LEONARD LUMBER REPORT: The feature of the week was the extreme down move between Monday and Wednesday
The Lumber Market: The feature of the week was the extreme down move between Monday and Wednesday. Sept futures dropped almost $46 in three days. At the same time, the open interest was rapidly decreasing. It was all liquidation. The longs were selling, the algo was selling, and the industry was buying their shorts back. The algo doesn't accumulate a position, so it was all sides of the trade exiting. The Commitment of Traders report showed a sharp drop in the industry shorts. After nine sessions of selling, futures caught a breather on Thursday and returned to the sedate mode on ...
AG MARKET UPDATE: AUG 4 – AUG 12 USDA REPORT
188.8 bu/acre… Hard to find a silver lining in the report for corn as the USDA ripped the band-aid off from the start instead of slow playing it. The average trade guess was 184-185 bu/ac which led to a big selloff seeing new contract lows. On top of the big yield number the USDA took the FSA planted acreage data and added 3 million acres in planted corn. The extra yield and acres could add nearly an extra 1 billion bushels of corn to the US and world ending stocks. The report did nothing to help the direction corn has ...
LEONARD LUMBER REPORT: “Canadian producers get bailed out.”
The Lumber Market: "Canadian producers get bailed out." That should be the feature of the week. It nullified the reason for the upside premium futures were carrying by eliminating the shutdown risk. It also brought to light the amount of extra wood that is out there. Now I will say the industry has done a good job hedging it. The commercial shorts jumped 1088 last week to 7227. There was more added from Tuesday on. We could be sitting at 1800 to 2000 cars hedged today. That's high. It also will limit the downside at some point. Those hedges take the ...
AG MARKET UPDATE: JULY 18 – AUGUST 4
Corn prices have drifted lower since Mid-July with no major weather issues and no major trade deal news. The corn crop ratings remain strong with about 73% of the US crop rated good/excellent and slking and dough formation ahead of average. Exports have slowed and funds have kept their short position about even last week. With the recent heat dissipating giving way to a cooler week, this crop has not been made yet but has not faced any prolonged growth challenges which continues to fuel the estimates into the 184-185 bu/acre. While this will be an impressive crop, from talking ...
LEONARD LUMBER REPORT: IT IS 2 DOWN AND 1 TO GO
The Lumber Market: It is 2 down and 1 to go. With the ADD and tariff day now out of the way all we have to contend with is the CVD at the end of the week. After that we have to live with a weakening jobs outlook and steady inflation. Prices won't stay up here once the news cycle is over. There is no economic value up here. We are up here because of the risk of a major supply disruption. That is still a feature, but the timing seems to be further out. In the short run mills are ...
