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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.

Via Barchart

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.

Via Barchart

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.

Via Barchart

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

30 Dec 2021
Corn, Dow Jones, Grain, Market Commentary, Market Updates, Podcast, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: DECEMBER 22 – 29

Corn continued its rally until it faced some selling on Tuesday. The dip on Tuesday should be expected when a market starts running this hot and people like to take their profits. The South American weather has not changed and remains hot and dry in southern Brazil and Argentina. Northern Brazil may have the opposite problem as they are expected to see heavy rains that could lead to flooding delaying the start of harvest in the region. The weekly ethanol grind was good again this week as we are 17 mbu above the weekly pace needed to meet the USDA’s corn used for ethanol projection. As Americans continue to travel despite the new wave of Omicron, we can expect an increase in corn use in the January USDA update. The air has not been let out of the market, despite what “the sky is falling” people said after Tuesday’s dip, as there is still a lot that can happen in the coming weeks and months.

Via Barchart

Soybeans saw a big boost the first trading day after Christmas as the weekend weather did nothing the alleviate the concerns for South America’s production. Beans saw the same profit-taking on Tuesday but are still seeing its best levels since August. The same factors affecting corn in South America have the same effect on soybeans. With inflation looking to continue into 2022, we could see higher values in many commodities along with grains. Rising world vegetable oil prices have helped beans during their run along with wide crush margins. As we said last week, corn and beans seem to be on the same boat for now unless something significant happens. Any unexpected rain to help the crop would probably result in a panic selloff as usual.

Via Barchart

Dow Jones

The Dow had a good week as we have seen a good rally around Christmas and into the New Year’s holiday. The Omicron variant continues to rip through the U.S. and the world as events are canceled, and restrictions are placed back. With the rate of this new wave spreading, it will be interesting to see how long the rules stay if the virus runs its course faster than usual. The CDC changing the quarantine requirement from 10 to 5 days is also welcome news to the market as it appears we may be getting closer to fewer restrictions across the board and workers getting back quicker. At the close on Wednesday, the Dow is up over 19% for the year (wow!).

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

27 Dec 2021
Agriculture, Corn, Market Commentary, Podcast, Research, Soybeans, Wheat rcmagserv 0 comment

What’s Driving the Grain Markets Heading into 2022?

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.
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Listen or watch:
23 Dec 2021
Corn, Dow Jones, Grain, Market Commentary, Market Updates, Podcast, Research, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: DECEMBER 9 – 22

Since early December, corn has had a great run as South America’s dryness continues and delays planting in some areas. The corn crop is only about 60% planted in Argentina, which is the slowest pace on record for late December. Anything planted after January 10th will probably experience some yield drag. Their planting rate is on par with last year, but the weather has been far dryer and looks to continue going forward. As you can see in the chart below, March corn has rallied 90+ cents since early September. With continued strong basis and raises at prices, farmers have been given a gift but when the farmers choose to claim the gift and how long the gift stays available is another question. If Argentina and Brazil stay dry, this rally could continue, and we could retest the summer’s highs. Ethanol margins shrunk, and crude fell but remain at much higher than average levels, which will also support corn.

Via Barchart

Soybeans, like corn, have enjoyed a nice rally as South American weather issues cause some worry.  This week, Brazil’s bean crop had its production estimate lowered by 3 million metric tons by Parana’s crop analysis firm, Deral. While Brazil is still on pace to produce a record crop, it is not expected to be as large. They increased planting this year, so a larger crop is expected in Brazil, even with some headwinds.  The basis is holding steady around the country for beans as we head into the new year. Beans and corn are likely to move together leading up to the January USDA report.

Via Barchart

Dow Jones

The Dow had a flat week and a half with volatility due to the Omicron variant having it all over the place with several large down days followed by a good bounce. The Omicron variant’s spread has been worrisome as restrictions start to come back into play in major cities. It will be important to keep an eye on this around the holidays as we also hope to see the “Santa Clause rally.” Senator Manchin also stopped President Biden’s BBB plan as he will not vote to approve it in its current form.

Podcast

Commodity prices have perpetually soared for the past year 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

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.

Via Barchart

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.

Via Barchart

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.

Via Barchart

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.

Via Barchart

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

11 Nov 2021
Agriculture, Corn, Dow Jones, Market Commentary, Market Updates, Podcast, Research, Risk Management, Soybeans, USDA Report, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: OCTOBER 28 – NOVEMBER 9 USDA REPORT

Corn was struggling this week heading into the Nov 9th USDA report, where it saw a good bounce after its release before falling back to only finish up slightly higher on the day. The corn numbers that came out of the report were fairly neutral, with a 177 bu/acre yield and 15.062-billion-bushel U.S. production. The yield was slightly raised from 176.5 the month before but was right in line with estimates, so there was no significant reaction on that number. Overall, there were not many surprises for corn as most bullish reactions came from soybeans pulling them higher with them. With ethanol margins very profitable and crude oil staying higher, the demand side will continue to keep basis levels high. As harvest was 84% complete at the start of the week, there is still time for any weather issues to create issues to finish up harvest, but this is always expected, so being this far along is helpful.

Via Barchart

Soybeans had an excellent bounce post USDA report but finished well off the highs of the day. The yield came in at 51.2 bu/acre, down 0.3 from last month, along with lower world-ending stocks. As far as U.S. ending stocks. the USDA pegged it at a manageable 340 million bushels, slightly up from last month —these numbers are not outright bullish. South America’s weather is non-threatening right now; however, with solid world crush margins, there is not much reason for a bearish outlook heading into the winter. With funds currently flat, we may hang around this area trading until new news enters the market.

Via Barchart

There were no surprises in the wheat report,, but it did follow beans higher after a down week leading into the report. US wheat stocks came in at 583 million bushels (pre-report estimates were 581 million) and world-ending stocks of 275.80 million metric tons (pre-report estimates 276.5 MMT). Despite the recent pullback, there is still a bullish sentiment in the market moving forward for the time being.

Via Barchart

Dow Jones

The Dow has continued to trend higher this week as it has put together an impressive month despite Tuesday’s pullback. Many markets have led it higher from tech to industrials, with the new infrastructure bill playing a role.

Side note: The crypto markets have also been on a tear the past couple of weeks. It will be interesting to watch heading into the end of the year after an impressive last year and a half.

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

08 Nov 2021
Agriculture, Fertilizer, Market Commentary, Podcast rcmagserv 0 comment

The Fertilizer Forecast with Billy Dale Strader

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!

Find the full episode links for The Hedged Edge below:

Apple
Spotify

27 Oct 2021
Agriculture, Cotton, Market Commentary, Podcast rcmagserv 0 comment

Cracking The Cotton Commodities Code With Ron Lawson

The Hedged Edge is back, and we’re jumping into the thick of the commodity markets with RCM’s own King of Cotton – Ron Lawson. Cotton prices have exploded since the COVID crash, rising more than 236% from the March 2020 lows. While prices have backed off from the October 8th high, cotton is one of the purest supply + demand-driven markets around the world and has caught fire along with the global inflation bug currently running rampant across many commodity markets.

Will it be hedge fund influence in cotton that costs consumers more this Holiday season or will the continued logistical issues tie up cotton at ports send consumers scrambling to eBay for their “snuggies”? For cotton producers, merchants, spinning mills, and banks financing the backbone of the cotton supply, risk management must remain at the top of mind for the remainder of this year and into 2022 (as the current cycle is likely to continue to last for at least the next 12-18 months.) We’ll dive into the thick of it in this episode and more — Hold on to your hats and enjoy!

Follow CME Group on Twitter @CMEGroup  learn more about Agriculture Options and the new CVOL Index on their website here https://www.cmegroup.com/agoptions and here https://www.cmegroup.com/cvol. And last but not least, don’t forget to subscribe to The Hedged Edge on your preferred platform, and follow us on Twitter @ag_rcm, LinkedIn, and Facebook.

27 Jul 2021
Agriculture, Corn, Cotton, Crop Insurance, Grain, Market Commentary, Market Updates, Options, Podcast, Research, Risk Management rcmagserv 0 comment

Managing Today’s Market Risks through Short Dated Options with CME Group

It is no secret that commodity markets have been on fire over the past 12 months.   On today’s podcast we’ve brought on one of our real-life firefighters from RCM Ag – Jody Lawrence along with Tim Andriesen from the CME Group to provide us with some inside baseball knowledge of the current state of the agriculture markets and to discuss the real world application of the use of short dated options to potentially fight the current blaze of volatility surrounding agriculture markets.

As the director of Research for RCM Jody is no stranger to the podcast.  Tim, is the Managing Director of Agriculture products for the CME Group and is responsible for management of the company’s global agriculture commodities business – including grain, oilseed, livestock and dairy risk management products.

 

Find the full episode links for The Hedged Edge below:

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:

 

And last but not least, don’t forget to subscribe to The Hedged Edge on your preferred platform, and follow us on Twitter, LinkedIn, and Facebook.

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

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.