RCM Ag Services

Tag: Cattle

02 Sep 2025
Agriculture, CME, Corn, Cotton, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: AUGUST 12 – 29

Corn has rallied off the post USDA report lows with a large up day on Friday to end the week. Pro Farmer Tour wrapped up their crop tour and has an average US corn yield of 182.7 bu/ac which would still be a record on top of the added acreage, but well below the 188.8 the USDA came out with. The two sides from the USDA’s report is that they likely won’t come out with a higher yield again with some small weather issues developing, but if they keep it high and make another big correction in January saying the crop wasn’t as big as they thought it could cost the farm community billions. The weather has cooled off for much of the country but the lack of rain for extended periods may be a problem in the home stretch.

Via Barchart

The Pro Farmer Tour found a bean crop more along the lines of what the USDA had coming in with a 53 bu/ac estimate vs the USDA’s 53.6 bu/ac. Beans biggest problem right now has been lack of rain for pod fill but a few well timed rains down the stretch could lead to a massive crop. China really needs to show up as a buyer for beans to leg higher but they can get all they want from South America right now even though they are paying a premium to get them vs US beans. The funds have a neutral position on the market as they wait for news that could send the market any direction other outside of the $10 – $10.50 range it has been trading in the majority of the last 6 months. China still remains a cloud over the market with the Trump administration needing to get Ag purchase commitments whenever they work out a trade deal in the coming months.

Via Barchart

Equity Markets

Equity markets continue to claw higher amidst pullbacks as earnings wrap up and AI and tech still drive the market direction. The Fed is expected to cut rates in September while the Trump administration’s attack on the Fed’s independence continues with Lisa Cook in its crosshairs currently.

Via Barchart

Other News

  • ADM plans to close a soy protein plant in Bushnell, IL.
  • Brazil’s investigation into the Soy Moratorium (curbs Amazon deforestation) could threaten sustainable soy sourcing, with potential ripple effects in the global supply chain.
  • Wheat has been relatively flat the last couple weeks.
  • Cotton continues to trade sideways waiting on demand to pick up.

Drought Monitor

Here is the most recent drought monitor.

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 blawrence@rcmam.com.

 

21 Nov 2023
Agriculture, CME, Dairy, Futures, Hedging, Market Commentary, Market Updates, Research, Risk Management rcmagserv 0 comment

Merucci- Milk, Feed, Cattle market update

As we head into end of year, take time to make sure you have minimized your risk and kept yourself open for better prices if they may occur.  It has been a difficult stretch for milk prices which is evident by clients that have had consistent coverage in place are shaping up to get DRP indemnities for their 6th quarter in a row!  Don’t get caught thinking that you know where prices are heading next year.  Here are good ways to protect negative outcomes and still be positioned for better prices in milk, feed and cattle.

 

Milk-  This part is simple, DRP has worked as advertised over the last few years.  There have been both good and bad prices.  DRP has paid out nicely in the low price times and still allowed for availability to participate in some of the highest milk checks on record.  I strongly recommend having at minimum 25% of milk protected in both Q2 and Q3.  Utilizing the 1.5 factor, this will protect 33% and still leave plenty of room to add coverage if prices improve.  Looking at the historical comparisons, milk prices are pretty good and with the subsidy provided for DRP purchase, the cost is well worth the investment in price security.

 

Corn and Meal-  Now the attention is south of the equator.  Don’t put yourself in a position of guessing weather outcomes and China demand, which we will be hearing a lot about in the next few months.  There are plenty of technical and fundamental cases being made for higher or lower prices for corn and meal.  It is unnecessary to take this risk.  Buy May calls in meal; buy calls or risk reversals in corn.  Calls in May meal will give protection against a disastrous crop in Argentina and Brazil.  For corn, whichever timeframe you are concerned about March through December, add an option strategy that best fits your needs.

 

Cattle-  Cattle prices, not to mention DRP,  have been a savior to many dairies.  Now that the straight climb up has seemingly ended, we now will be experiencing some volatility and up and down markets.  With the emergence of beef/dairy, I’m an advocate of LRP for all dairies.  Beef prices affect dairy revenue, why not have subsidized coverage to protect that revenue stream?  Look to add LRP on upticks in feeders or live cattle and be open to trading futures and options vs. LRP policies.

 

Looking back to the beginning of this year and the newsletters that charge subscription fees and “predict” market direction, not very many, if any, predicted this market.  Don’t get caught thinking you know what is ahead.  Your business won’t have a bad year because your invested in downside protection, but it could have a bad year if you don’t.

 

I look forward to hearing from you and discussing individualized risk management plans that best fit your business.  Have a wonderful Thanksgiving weekend.

 

 

Mike Merucci

312.893.5546

mmerucci@rcmam.com

Disclaimer

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