Tag: corn market

16 Oct 2020

AG MARKET UPDATE: OCTOBER 10 – 16

Corn has continued its momentum up following Friday’s USDA report despite a hit to prices to start the week. Corn closed above the $4.00 mark for the first time since January on the Dec’ 20 contract (see chart below). This year has been different for many reasons but having the highest prices of the year come during harvest definitely adds to it. The “harvest lows” look to have been in August with the run up of 80 cents/bu, giving farmers hope after depressed prices all spring and summer. The USDA report from Friday came in with a yield estimate of 178.4 BPA and lowered the 2020 harvested acres to 82.5 million acres when estimates had it at 83.321 million acres. US corn harvest came in at 41% complete this week with favorable weather over the next two weeks to keep it going. Chinese purchases continue to roll in as they continue buying after their holiday break. Brazil’s weather outlook has improved in the short run to get some moisture but after this rain the long term picture remains unclear as Argentina looks dry as well.


Via Barchart

 

Soybeans rallied this week after gains last week and after the USDA report. Markets came down Monday on funds taking profit but have slowly come back over the last 3 days. The factors moving the market have been the same for the past several weeks. The USDA report from Friday estimated yields to be 51.9 bu/acre and 290 million-bushel stocks, almost 80 million below estimates. Harvest is 61% complete and looks to be full steam ahead with the promising weather across the US. As more uncertainty has come up this week with as China’s Premier Xi criticized the US in a speech regarding the US’s relationship with Taiwan. As the election nears US and China’s relationship will be stressed. What this will do to the Phase 1 agreement is an unknown, but China continues to need our beans which is helpful in the long run.


Via Barchart

 

Cotton prices rallied this week as flooding in India caused damage across large growing areas and possibly damaged up to 1/3 of the country’s cotton crop. With India’s cotton crop damage and Pakistan’s ongoing crop issues look for mills to look to the US for their cotton needs. Looking to ’21, if soybean and corn prices stay strong into the spring there will be a sizeable amount of cotton acres that shift to corn or beans tightening the supplies. Many experts think that the prices will be allowing for future demand to help prices as well.

Via Barchart

Dow Jones
The Dow continues to bounce around as there have been 3 down days after 4 up days. Europe is struggling with a possible second outbreak and the US continues to struggle with Covid-19. Election news and Covid-19 news will be the main market movers as vaccine trials are starting to have issues.

World Weather
The International Research Institute put out a forecast for the next 3-months for South America with expectations of normal rain and temperatures for Brazil with drier conditions for the for southern Brazil and Argentina’s main growing areas.  US weather looks great into November for a quick sprint to the finish for harvest.  Russian forecasts remain dry into month end which is driving wheat prices.



Via Barchart.com

04 Sep 2020

AG Market Update: August 29 – September 4

Corn saw slight loses on the week after trading in the low $3.60s despite strong export numbers and falling crop conditions. The crop conditions at this point usually fall as corn starts to get ready for harvest and lose its color as ratings come from looking at the fields rather than any testing. As China has continued to be a large buyer it looks like the market has factored in their purchases and will expect similar levels or purchases moving forward. The forecasts have some rain in much needed areas as we get closer to harvest to help hold on to what many expected to be a great crop a month ago but has seen stress as of late. Rain over the weekend is expected for much of the corn belt especially in areas of the WCB that have been the driest. Although the rain may be late to help out corn much it should give the beans in those areas help. Look for the trade to hold its breath and trade in the $3.50-$3.60 range as everyone holds their breath in anticipation of the USDA Report next Friday.

Soybeans continue its climb higher as exports continue to be huge. Despite a bearish change in the weather with widespread rain coming this weekend the demand continues to pull beans higher. The rain could be coming at just the right time in certain areas as yields can still be effected. One private yield estimate from StoneX pegged the US bean yield at 52.9 bushels. This would be a larger trend line yield but with the increased demand from China it would not crush prices moving forward. Keep an eye on other private estimates as we head into the USDA Report next Friday to hopefully get an idea what the USDA might come out with. Look for exports to continue their strong run as any pullback would hurt prices that have been drawing their strength from recently.

DOW Jones

After trading over 29,000 the Dow saw large losses on Thursday after a week of gains. After the large run-up the last few months the losses could be from profit taking or the start of a market correction but there is no way to tell after one day.

Vaccine News

The US Center for Disease Control announced that states should prepare for a potential vaccine on November 1st. This would be great news heading into the end of 2020 and also right before the election.

28 Aug 2020

AG MARKETS UPDATE: AUGUST 22 – 28

Corn saw solid gains on the week as large exports and continued weather problems were the market movers. The western corn belt looks to continue its dry run in the coming week with no widespread rain expected in areas that have been suffering from drought. This will put more strain on the crop as we head into harvest. The crop, especially in Iowa on top of the storm damage, has been fighting drought conditions most of the summer in the western corn belt so an already strained crop doesn’t look like it will get much help coming down the stretch. Large exports this week also helped give a boost as China is stepping up their purchases over the past month. Along with the rally in Dec ’20 prices the ’21 crop has gotten a boost as well to much more attractive levels than a few weeks ago. The chart below shows the rebound back to levels we last saw around the 4th of July. It is possible we have already put in a low heading into harvest as weather outlooks, crop conditions and exports have been favorable for prices as of late. Unfortunately favorable for prices does not usually mean favorable for the crop so hope exports continue because any good weather news to help the crops would be bearish for prices.

Via Barchart

 


Soybeans saw a major bounce this week as weather concerns and Chinese buying drove the market. As soybean yields are still at a higher risk than corn at this point in the year the dry weather outlook could cause some damage to the crop. Like corn, the areas already in drought conditions will continue to hurt along with areas that have just started struggling look to continue into September. The continued exports to China are promising as consistent buying in bulk would be promising of long term Chinese demand. As everyone likes to see prices going higher for this year after a long year of Covid-19 and weather, do not forget to be thinking about the ’21 prices if the rally continues where you could sell forward some of your production for ‘21 or gain some premium for storing until next summer. If China continues making purchases and the weather remains grim look for this rally to continue or hold until there is news to stop it.


Via Barchart

 

Hurricane Laura
Hurricane Laura slammed the gulf coast in eastern Texas and western Louisiana as a category 4 storm. The hurricane will bring 5-10 inches of rain and heavy winds to the western Mississippi Valley. As the storm is expected to turn northeast and dump rains on the southern Ohio Valley this weekend it will miss the areas that need the rain the most in the western corn belt. Seeing the destruction brought by the storm along the coast our thoughts and prayers are with everyone affected. (Check out some more thoughts on a hurricanes effect on futures markets from our sister company here)