cotton Archives - Page 4 of 6

19 Apr 2021

Agriculture, Corn, Cotton, Dow Jones, Grain, Market Commentary, Market Updates, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

Ag Markets Updates: April 10-16

Corn had a good week as we reach new contract highs in May for old crop. As you can see in the 1 year chart below after trading in the $5.30-$5.60 range for a couple months corn has seen a strong response since the Projected Plantings report came out. The export numbers this week were not great, yet corn was still able to post a positive day following the report as the number was still 10 million bushels above the weekly total needed to meet USDA estimates. Analysts are expecting Brazil’s safrinha crop to potentially lose 5 million metric tonnes due to the late planting and stress from the drought conditions that have been present for a while. Ethanol stocks are the lowest mid-April they have been since 2014 showing that demand has ramped back up as re-openings continue. Some corn planting has started in areas across the country but this week’s cold weather will bring it to a stop as many areas will have to wait for it to warm back up to continue planting.

Via Barchart

Soybeans saw small gains on the week, but for the most part it was a quiet week for beans after a slight dip then gains. The news in the market around soybeans has been limited which is why the corn and bean chart are starting to look different. The cold weather that will delay/pause planting in some areas will not have much, if any, effect on soybean planting as they usually begin later anyway. Beans are now well off their contract highs for old crop and until we get back to those levels do not expect any strengthening look from the charts. Soybean’s will continue to move with exports and if anything crazy happens in South America but will probably slowly follow corn just how corn followed soybeans until now for the short term.

Via Barchart

Cotton continues its rebound from the recent lows as world demand continues to increase and consumer spending rebounds. The dollar has also weakened recently supporting commodities as well. Retail sales for the month of March were reported this week climbing 9.8% as stimulus checks were spent and consumers get back out in the market. With cotton prices where they are compared to other crops many farmers are stuck with a difficult decision on which to plant. In some cases, farmers in areas such as west Texas, currently suffering from bad drought conditions, may elect to plant sorghum (milo) as a cheaper to produce alternative that has a much wider planting window. The drought conditions are a problem (see map below) in many areas, but when 40% of the cotton crop is expected to be planted in Texas the supply and demand story come the fall comes into play.

Via Barchart

Dow Jones

The Dow gained on the week despite the news that the Johnson & Johnson vaccine distribution will be put on hold after 6 cases of a rare blood clot after giving out over 7 million doses. The reopening strength has still been playing in the markets as many consumers are out and about again after receiving stimulus checks.

Lumber

In case you have not been paying attention to it, lumber prices have been high for a while now but continue to climb. In the cash market any wood that is for sale is bought immediately and this is also being reflected in the futures market with it now trading over $1,200. This plays out in the cost to build houses in a real estate market that has been hot the last year in the US despite the pandemic.

US Drought Monitor

The map below shows what areas of the US are currently suffering from drought conditions and as you can see it is widespread. As planting begins in many areas some areas will be delayed as they wait for a good rain to help them get in the field. The drought in Texas will have the biggest effect on Cotton as over 40% of the US cotton crop is expected to be planted there.

Weekly Prices

05 Apr 2021

Agriculture, Corn, Cotton, Grain, Market Commentary, Market Updates, Podcast, Soybeans, U.S. Dollar, USDA Report rcmagserv 0 comment

March 2021 Quarterly Stocks and Planting Intentions Report: The Hedged Edge

The USDA came out with a bullish report???!!!! It’s fair to say that many in the industry (us included) were left speechless. We know that 2020 was a crazy ride for commodities, but it looks like we may be in for an even WILDER ride on the opposite end for 2021. To discuss this bullish report, we’re joined by our two favorite RCM Ag Services Cotton and Grain experts, Jody Lawrence and Ron Lawson, to discuss how this recent report is bound to affect the markets/insurance premiums/loan opportunities and much more in the coming months.

Find the full episode links for The Derivative below:

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Disclaimer: This podcast is provided for informational purposes only and should not be relied upon as legal, business, or tax advice. All opinions expressed by podcast participants are solely their own opinions and do not necessarily reflect the opinions of RCM Alternatives, their affiliates, or companies featured. Due to industry regulations, participants on this podcast are instructed not to make specific trade recommendations, nor reference past or potential profits. And listeners are reminded that managed futures, commodity trading, and other alternative investments are complex and carry a risk of substantial losses. As such, they are not suitable for all investors. For more information, visit www.rcmalternatives.com/disclaimer

26 Mar 2021

Agriculture, Corn, Cotton, Market Commentary, Market Updates, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

Ag Market Updates: March 20 – 26

Corn struggled to get any momentum going this week, despite having better than expected exports. Corn, like other commodities, has struggled as funds begin to reposition in a “rising interest rates” environment and a strengthening US dollar. There has not been any news out of South America that is either bullish or bearish for corn and it is likely to stay that way into next week. The prospective plantings report on Wednesday is major and we expect the market news to be relatively calm as everyone holds their breath for next week. This report always has the potential to pull the rug out from under the market, so positioning yourself ahead of it will be important as well as considering some new crop sales as prices are still very good in case the report is bearish.

Via Barchart

Soybeans had slight gains on the week as they continue to trade in the same range of the last few weeks. Even though it looks like beans have flattened out on the chart, we are still about 50 cents better than we were on Feb 1^st . So even though beans have slowed down compared to Aug-Jan, we still have seen a good last 2 months even if it looks like the momentum is slowing down. Exports were good again this week and there was little changed in the world weather outlook, so beans have been at the mercy of traders and not the fundamental news moving the markets. Wednesday’s report, like with all markets, will be an important measuring stick on beans as we see the acres as well. As it is expected, the USDA will lower ending stocks as exports continue to be strong and ahead of the USDA predicted pace. As always, the USDA can surprise everyone so be prepared for the unexpected and plan accordingly.

Via Barchart

The cotton market got hammered this week capped off by a limit-down movement on Thursday. The cotton market is being moved by the funds and quants as what we are seeing in all other markets is affecting cotton. The fundamental news about cotton is rather bullish as pressure continues to be put on the CCP and cotton coming out of Xinjiang. The exports this week were higher than anticipated as well as large sales going to Vietnam, China, and Turkey pushing cotton higher. With the acreage report next week it is expected that about 40% of the US cotton crop will be planted in West Texas (which is suffering from very bad drought conditions) which will affect planting unless there is a major shift in weather. Cotton will also likely lose some acres to other crops in areas that can grow variety as December soybean and corn prices are much more attractive. The increase in demand coming to the US market along with what could be a very challenging growing season for many areas could lead to a high demand low supply environment.

Via Barchart

Dow Jones
The Dow suffered some losses on the week as the markets leaked lower after a couple of weeks of gains. The vaccination problems in Europe mixed with uncertainty about rates continue to hover over the market. All major indexes were down this week with the Dow as all eyes turn to what the Biden administration has planned in their infrastructure and tax plan.

Prospective Plantings Report March 31^stThis report will be a big market mover as it will set the tone for what we have to plan for in the year ahead. This report contains the expected plantings and last year’s harvest for principal crops and tobacco presented on a state basis. Principal crops are as follows: corn, all wheat, winter wheat, durum wheat, other spring wheat, oats, barley, flaxseed, cotton, rice, all sorghum, sweet potatoes, dry edible beans, soybeans, sunflower, peanuts, sugarbeets, canola, and proso millet.

Weekly Prices

Via Barchart.com

12 Mar 2021

Agriculture, Corn, Cotton, Dow Jones, Market Commentary, Market Updates, Soybeans, Weekly Prices rcmagserv 0 comment

Ag Market Updates: March 6 – 12

Corn had small gains on the week after continuing to trade in the recent range since leveling off at the start of February. Corn had strong exports and CONAB’s crop were both bullish factors supporting the market on Thursday. Rain expectations were added to later in March for Argentina but also added to northern Brazil in the short run. These expectations are continuing to put pressure on an already delayed harvest. Throughout the current bull run, Corn has managed to bounce when it tests the low end of its technical range. This is nice to see the support kicking in when there is both bearish and bullish news in the market. The March 31^st Acreage and Stocks Report will have updates on every category and will set the stage for the trade’s expectations into the US growing season. The USDA will need to update their stocks in this report as exports have been ahead of their predicted pace for the year-to-date.

Via Barchart

Soybeans made small gains on the week; albeit volatile, after falling from their contract highs at the start of the week. The continued ASF questions in China will hang around the market as bearish news until we get more concrete answers. South America has continued to struggle with its bean harvest and with more rain in the forecast for northern part of Brazil the struggles look to continue. Friday’s early pullback pushed beans below $14.00 on fund selling despite South America continuing to trim their expected yield. Beans are still trading within a wide range but still have a bullish chart even with the small pullback from contract highs this week. Continue to keep an eye on South American weather, exports, and ASF news as those will be the movers going into the March 31^st acreage and stocks report.

Via Barchart

Dow Jones

The Dow had a strong bounce back week as President Biden and the Democrats passed a $1.9 trillion dollar stimulus bill and the continued news of states opening fully back up. Covid-19 vaccines continue to rollout and case numbers also continue to trend in the right direction which is positive for the economy and reopening efforts. The Nasdaq has also bounced back some this week after getting killed last week on rising interest rates as investors cycled out of tech.

Cotton

After falling hard last week cotton has been bouncing around making small gains on the week. Cotton, like other commodities, are being bought in greater quantities at higher prices which are signs of inflation starting at the start of the consumer cycle. Cotton demand around the world has slowly been rising as the world re-opens and consumers cant wear the same pair of sweatpants all week long everywhere.

Weekly Prices

Via Barchart.com

22 Feb 2021

Agriculture, Cotton, Grain, Livestock, Market Commentary, Market Updates, Meats, Podcast rcmagserv 0 comment

2021 Ag Markets Outlook

2020 was a notably difficult year for commodities – oil went negative, coronavirus halted trade and decreased demand, and overall turmoil in the markets sent investors fleeing. Though the first quarter was rough, commodities did their best to rally in the last three quarters of the year and did so as well as they could. So, what of 2021? Are we going to see major rallies in the grain markets with dry weather and Chinese consumption? What about the cotton markets? Are we looking for a steady year or will cotton continue to trend down?

Because there’s so much to talk about, we’ve broken this episode down into two parts:

Part I: Cotton & Grains
In the first part, we’re joined by our Cotton expert – Ron Lawson, and our Grains expert – Jody Lawrence to talk about the outlook for these markets into 2021.

Part I Links:

Part II: Meats
In part II, we’re talking meats with our in-house meat specialists Tom Chaves and Kevin Bost.

Part II Links:

12 Feb 2021

Agriculture, Corn, Cotton, Crop Insurance, Dow Jones, Market Commentary, Market Updates, Research, Soybeans, Weekly Prices, Wheat rcmagserv 0 comment

Ag Market Updates: February 6 – 12

Corn lost on the week following dissapointing numbers in the February USDA WASDE Report. Despite the big losses on Tuesday and Wednesday following the report a modest bounce was seen Thursday to give the bulls a little sigh of relief. As we have seen with previous dips there has been buying after the dips that help support the market. The big surprise in the report was US corn ending stocks number being over 100 million bushels higher than trade expectations at 1.502 billion bushels. They did lower them from the January report of 1.552 BBU but not near as much as expected. The world carryout was was also bearish with the USDA raising world carryout to 286.53 million metric tonnes, a raise of 2.7 mmt, and well above trade estimates. The bullish news was that Chinese imoprt expectations increased by 256 million bushels but the US export total was only increased 50 million bushels. With this bearish news funds also began to offload some of their long positions adding fuel to the fire. You should also not expect any news to come out of China as they head into their Lunar New Year so buying from China will be slow. Parts of Argentina that have gotten needed rain may have received more help than expected on their crops as some predict it helped more than anticipated. The positive day on Thursday to stop the bleeding was important for the bulls but how the week ends will be important.

Via Barchart.com

Soybeans were lower this week as the bearish news in the report for corn moved triggered a broad based sell off at the Board of Trade. Beans took it on the chin Wednesday as fund selling led the way. Despite a neutral report on the beans side, when funds decide to take profit they are the market mover. New export offers from Brazil were part of drawback as they were 40 cents below the US market and that collapse brought the US to about even. The USDA report showed that the US cannot export any more than about 250 million bushels the rest of the marketing year before bins are empty. CONAB released supportive bean crop estimates on Thursday coming in just above 133 million metric tonnes. The tightness of world stocks is on every traders mind and likely what has caused the markets to jump around – While 100 million additional bushels is only 1% of the 10 billion bushels produced any and all changes to production are being watched. The volatility of the past few weeks is best displayed on the visual daily ranges in the chart below.

Via Barchart.com

Cotton once again saw a big week of gains as demand around the world continues. Exports were strong this week with Vietnam, Turkey and China being the biggest buyers. The National Cotton Council’s planted acreage estimates came out this week with the following:

The NCC sees Upland acreage down 4.9% Y-O-Y, at 11.3mm acres. Pima acreage is seen down 20.7%, to 161,000. Overall, this imputes a 5.2% decline to 11.5mm acres. (CottonGrower.com)

With only 4 trading days next week, On-Call sales basis the March contract, will have to be fixed (bought) by the Mills before Friday, ahead of First Notice Day on Monday, Feb 22. The loss of acres was expected with soybeans and corn being very attractive in price vs cotton currently. If cotton can continue its run up it may be able to gain some acres back but this recent run will need to continue. West Texas continues to be extremely dry and will need some moisture heading into the spring.

Via Barchart.com

Dow Jones
The Dow gained this week as supportive news from vaccines and the continued drop in Covid cases around the US. As many investors remain bullish looking at 2021 it is important to note that we still have a long way to get out of the storm that has been the last year.

Wheat
Wheat has been in a sideways trade the last few weeks and looks to continue. There was no big news in the report that caused any knee jerk reaction in the market as it followed beans and corn lower on the week.

Insurance
Remember that this month is important for revenue-based insurance averages so it will be important to keep an eye on the markets even if you do not plan on making any sales. As of the close on 2/11 the price for corn is $4.5141 and soybeans are $11.645.

Via Barchart.com

05 Feb 2021

Agriculture, Corn, Cotton, Dow Jones, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

Ag Market Updates January 30 – February 5

Corn gained on the week as South America has had issues with their first harvest and the continued wet conditions delaying it in north and central Brazil. Huge exports this week to China and other strong ones to accompany it were very welcome to see. A total of 293 million bushels, a weekly record, was the good news the bulls needed. It is easy to get in a lull where you expect these exports at this point with the past few months of demand but whenever they come in above or at the high end of expectations it is what is needed to keep the momentum. Funds continue to be long close to 2 billion bushels, so like beans the daily volatility may stick around. Continued exports and continued delay of Brazil’s harvest will be the bullish news under the market going into the USDA report on Tuesday that could throw some surprises at us – there is one thing we know for sure it is the USDA is full of surprises (both good and bad).

Via Barchart

Soybeans rebounded this week as the markets were not as volatile as the previous couple of weeks. South America got some welcome rain in parts of Argentina and looks to remain hot and dry for the near future. The wetness in Brazil delaying their first corn harvest does not have much of an impact on soybeans, but as we know any big news for one of them will still have a ripple effect. Funds continue to be long as they entered the week long 820 MBU. As mentioned last week when funds decide to take profits, we may see price volatility in stretches. Good exports this week continued as we see consistent demand from China. As beans have been range bound the last 2 weeks relative to the past few months there has been end user buying dips below $13.50 to provide some support.

Via Barchart

Cotton got a strong bounce on Thursday after trading relatively flat for the week. This week’s exports were strong with cotton going to 18 destinations. Overseas mills demand has stayed consistent and will continue to be the driving force behind cotton. With all the cotton that has been sold it is not hard to imagine that there will be a supply squeeze here in the US that will continue to drive prices higher as well. The supply squeeze will come as demand remains high; however, at some point we will begin to run out of cotton to export if current pace keeps up. Outside political pressure on China and their accused human rights abuses continue to cause them troubles exporting cotton which has helped the US. As great as cotton’s run has been it still is well below where it needs to be to be competitive with grains. For this reason, cotton acres are expected to fall over 500,000 acres to 11.5MA which would be supportive for new crop cotton as we head into the spring, but will we get a rally before then to keep those acres? The demand is there so it may be a last-minute decision for some farmers.

Via Barchart

Dow Jones
The Dow gained this week and traded to new contract highs as market volatility has slowed down following the short squeeze drama of the last week. Covid-19 cases in the US have been trending lower for new daily cases along with vaccines continuing to roll are both great news. It is also earnings season so there has been lots of news both supportive and negative for many companies as any positive COVID-19 news seems to be the biggest overall market mover.

Insurance
Remember that this month is important for revenue-based insurance averages so it will be important to keep an eye on the markets even if you do not plan on making any sales. As of the close on 2/4 the price for corn is $4.4937 and soybeans are $11.5525.

February USDA Report
Reminder to keep an eye on the USDA report on Tuesday the 9^th. This report historically has not contained as many surprises but with the recent Chinese demand we may see another update of the expected ending stocks and exports. We are expecting Tuesday’s report to be a market mover.

Weekly Prices

Via Barchart.com

21 Jan 2021

Agriculture, Corn, Cotton, Livestock, Market Commentary, Market Updates, Meats, Podcast, Research, Soybeans, USDA Report rcmagserv 0 comment

Ag Markets Update: January USDA Report

In this monthly segment on The Hedged Edge, RCM Ag Services pros Jody Lawrence, Ron Lawson, Kevin Bost, and host Jeff Eizenberg come together to provide expert knowledge on important markets including cotton, meat, and grains following the USDA Report. Watch the whole episode below!

If you’d rather listen – click on the links below to find your preferred platform:

08 Jan 2021

Agriculture, Corn, Cotton, Dow Jones, Market Commentary, Market Updates, Soybeans, U.S. Dollar, Weekly Prices rcmagserv 0 comment

Harvest Market Updates: January 2-8

Corn continues its run up and briefly traded over $5 this week. Corn and beans charts look very similar as you can see below as corn has followed beans. What I mean is bean news moves the markets more so than corn right now as exports for both to China (and others) have been steady for a while now with some surprises from time to time. China announced this week their intention to plant more corn acres this year and expand ethanol production, but with Chinese corn still at around $10 it will be hard for them to make any major waves quickly. With South American weather continuing to be dry in the big picture this should keep SA from producing a huge crop. Old crop corn prices are strong but new crop Dec ’21 continues to lag and will ultimately depend on the South American crop and planted acres before we see any big movement. Keep an eye on the Jan USDA report that comes out the 12^th for any change in news.

Via Barchart

Soybeans have had a great last couple months as they continue to run up and get over $13.50. As South America continues their dry outlook into the summer in the southern hemisphere. Argentina has a really good chance for wide sweeping rain next week but returns to dry after that. As South American weather still looks to be problem it will continue to be supportive of beans. With good exports again this week and weather issues in SA the underlying fundamentals remain supportive. Brazil has now started importing soybeans from the US as well as China and will continue to do so until harvest. With this runup we still see down days and even sizeable downward movements, this usually will stem from profit taking until we see fundamentals change. With soybean prices where they are this will lead to farmers switching over some acres which will be an important talking point heading into the spring. We continue the view of selling all of your ’20 crop and not paying for storage to take advantage of these prices. If you do not want to miss out on any further movement higher we suggest at looking at re-ownership on board if it fits your risk level.

Via Barchart

Cotton has seen a nice bump higher as we have gotten into the 80s for several trading days. Cotton may benefit the most from the weaker dollar more so than grains. US cotton is still cheaper than cotton in China (even with cost of delivery) so this should keep the US product competitive and sought after. With the outlook of 2021 moving out of the pandemic with vaccines, demand will rise for all textiles but cotton mills will ramp back up in India and China the most. March cotton chart is below.

Via Barchart

Dow Jones
The Dow has gained over the last few weeks as investors have gotten a better look as to what the next 4 year will look like as both Georgia senate seats went to the Democrats. Many experts think that moderate Dems will be the most important over the next 4 years as they will not vote completely on party lines and prevent any drastic changes. However, it will be important to keep an eye on the markets as we get closer to the Biden administration taking over as investors look to avoid new taxes.

US Dollar
The dollar has continued to stay low and may head lower. This is supportive of US commodities in the world market and would help exports in the big picture.

Via Barchart.com

17 Dec 2020

Agriculture, Corn, Cotton, Market Updates, Meats, Podcast rcmagserv 0 comment

Ag Market Updates: December USDA/WASDE Report

During today’s episode we’re talking about reporting back from farmers on the recent USDA report, labor shortfalls, taxes and tariffs, commodity price inflation, adjusting planting intentions, feed prices affecting hog/cattle prices, calorie reports, corn vs beans, and more from the report and looking towards the end of 2020.

Find the full episode links below:

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