. Surprisingly, the cash market demand remained in place last week, so this ...
Read More

AG MARKET UPDATE: DECEMBER 9 – 22

Since early December, corn has had a great run as South America's dryness continues and delays planting in some areas. The corn crop is only about 60% planted in Argentina, which is the slowest pace on record for late December. Anything planted after January 10th will probably experience some yield drag. Their planting rate is on par with last year, but the weather has been far dryer and looks to continue going forward. As you can see in the chart below, March corn has rallied 90+ cents since early September. With continued strong basis and raises at prices, farmers have ...
Read More

The Leonard Lumber Report: The Three “C’s” of the Industry

Introducing the Three "C's" of the Industry:  The best way to recap the market is to look at its tone. To sum it up, we will introduce the 3 "C's" or confusion, congestion, and consternation. We've heard repeatedly, "how could this have happened so fast?" The trade was not looking for an early start to the yearend run. It also believed that there was enough supply. That proved to be incorrect. Most of the supply issues are related to the congestion at transportation points caused by COVID and weather. Things are fluid but at a pace that allows shipping to ...
Read More

AG MARKET UPDATE: DECEMBER 9

This week, corn had a good rally following a couple of big down days last week. The December USDA report was released on Thursday with minimal changes and differences between the numbers and pre-report estimates. World stocks were slightly higher than pre-report estimates  at 305.45 million metric tons (304.47 MMT estimate) and marginally higher US stocks. The USDA did not make any adjustments to the South American crop estimates as they remain patient; we should expect next month to see a change. Continue to keep an eye on SA weather as any continued problems could play out in the market ...
Read More