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AG MARKET UPDATE: MAY 31 – JUNE 14

Corn’s small 18 cent rally off recent lows for new crop corn has been very welcome after 6 down days in a 7-day period to end May and start June. This week’s USDA Report was a non-event with the USDA making no changes to South Americas production from last month despite the trade expecting production well below the USDA’s estimate of 175 mmt (171.82 estimated). CONAB released their estimates on Thursday, increasing their estimates for Brazil’s corn crop but still 310 million bushels below what the USDA is saying. The heat over the next couple of weeks is not expected ...

LEONARD LUMBER REPORT: THE GREAT LONG LIQUIDATION

Recap: The great long liquidation. Between Monday and Tuesday, it looked as if the industry longs blew out. That was after a previous week of light liquidation. This blowout pushed July's futures to a low of 484, which is at par with the cash market. That was a structural change to the market dynamics and should be noted for the future. By Thursday, July was back to a $30 premium and showing some confidence. So, in the short run, we are considering trading par too cheap at a $30 premium normal, and a $50 premium as a gift. We are entering ...

LEONARD LUMBER REPORT: Last week’s trade was in line with expectations

Recap: Last week's trade was in line with expectations. The computer pushed the market to new lows. Coming into this week, I would expect the computer to put pressure on the longs to blow them out. It doesn't take a computer to know that the spec longs are in much higher and now getting margin calls. If you put a fundamental face on the market, the lack of any interest out there allows this sell-off. The fact that we buy the deals today adds pressure in a slowing market. Yes, the housing market is slowing. The data is confusing, but ...

AG MARKET UPDATE: MAY 10 – 31

Corn had a rough week as planting is nearly wrapped up and the expectation of high initial US crop ratings put pressure on the market. The forecast for June turned slightly wetter but will not have any material impact on planting finishing up. The Black Sea yields continue to be pressured due to their weather with no immediate relief apparent. The USDA Crop Production report on June 12 will be watched closely as we get updates for the US including acreage, area harvested, and yield. The market will be looking for any good news before then to help support a ...

LEONARD LUMBER REPORT: HEADWINDS, BROWN SHOOTS, INTEREST RATES

Recap: Headwinds, brown shoots, interest rates—whatever data we look at is not good. The question is whether we have to start worrying about the housing market. We were looking for more but didn't get it. What we have is the same market we have had for 17 months now. It has pockets of positives followed by a long bleed. That has been the lumber market for over 40 years now. It is tradable and profitable when one adapts to the trade mode. So what does that look like? Buying into a falling market has always been a challenge for most. For a few ...