Tag: DOW Jones

04 Mar 2022

Corn, Crude Oil, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Podcast, Risk Management, Soybeans, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: FEBRUARY 24 – MARCH 3

Corn made large gains this week following wheat, but not with the same panic. While Ukraine is a major corn exporter, it is not on the same level of wheat. Corn’s moves will be similar to wheat as the news from eastern Europe, and war will be problematic for the world balance sheets. While it has not moved with the same vigor as wheat, the $1 gain in the last eight trading days shows the potential fallout from this spooks the market. It is hard to tell how many acres will be lost this spring, but it is estimated that only 60% of corn seed is on farms. How likely is it the rest will make it to the farms? We cannot be sure, but it certainly won’t be much more if the conflict drags out. We are still in an inflationary environment, and fund money is very much in these markets, so when they decide to take profits, we will see the same volatility we have of late.

Soybeans gained on the week but barely when compared to corn and wheat’s gains. Corn and wheat are major exports for Ukraine and Russia out of the black sea area where beans are not, so they are not immediately affected. South America’s weather outlook has improved but will not turn around the crop too much after its rough start. Soybeans will benefit from the corn and wheat stories, but they also have their own story to follow in South America.

The soft red winter “Chicago” wheat is in full-on panic mode, as you can see from the limit move days in the chart below. The war in Ukraine does not seem to be ending soon, and the sanctions on Russia will last and hurt their economy. Eventually, the market will figure out what fair value wheat is, but for now, with the potential for Ukraine to not do their regular care of the crop, it is on a ride. If Ukrainian farmers cannot apply the fertilizer they usually do, the crop will shrink by several metric tons and could be double digits. Ukraine is the 5th largest exporter of wheat globally; Russia is number 1; this conflict will have major ramifications in the wheat market for the foreseeable future.

Dow Jones

This week, the equity market made decent gains as they have had a mixed trade the last few days. Jerome Powell said this week that it is all but a certainty that rates will be raised 25 basis points in the March meeting, lower than the 50 thought a few weeks ago before the war with Russia and Ukraine. Inflation has been bad the last year and will not improve soon with higher commodity prices across the board and Russian sanctions presenting a problem for some trade. Look for investors to focus on U.S. equities for the time being, as Europe and emerging market countries use Russia for a lot of their energy and could see issues with production and energy crunches.

Crude Oil

Crude moved higher this week as sanctions against Russia have made the future of Russian oil exports cloudy. The U.S. purchases roughly 600,000 barrels of crude from Russia a day, which does not help our already high gas prices. Crude still has room to go higher as ramping up production to make up for any lost oil takes months to do. If this conflict drags out, we will see elevated fuel prices through the summer and be a larger expense on the farm than the last few years going back to 2014. The 10-year chart below shows the current levels to 2014 to help you budget if you did not hedge your fuel prices.

Podcast

Tune in as biotech guru Dr. Channa S. Prakash discusses everything from Alabama football, genetics as one of the most extensive agricultural advancements, the most significant risk factors to feeding the world over the next 30-50 years, plus everything in between.

Why producing crop plants with a much gentler footprint on the natural resources will help feed the growing population. How 75% of the world’s patents in agriculture gene editing are coming from China. Understanding that trying to impose restrictions on our ability to grow food can be a considerable risk to agriculture. Listen to hear about these topics and more!

Via Barchart.com

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 [email protected].

25 Feb 2022

Corn, Dow Jones, Grain, Market Commentary, Market Updates, Research, Soybeans, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: FEBRUARY 17 – 24

Corn was up a lot this week for similar reasons as wheat, with the Russian invasion of Ukraine pushing commodities higher. The conditions have improved in South America, but the length of trouble still caused large amounts of damage to the crop that we still do not know the depth of. The USDA Ag Outlook Forum came out with 92 million acres for corn, with some acres going to soybeans along with a 181 yield. A 181 yield would be a record crop, but with the supply chain issues, fertilizer prices, and availability of chemicals, many factors could affect yield if farmers can’t get all the inputs. Ukraine and Russia will be the market-moving news for now until we get a better idea of the long-term consequences. The February insurance price for corn is $5.89 ½. Friday’s early selloff will test the bulls for all markets.

Soybeans gained on the week as the Russia and Ukraine news dominated headlines. Outside of this news, the weather outlook improved for South America that would have been bearish for bean prices if the eastern European turmoil was not going on. The USDA Ag Forum came out with an estimated 88 million acres with a 51.5 bu/acre yield for beans this year in the U.S., which is a bearish number but not surprising at these current price ranges. The November bean price had a more visceral reaction as it fell quickly Thursday off the highs having over a $1 trading range for the day, ultimately falling 36 cents to $14.51 ½. The February insurance price for beans is $14.33 ½.

After days of large gains earlier in the week, wheat was limit up on Thursday after Russia invaded Ukraine. Ukraine is a major exporter of wheat and other agricultural goods as it is the 5th largest wheat exporter in the world, with Russia being #1. Not only is the world wheat supply threatened, but all trade in the Black Sea area will be affected, potentially only for a short period but disrupted, nonetheless. Russia accounts for more than 18% of the world’s wheat export and is a large oil and natural gas exporter, so any sanctions that hit their export economy could see ripple effects. This is only the beginning of this conflict, and wheat will be along for the whole ride, so you should expect volatility.

Dow Jones

The equity markets continue to get crushed as, along with the struggles since November, we now have a war between Russia and Ukraine. This will make the Fed hesitant to raise interest rates, but as the bond rates have already risen, we are heading that way, whether it is a 25-point or 50-point bump. Tech stocks (NASDAQ) hit a 20% decline since November highs on Thursday before bouncing off the lows. Volatility will remain in the market as Russia remains a threat and China is a large unknown moving forward. Commodity prices have risen even more with oil nearing $100, so the inflationary pressure on the markets will not disappear any time soon.

Podcast

Tune in as biotech guru Dr. Channa S. Prakash discusses everything from Alabama football, genetics as one of the most extensive agricultural advancements, the most significant risk factors to feeding the world over the next 30-50 years, plus everything in between.

Why producing crop plants with a much gentler footprint on the natural resources will help feed the growing population. How 75% of the world’s patents in agriculture gene editing are coming from China. Understanding that trying to impose restrictions on our ability to grow food can be a considerable risk to agriculture. Listen to hear about these topics and more!

Via Barchart.com

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 [email protected].

18 Feb 2022

Agriculture, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Podcast, Research, Risk Management, Soybeans, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: FEBRUARY 10 – 17

Corn made small gains on the week as grains did well across the board. The forecast for South America can’t seem to make up its mind switching back and forth on rain amounts. Argentina has consistently had rain in the forecasts, but what parts of the country and the amount has been inconsistent. Exports were better this week than last, but nothing crazy; potential conflict in Ukraine and further issues with the South American crop could see those numbers pick up soon. The markets are not open for President Day on Monday the 21st, so there is more time to develop around the world. Based on the Dec ’22 futures for corn after today, the February insurance price is $5.84 ¾.

Soybeans were up slightly on the week but have been relatively flat (relative to other weeks) the last two weeks, as you can see in the chart below. The continued weather issues in South America and the Russia v Ukraine possible invasion have been the movers for beans just like corn and wheat. Bean exports this week were the best of the group, with a flash old crop sale being announced on Thursday. We have seen private estimates continue to roll in for production in South America and what to expect this year in the US. The USDA Ag Outlook Forum will start next Wednesday, and we should find out what they are expecting for the year ahead and how the US will affect balance sheets. The insurance price for beans is $14.22 ½.

Wheat has been on a roller coaster the last two months with the ups and downs and uncertainties around Russia and Ukraine. A Russia invasion would be bullish for wheat as countries would shy away from trade with Russia, and Ukraine would stop exports as they try to keep Russia at bay. The Black Sea is a major world trade region. This conflict could lead to potential stoppages, shortages, or even a possible blockade in the region that would cripple a major trade corridor. Keep an eye on this developing story as it could have potential long-term consequences as the US has also threatened Russia with sanctions (they don’t seem to be fazed at all by Washington’s threats).

Dow Jones

This week, the equity markets fell as confusion and concerns of post-Olympic wars between a few countries inch closer. Russia was reported to have changed their mind on invading Ukraine, only for that news to switch to them adding troops at the border. China invading Taiwan post-Olympics is also a possibility as that has seemed to be forgotten as the Russia news took over the market. Earnings season has been mixed with losers and winners in all sectors as inflation has begun to show up more in guidance for the year ahead.

Podcast

Tune in as biotech guru Dr. Channa S. Prakash discusses everything from Alabama football, genetics as one of the most extensive agricultural advancements, the most significant risk factors to feeding the world over the next 30-50 years, plus everything in between.

Why producing crop plants with a much gentler footprint on the natural resources will help feed the growing population. How 75% of the world’s patents in agriculture gene editing are coming from China. Understanding that trying to impose restrictions on our ability to grow food can be a considerable risk to agriculture. Listen to hear about these topics and more!

Via Barchart.com

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 [email protected].

11 Feb 2022

Agriculture, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Podcast, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKETING UPDATE: FEBRUARY 3 – 10

The numbers came in above trade estimates but were lower than the previous months’ report. The USDA kept the U.S. ending stocks at 1.540 billion bushels and lowered the world ending stocks to 302.22 million tonnes while reducing Brazil’s yield. Following the report, it came off the highs for the day before roaring back up to end the day. Thursday’s trade was interesting as halfway through trading, the markets did a 180-degree turn and fell lower on the day after being sharply higher across the board for a large intraday range. This was brought on by producers selling and speculative positions taking profits. The large intraday volatility has not been as present in the market as this summer, but Thursday’s trade is a sign that volatility should be expected at these price levels. The USDA’s numbers for Brazil and Argentina are still above what private analysts and CONAB are reporting. The market seems to be on the analysts’ side when it comes to the struggles in South America. The weather outlook remains the same for the trouble areas as it will be hot and dry in the same areas and wet in the same.

Soybeans continued their run higher despite Thursday’s pullback. The most significant change in the report came to soybeans as the USDA lowered Argentina’s production by 1.5 million tonnes and Brazil’s 5 million. As much of a correction that the USDA made, some analysts still feel these are too high, and their crop will continue to get smaller. With the continued hot and dry weather in Argentina and southern Brazil mixed with the wet harvest in northern Brazil, mother nature is not doing South America’s crops any favors. CONAB released their estimates on Thursday and were well below the USDA numbers, so it’s safe to listen to their numbers and analysts over the USDA right now, it would appear. The two-year chart is below so that you can see the journey of how we got to this point with the great run since early November. Thursday produced the same wild volatility as corn, which saw a 67 ½ cent range while falling off the highs.

Dow Jones

The equity markets have been quieter lately, with small gains on the week, but the uncertainty of what lies ahead remains. The inflation number came in at 7.5% year over year, the highest increase since February 1982. With inflation sticking around and treasury yields jumping, the 10-year treasury topped 2% for the first time since August 2019; it is understandable why the markets have the jitters. Will the market hang out where it is, retest the lows, or try to continue to claw back its losses from January? The market can’t figure it out, so I won’t try to predict for you.

Podcast

Tune in as biotech guru Dr. Channa S. Prakash discusses everything from Alabama football, genetics as one of the most extensive agricultural advancements, the most significant risk factors to feeding the world over the next 30-50 years, plus everything in between.

Why producing crop plants with a much gentler footprint on the natural resources will help feed the growing population. How 75% of the world’s patents in agriculture gene editing are coming from China. Understanding that trying to impose restrictions on our ability to grow food can be a considerable risk to agriculture. Listen to hear about these topics and more!

Via Barchart.com

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 [email protected].

04 Feb 2022

Agriculture, Corn, Crude Oil, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Podcast, Research, Risk Management, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

AG MARKETING UPDATE: JANUARY 27 – FEBRUARY 3

Corn suffered small losses this week, going a different direction than beans. Private estimates of the South American crop are consistently lower than the USDA’s last estimate, and we should see an adjustment on next week’s USDA report. The Chinese’s cancelation of 380,000 tonnes of corn was a drag on the market on Thursday. One cancelation is not the end of the world; it happens, but should we see a trend develop that could damper the bull sentiment right now. The driest areas of South America will continue to dry over the next couple of weeks, hurting their crop in those regions. Private estimates think that Argentina’s corn yield could be 43.5 million metric tons, while Brazil’s could be 112 MMT. These are well below the last USDA report’s numbers, so next week will be interesting to see how much the USDA adjusts their estimates.

Soybeans continued to move higher this week as the South American weather issues will probably significantly impact the soybean crop. The continued heat and dry weather will continue to stress the crop like corn. The market can’t go up every day, no matter what it seems like; the closing off the highs the last two trading days suggests the market may want to take a break until there is more news. Brazilian producers are still not selling, which has interior cash bids competitive with exporter bids. With this playing out in Brazil, the U.S. could see some more business as a result. Especially if China steps in and makes purchases out of the Pacific Northwest, keep an eye on drought conditions around the U.S. even though we are well out from planting as we have seen drier than normal weather in some growing areas to this point of the year.

Dow Jones

Equities have made a strong rebound off the lows until Thursday’s struggles following some bad earnings report lead by Facebook’s (now Meta) major fall. Amazon posted a good quarter which may give investors some relief that Facebook’s problems were their own and not market wide. The bounce was nice to see from an investors point of view as a correction seemed to be done, but guidance from many companies has not been as growth friendly looking forward as the last year. Volatility may stick around for a while so do not expect the markets to recover as quickly as they fell.

Crude Oil

Crude hit $90 this week for the first time since 2014, while Natural Gas also rose to over $5.500 before dipping back below $5 this week. Crude continues its move higher as OPEC+ does not plan to expand production while consumption remains strong. This is a classic higher demand without more supply price raise over the last two months, and many analysts see $100+/barrel as a possibility this spring. Higher fuel prices will affect farmers’ bottom lines as fuel expenses and shipping for other chemicals and fertilizers will be much higher this year on top of higher input costs. (5-year chart below for reference)

Feb USDA Report

The February WASDE report will be released next Wednesday, February 9. This will be the primary driver of the week after weekend weather has its say in the market on Monday. This is not usually a major market mover, but it never hurts to be well-positioned and ready before a report.

Podcast

Tune in as biotech guru Dr. Channa S. Prakash discusses everything from Alabama football, genetics as one of the most extensive agricultural advancements, the most significant risk factors to feeding the world over the next 30-50 years, plus everything in between.

Why producing crop plants with a much gentler footprint on the natural resources will help feed the growing population. How 75% of the world’s patents in agriculture gene editing are coming from China. Understanding that trying to impose restrictions on our ability to grow food can be a considerable risk to agriculture. Listen to hear about these topics and more!

Via Barchart.com

28 Jan 2022

Corn, Cotton, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Podcast, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: JANUARY 20 – 27

Corn continued its rally this week as grain bulls and inflation continue to drive it higher. The yield losses in South America continue to have news around it as the reality of significant losses begins to set in. Too much rain and heat or not enough rain and heat have been driving the issues, with very few areas having excellent growing conditions. With the Chinese New Year coming up, China will disappear from the export reports for a little bit, but once they come back, the market will have a better idea of where Brazil and Argentina sit. If the rumored losses come to fruition, we could see China increase its purchases. Corn has continued its rise while wheat struggles to make up its mind with confusion around the Russia and Ukraine situation. Any escalation there will result in more bullish factors in the market. Despite some volatility, energy prices continued their rise, with crude oil hitting a new high this week. Ethanol plants will continue to produce even with higher corn prices as long as their margins remain strong despite resulting in less fuel consumption. Many energy companies think we could see $100+ Crude in the next few months.

Soybeans continued to move this week on similar news as corn with South America’s issues and continued world veg oil strength. With strong veg oil prices pulling beans along with it as long as that lasts, we can expect some support under beans with any lower moves. Like corn, if private estimates of losses to the South American crop become a reality, we should continue this run higher. If China comes back from Chinese New Year and starts picking up bean purchases, mixed with world veg oil prices could see this rally continue. Acreage estimates for 2022 have been coming out, with Informa pegging the US bean crop at 87.8 million acres. This is slightly higher than the 87.2 million acres from 2021, but we have a long way to go before we get to that point.

Dow Jones

Equities had quite the week with large intraday trading ranges as the market does not seem to make up its mind. This week, the Fed’s decision to leave interest rates as-is means we should expect a raise from the March meeting. The Fed also said they would adjust asset purchases moving forward. The tensions between Ukraine, Russia, and NATO remain a large question mark, but it appears Putin may not do anything until after the Olympics. This will be important to keep an eye on for equities and commodity prices.

Cotton

The cotton market has held in this $1.20 range for the last ten trading days. World demand is there, and this bull market could have room to run if inflation sticks around with other supply chain bottlenecks. We could continue to see this strength last into the spring when planting starts until we get a better idea of what the U.S. cotton crop will look like this year. With rising consumer demand, the cost of production and transportation in the next few months could see volatility.

Podcast

Tune in as biotech guru Dr. Channa S. Prakash discusses everything from Alabama football, genetics as one of the most extensive agricultural advancements, the most significant risk factors to feeding the world over the next 30-50 years, plus everything in between.

Why producing crop plants with a much gentler footprint on the natural resources will help feed the growing population. How 75% of the world’s patents in agriculture gene editing are coming from China. Understanding that trying to impose restrictions on our ability to grow food can be a considerable risk to agriculture. Listen to hear about these topics and more!

Via Barchart.com

21 Jan 2022

Agriculture, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Podcast, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: JANUARY 13 – 20

Corn rallied this week with beans with news of trouble in South America continuing and rumors of purchases from China. As we have mentioned before, China buying all ag products is welcome news as they are well behind the Phase 1 targets. The Russia and Ukraine tension, should it boil over, will have major implications for the commodities market as Ukraine’s exports will all but cease. The news of Brazil stopping bean sales is worrisome as there could be more bean and corn yield lost than thought. Energy prices continue their run higher as ethanol demand does not seem to be slowing down. With corn still below recent highs, unlike soybeans, it would appear there is still room for upward movement, but the trade into the weekend, where anything can happen as we know, will be important.

Via Barchart Soybeans rallied this week as soy oil and meal also rallied. The noise around the problems with South America’s crop got a little louder this week with StoneX reporting that Brazil soybeans have gone to “no offer” due to farmers refusing to sell new-crop supplies in the current environment, with drought losses in the south worse than first believed. South American weather remains mixed as southern Brazil and northern Argentina remain hot and dry while southern Argentina received rain over the last couple of weeks. In early February, all areas are expected to revert back to hot and dry in the forecast. These troubles make it sound like the USDA was off on their South America estimates in last week’s report. This is a situation to monitor as any stoppage of sales from Brazil and Argentina would mean purchases from the U.S.

Dow Jones

Equities have had a bad week as tech has led the way lower. These rounds of selloffs will offer opportunities to buy back in at some point but as always, timing the market is not an easy job. The market was so hot last year pullbacks are expected, but it is hard to stomach when it falls this much this fast. We are still above the levels we were right after Thanksgiving, but the volatility of the last couple of months looks to still be hanging around.

Podcast

The 2021 U.S. grain crop has the potential to be one of the largest on record. Where did all the yield come from, what areas were the hardest hit, and why on God’s green earth are grain prices still so high?

Today, we are joined by several RCM Ag Services grain markets experts from around the country to catch up on a post-harvest update and share an outlook for production and marketing in each of their respective regions for the remainder of the 2021 marketing season and the upcoming 22 crops.

Via Barchart.com

07 Jan 2022

Agriculture, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Podcast, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: DECEMBER 29 – JANUARY 6

Happy New Year! Volatility has been the main storyline in the first week of 2022. There was enough surprise rainfall in the dry areas of South America to spook the markets right before the New Year before a slight bounce. This week’s ethanol production numbers were slightly below last week. Compared to the previous year, monthly ethanol production is running 9% over last year, but ethanol stocks are 8.3% below last year. Ethanol margins are still profitable as gas has rallied since Thanksgiving. The dryness and heat in Southern Brazil and Argentina remain in the forecast while northern Brazil continues to get too much rain. For reference, this time of the year in Argentina is the equivalent to June. If the forecasts prove true in the next couple of weeks, they will continue to stress the crop. Exports this week were nothing to write home about as the USDA described them as the “Marketing year low.” If South America’s crops continue to struggle, we could see an increase in exports, but the opposite could be true if the weather improves.

Soybeans have experienced the same volatility as corn but remain at its highs, as seen in the chart below. The story is the same as corn being driven by weather problems in South America. Barchart estimated Brazilian soybean production at 137 million tonnes, with Argentina production at 45 million tonnes. The last USDA projection had 144 million tonnes in Brazil and 49.5 million tonnes in Argentina, showing that the private sector believes the crop has gotten worse and is trending in the wrong direction. The chart below is interesting because you can see the top at $14 this week and back in July. That will be an important number to close above to keep the momentum going.

Dow Jones

The Dow has had quite a volatile week following a week of the Santa Claus rally. The Fed may increase the rate at which they raise rates which worries some investors, but at this point with the Fed, many investors are waiting until they see the plan. As a new year starts, especially following the impressive year that was 2021, many investors try to predict the story for the year ahead. If we have learned to expect anything while Covid is in the markets, we can’t predict much for the year ahead.

January USDA Report

The January USDA Report is Tuesday and should be a market mover. All eyes will be on the report as everyone positions themselves ahead. If the volatility of late shows up, it could be a big market mover.

Podcast

The 2021 U.S. grain crop has the potential to be one of the largest on record. Where did all the yield come from, what areas were the hardest hit, and why on God’s green earth are grain prices still so high?

Today, we are joined by several RCM Ag Services grain markets experts from around the country to catch up on a post-harvest update and share an outlook for production and marketing in each of their respective regions for the remainder of the 2021 marketing season and the upcoming 22 crops.

Via Barchart.com

03 Dec 2021

Agriculture, Corn, Crude Oil, Dow Jones, Grain, Market Commentary, Market Updates, Podcast, Risk Management, Soybeans, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: NOVEMBER 18 – DECEMBER 2

Volatility was the name of the game this week as every market experienced it from, grains to equities. Corn partook in the excitement, as you can see from the chart below. Important to note is following the small rally in the past couple of days to get back to the levels we saw before Thanksgiving. Wheat was a big winner Thursday and pulled corn with it on the intensifying issues with Russia and Ukraine. If wheat rallies, expect it to pull corn with it even on limited corn news. The La Nina pattern continues to form in South America as southern Brazil remains dry, and forecasts have that continuing. Another non-corn-specific factor to keep an eye on will be energy prices, as ethanol production will depend on how the omicron variant will/could affect US travel into the winter and holiday season.

Soybeans, like corn, saw a bounce the last couple of days to get back to close to the range we were in pre-Thanksgiving. The bounce has brought us back in the range we were trading for most of October, which seems like a good place for the market to hang around when there is a lack of news. Exports continued but were on the lower end of expectations this week, while soybean meal and oil were as expected. If beans could close this week over the 20-day moving average, that would be supportive for bulls who are looking for good news. As harvest is wrapped up, all eyes turn to South American weather and their crops this year.

Crude oil has sank following the Thanksgiving holiday as concern over the new Omicron variant, and its impact on demand hit the market. While these concerns are valid as much is still unknown, the largest problem that seems immediate to demand will be air travel and international travel causing, less jet fuel demand. As of right now, it does not appear to be worrying many Americans, but as more cases are found, we will see how it will affect demand. OPEC+ countries also announced they might cut output if demand falls due to the virus, leading prices back higher.

Natural Gas prices have also faltered this week as a warmer U.S. winter is expected to occur, requiring less NG for heating. Diesel prices have also fallen a lot this week following the Omicron variant news and presents farmers with an opportunity to hedge their fuel needs for next year.

Dow Jones

The Dow experienced a lot of volatility this week as news of the Omicron variant in the U.S. and more places worldwide spooked some investors. The reports are that it only has caused mild symptoms, which is good, but the reaction was not of fear of the virus itself but how the governments will respond with potential lockdowns and travel bans soon. On Thursday, the strong bounce-back shows that investors are still eager to get in the market, so any large pullbacks will be met with buying if it is seen as a jerk reaction, but any longer lasting weakness could be seen as a correction. The down-trend of the last week has made some investors worried and moved some to the sidelines while we see what happens. Powell will stay as head of the Fed and said they might start tapering and raising interest rates sooner rather than later as inflation does not appear to be transitory.

Podcast

For the past year, commodity prices have perpetually soared and continue to trend higher. We’re diving into the fertilizer forecast with a unique guest, Billy Dale Strader, a branch manager for Helena Agri-Enterprises in Russellville, KY., who is truly at the epicenter of the rising fertilizer prices.

Billy Dale planted his agriculture roots on his family-owned farm and has managed regional seed and chemical sales at Helena for the past decade. In this week’s pod, we tackle the big question for farmers and ultimately end-users — is the impact of higher-priced inputs, like seeds, chemicals, and fertilizer, on the supply and demand for the major U.S. crops? Listen or watch to find out!

Via Barchart.com

19 Nov 2021

Corn, Cotton, Fertilizer, Grain, Market Commentary, Market Updates, Podcast, Soybeans, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: NOVEMBER 9 – 18

Corn has seen a good bounce since the Nov 9 USDA report and has traded relatively flat the past few days despite some intraday volatility. There was no specific market-moving news to fuel this rally but tidbits here and there to help fuel overall positive sentiment. IHS Markit updated their acreage for 2022 planted acres estimate with corn coming in at 90.8 million acres, 2.5 million lower than 2020. Ethanol production stays hot as the weekly grind rose to 312 mbu, up 7 from the previous week and well ahead of the USDA estimate for the year. With increased input costs going into 2022, the decrease in acreage makes sense, as balance sheets will be tighter. As harvest nears the end, eyes turn to South American growing conditions for the months ahead.

Soybeans, like corn, have seen a solid rally since the USDA report. Soybeans continued their rally on Thursday until the EPA announced they would release their renewable fuel mandates by the end of the week. As the Biden administration has not been much of an ally for the ag sector, the decline on the coming news makes sense. Soybeans had decent exports this week as buyers keep showing up in the market even as prices trek higher. Continued demand from exports will help support beans, and it will be interesting to see how many beans get stored and who took advantage of higher prices with forward pricing. We will see this play out in the cash & basis market come the spring, but we expect most farmers to store corn for now. IHS Markit estimated the 2022 bean acreage to be 87.9 million acres, 700,000 acres less than 2020.

Dow Jones

The Dow struggled this week as earnings continue to come in, but market volatility seems to be expected with the holiday season coming up. The Fed can still raise rates this year, and the Biden administration has not yet announced their nominee to head the Fed (either keeping Powell or someone new).

Cotton

Cotton has had life in the $1.10+ range for a while now as demand overseas is high for U.S. cotton. Growers have seen mixed yields across the country but nothing too surprising to the market. Cotton demand does not seem to be slowing down anytime soon as the world still is coming out of the pandemic, and some countries still have major restrictions.

Podcast

For the past year, commodity prices have perpetually soared and continue to trend higher. We’re diving into the fertilizer forecast with a unique guest, Billy Dale Strader, a branch manager for Helena Agri-Enterprises in Russellville, KY., who is truly at the epicenter of the rising fertilizer prices.

Billy Dale planted his agriculture roots on his family-owned farm and has managed regional seed and chemical sales at Helena for the past decade. In this week’s pod, we tackle the big question for farmers and ultimately end-users — is the impact of higher-priced inputs, like seeds, chemicals, and fertilizer, on the supply and demand for the major U.S. crops? Listen or watch to find out!

U.S. Drought Monitor

The maps below show the U.S. drought monitor and the comparison to it from a week ago. The outlined areas in black are areas that the drought will have a dominant impact.

Via Barchart.com

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Disclaimers
RCM Ag Services is a registered DBA of Reliance Capital Markets II LLC. Trading futures, options on futures, and retail off-exchange foreign currency transactions are complex and involve substantial risk of loss and are not suitable for all investors. Loss-limiting strategies such as stop loss orders may not be effective because market conditions or technological issues may make it impossible to execute such orders. Likewise, strategies using combinations of options and/or futures positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. There are no guarantees of profit. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources. You may lose all or more than your initial investment. You should not rely on any of the information herein as a substitute for the exercise of your own skill and judgment in making such a decision on the appropriateness of such investments. Opinions, market data and recommendations are subject to change without notice. Reliance Capital Markets II LLC shall not be held responsible for any actions taken based on this website or attached links. Parties acting on this electronic communication are responsible for their own actions. Past performance is not necessarily indicative of future results.

Disclaimer

RCM Ag Services is a registered DBA of Reliance Capital Markets II LLC. Trading futures, options on futures, and retail off-exchange foreign currency transactions are complex and involve substantial risk of loss and are not suitable for all investors. Loss-limiting strategies such as stop loss orders may not be effective because market conditions or technological issues may make it impossible to execute such orders. Likewise, strategies using combinations of options and/or futures positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. There are no guarantees of profit. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge and financial resources. You may lose all or more than your initial investment. You should not rely on any of the information herein as a substitute for the exercise of your own skill and judgment in making such a decision on the appropriateness of such investments. Opinions, market data and recommendations are subject to change without notice. Reliance Capital Markets II LLC shall not be held responsible for any actions taken based on this website or attached links. Parties acting on this electronic communication are responsible for their own actions. Past performance is not necessarily indicative of future results.