soybean Archives - RCM Ag Services

21 Jul 2023

Agriculture, CME, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Podcast, Research, Risk Management, Soybeans, U.S. Dollar, USDA Report, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: JULY 7 – 20

Corn has seen a strong rally after falling following the USDA Report last Wednesday. The USDA estimated the US crop to have a 177.6 bu/ac yield this year following the rough start to growing season with drought conditions over most growing areas. While the rains have been beneficial in providing relief, this crop needs a lot more rain in the form of soaking rains and not storms with straight line winds. If the hot and dry pattern returns expect to see prices move higher. Russia has threatened that they will treat any ship entering the now closed grain corridor as a military vessel has tensions in the Black Sea region high again. The longer this new standoff drags out the more support it will provide grains. The collapse of the USD and inconsistent weather can help support this move higher after a bearish USDA report depending on the future forecasts and technical trading.

Via Barchart

Soybeans have enjoyed a great run over the last month and half as soybeans got back over $14 this week. After a low acreage number and not an ideal start to the summer beans have had a great last 2 months. The forecast hot dry stretch coming up is expected to put more stress on this crop as we head into the end of July and start of August. With tightening world balance sheets it will be hard for funds to get over extended short but every weekend provides the opportunity for surprise rains and new market surprises.

Via Barchart

The big news of the week was Russia threatening all vessels that enter the region as military vessels, escalating the tensions and ending the grain corridor for the time being. Russia keeps attacking Odessa which will damage the remaining infrastructure and could present even more challenges if/when the grain deal resumes. The Russian ambassador to the US has said that Russia is not preparing to attack civilian ships in the Black Sea, though previously the Russian Defense Ministry announced that all ships traveling to Ukrainian Black Sea ports would be considered potential carriers of military cargo, and the southeastern and northwestern parts of the Black Sea’s international waters should be considered unsafe for navigation.

Via Barchart

Equity Markets

The equity markets continued their strength the past couple of weeks with CPI coming in slightly lower than expected (by 0.1%) at 3%. While inflation is still above the target of 2% the slow decrease over time is helping it come down while core inflation, 4.8%, follows the same pattern. The Fed decision at the end of the month is likely to result in a ¼ point rate hike as we head into earnings season next week. Tech stocks took their largest losses that we have seen recently on Wednesday as earnings have begun being posted.

Via Barchart

US Dollar

The US Dollar hit its lowest level in a year this week as the greenback fell below the 100 level. This should help ag exports be competitive on the world stage but the sharp decline from the 103-level last week was surprising.

Drought Monitor

The drought monitors below show the change in drought conditions over the last 2 weeks.

Podcast

With every new year, there are new opportunities, and there’s no better time to dive deeply into the stock market and tax-saving strategies for 2023 than now. In our latest episode of the Hedged Edge, we’re joined by Tim Webb, Chief Investment Officer and Managing Partner from our sister company, RCM Wealth Advisors. Tim is no stranger to advising institutions and agribusinesses where he has been implementing no-nonsense financial planning strategies and market investment disciplines to help Clients build and maintain wealth and reach financial goals since

Inside this jam-packed session, we’re taking a break from commodities, and talking about the world of equities, interest rates, tax savings, and business planning strategies. Plus, Jeff and Tim delve into a variety of topics like:

The current state of the markets within the wealth management industry
Is there a beacon of hope, or is it all doom and gloom for the markets?
Other strategies to think about outside of the stock market and so much 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].

31 Mar 2023

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

AG MARKET UPDATE: MARCH 24 – 31 USDA REPORT

The USDA prospective plantings and quarterly stocks reports were released today, March 31^st, with a mix of news. The report pegged this year’s crop at 92 million acres while the trade estimates were about 91 million. This led to a mixed trade as pre-report strength faded with futures ending mixed for the day. Current US weather conditions and the expectation of a slow start to planting could lead to this number falling, it is unlikely we will see a number higher than this the rest of the year, similar to last year. Corn stocks were lower than estimates by 69 million bushels and over 350 million bushels lower than last year.

Via Barchart

Soybeans received a boost from the report as with lower acreage and stocks than expected. The planted acreage number came in at 87.5 million acres, lower than the 88.24 million trade estimate. The quarterly stocks were 247 million bushels lower than a year ago, continuing to show the tightness on the balance sheet. South America still has some uncertainty around their crop, but we should get a better idea in the coming weeks. Both numbers from today’s report are seen as bullish for the market.

Via Barchart

Wheat saw some bearish numbers with higher planted acreage and higher stocks than pre-report estimates. 49.9 million acres, 1 million over estimates, and 946 million bushels in stocks, 934 mbu estimate, were both bearish while the price did not overreact. Wheat will follow corn’s lead for now with many questions still surrounding the conditions in the southern plains and the Black Sea.

Via Barchart

Cotton’s bounce this week back to over 83 cents was very welcome after a couple weeks of lower trade. The market did not have a major reaction to the report with planted acreage estimates coming in at 11.3 million acres vs the 11.2 million trade estimate. Speculative short covering helped cotton rally this week while spreads were also a lower than normal percent of the trade. The problem continues to remain of recession fears and how that affects companies purchases trying to weigh supply and demand.

Via Barchart

Equity Markets

Equities had another good week as investors seem to believe the Fed will relax with rate hikes and the banking fears have calmed down along with an ease in inflation pressure as we slowly move lower. Tech companies would be the beneficiary of lowering rates by the end of the year but the Fed’s recent comments would indicate they have no intention to lower rates before the end of the year. There was strength in most sectors this week.

Via Barchart

Drought Monitor

The eastern corn belt has gotten plenty of moisture, some too much, so far this winter with the western corn belt needing more heading into the spring.

Podcast

The current state of the markets within the wealth management industry
Is there a beacon of hope, or is it all doom and gloom for the markets?
Other strategies to think about outside of the stock market and so much more!

Via Barchart.com

Contact an Ag Specialist Today

04 Nov 2022

Agriculture, Corn, Cotton, Dow Jones, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, U.S. Dollar, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: OCTOBER 21 – NOVEMBER 4

Corn had small losses on the week again as it has been range bound the last month. The market holding at this level certainly is not a bad thing when it traded $1 lower than current levels in July, it just needs a catalyst to push it one way or the other. The catalyst could be next week’s USDA Report as there could always be a surprise or two for the market. Many estimates see the USDA raising production from the October estimates, but by how much will be the question. Ultimately with US harvest coming to a close and South America ramping up, the global outlook and weather will begin to dominate the markets. The US will also need plenty of moisture over the coming weeks and winter to 1. Raise river levels to help grain exports and 2. Improve subsoil moisture heading into 2023. Exports remain underwhelming and will likely be lowered for the year in next week’s report.

Via Barchart

Unlike Corn, Beans have had a much wider range after an initial flat start to harvest have rallied back hard over the past 2 weeks. This move higher is welcome and appears to be heading toward a test of the highs from early September – can it break through? The USDA report will be the big news next week along with any news out of South America for weather and China potentially coming out of zero covid restrictions. Like corn, the USDA will likely raise US production next week and may lower exports. For any sustained move higher China will need to be a regular buyer and South American conditions would need to become less favorable.

Via Barchart

Cotton has had quite the week with 4 days that traded limit up at one point. With a lot of speculative positions in the market being short, this could be seen as a short covering rally as specs must exit their positions before expiration. On the physical side, the global cash market is a mess. Mills have massive inventories of both cotton and converted goods with no companies buying. The lack of buying by apparel companies shows their concern for the holiday season as inflation and market uncertainty will weigh on spending this year.

Via Barchart

Equity Markets

The equity markets have gained over the last 2 weeks; however, gains were muted after the Fed raised rates another 75 points earlier this week. This was expected but the comments by chair Powell after they came out were more hawkish than expected setting up an interesting point in next month’s meeting. Powell said the Fed is not likely to slow down yet setting up the potential for another 75 points in December, while analysts were leaning towards 50 before he spoke. The unemployment rate did tick higher in October while many companies also announced hiring freezes and grim outlooks for the first half of 2023. Crude oil spiked back above $90 a barrel on Friday continuing to bolster energy stocks. Midterm elections next week will also be closely watched as it may lay out what, if anything, will be done over the next 2 years.

Via Barchart

Drought Monitor

Podcast

Are the Fed’s hikes starting to dampen inflation? Oil, grains, and metals have all fallen from their highs. But the rarely spoken of Cotton market was one of the first to crack…falling from 1.58/lb to 0.95/lb in just a few short days. We’re digging into this sharp drop and just why and how Cotton is involved in seemingly everything with RCM’s very own cotton king, LOGIC advisors Ron Lawson.

In this episode, Ron is giving us the low down on how and why he believes it’s not Dr. Copper which acts as the global economic barometer, but how Cotton is the real Canary and leading indicator on global demand. In between those talks, we’re covering all things Cotton including crop insurance, irrigated vs dry land, the scam that was Pima and Egyptian Cotton, the process of cotton – which countries have it, which want it, ginning it, spinning it, dyeing it, global commodity merchant co’s pushing it around, and even micro-plastics, climate change, and how Cotton always flows to the cheapest labor source. Finally, we’re walking in some high Cotton putting Ron in the hot seat. Will we ever get the growth back? Tune in to get these critical hot takes — SEND IT!

Via Barchart.com

Contact an Ag Specialist Today

29 Jan 2021

Agriculture, Corn, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

Ag Market Updates: January 17 – 29

Corn gained on the week as it made up for the fall to end last week. Export numbers continued to be strong and Brazil’s harvest has faced delays. A huge corn sale to China announced Tuesday morning was welcome news as well as record ethanol bookings into China through ADM helped. This looks to continue into the spring as Brazil is struggling with their pace of shipping as well as the harvest delays. US corn is still very competitive pricing on the world stage which is also supportive. This is important because it keeps exports going as demand continues to ramp up around the world as well as when there is a selloff by the funds it is a buying opportunity for other countries. The volatility of the last week has been important to keep an eye on as we have seen some wide ranges traded within one day. As we have seen some big run ups in a day, we have also seen fund selling to bring it back down. As you can see in the chart below the intraday range over the last week has been larger compared to how we got here. As flooding continues to cause harvest delays in Brazil, mostly in beans, this will be important to keep an eye over the next few weeks heading into corn harvest.

Via Barchart

Soybeans lost again this week with most of the losses coming from last Friday’s sell off and have seen a good bounce back from the low of $12.98 Monday morning. The flooding in Brazil has caused delays and other issues with bean harvest. Despite large exports the past week the early rallies on Thursday fell through to losses on the day closing below the 20 day moving average. Funds have been selling on the recent rallies which, like today, may continue to be the trend as funds take profit on this impressive run. The outlook has remained bullish as fundamentally the demand is still there and South America’s struggles may continue hurting their yield. Argentina’s crop condition is below 20% good/excellent and last year it was at 70% this time last year to shed some light on how much their crop is struggling. China will need to continue buying any dip down caused by fund selling but if they stop and funds sell the immediate support of sales would disappear. After this run up a pause and drawback may have been needed as we await South America’s harvest but how the month/week ends will be critically important heading into February.

Via Barchart

Dow Jones
The Dow lost on the week amongst a lot of volatility (I’m not going to get into the whole GME, AMC, etc drama). Vaccines continue to roll out as states struggle to implement their vaccination strategies while on the federal side the government is trying to get states more so they can ramp up a somewhat dysfunctional rollout. Despite the struggles the good news is we can see the light at the end of the tunnel. Many investors are bullish for 2021 as we come out of a year long lockdown while some still think we are due for a correction at some point.

January USDA Report
The RCM Ag team had a roundtable discussion following the January USDA report. Here are the links to view/listen to it on your platform of choice.

Weekly Prices

08 Oct 2020

Agriculture, Corn, Crude Oil, Dow Jones, Market Commentary, Market Updates, Soybeans, Weather, Wheat rcmagserv 0 comment

AG MARKET UPDATE: OCTOBER 3 – 9

Corn followed beans higher this week as exports continued and Brazil’s weather is still questionable as their season starts. Corn harvest in the US is 26% complete as favorable weather looks to allow for harvest to continue across the country. As Chinese buying continued following holiday, markets are keeping an eye on their purchases as the Chinese government changed laws in what can be fed to hog herds as they continue to recover from ASF. By not allowing for swill (food waste and garbage) to be fed to hogs anymore the demand for corn and meal for feed looks to increase, but it is hard to tell how much swill feed will need to be replaced. Ethanol demand has remained lower than normal as the pandemic continues, but with lower demand has also lowered production. The lower production has lead to tightening in stocks to their lowest level in 8 years. If/when ethanol demand rebounds, look for a boost in corn purchases for ethanol use to replenish stocks and meet demand. Keep an eye on the USDA yield estimates on Friday.

Via Barchart

Soybeans kept the rally going this week on weather concerns in South America and exports continued in large amounts. South America remains in a dry pattern that could turn into a drought if they do not get the much needed and forecasted rain in the next couple of weeks to get the beans in the field in some major growing areas. Harvest continued across the US this week as harvest is seen 36% complete as favorable weather across much of the US has allowed farmers to get off to a great start. As China came back from holiday the buying continued as feed demand in China has started to pick up despite herd sizes only being about 65% of what they were before ASF. Fund buying has also continued this week as funds now are long 1.4 billion bushels (about 10% of the expected world production in 20/21) of beans. Prices will once again be paying attention to the USDA report on Friday but do not expect anything like the last report. As you go through harvest we suggest not storing any beans as the market is currently inverted (Nov prices being better than anything in ’21) showing the market wants your beans now. Not seeing a carry in the market makes it hard to hold the beans when selling the physical and getting long futures if you believe the markets are going higher is an option.

Via Barchart

Funds continued to get long wheat this week, with some profit taking on Thursday, helping fuel the rally that other grains have seen. Weather problems in other areas of the world are helping markets move as parts of Russia remain dry and the Black Sea area has been dry but is forecasted to get much needed rain this week. Argentina like Brazil has been dry but looks to continue their dry pattern unlike Brazil. Stocks are expected to be lower in the report on Friday from the September report.

Via Barchart

Cotton prices rallied this week as Hurricane Delta heads toward the Mississippi Delta. The fact that there is still plenty of time for another storm before harvest after Delta worries farmers that one storm may be fine but another would present major issues. Cotton has seen a steady rise in prices since the lows back in April. Exports were good this week as there were little cancellations and strong sales to Vietnam.

Via Barchart

Crude Oil
Crude saw a boost this week as Hurricane Delta has shut down production in many parts of the Gulf of Mexico. This is typical of prices whenever a hurricane is in the gulf as reactions to what may happen is usually worse than the outcome.

Dow Jones
The Dow continues its bounce back despite back and forth tweets from Trump and Pelosi regarding a new relief bill and what it should look like. Big tech stays in the news as Amazon and Facebook are continuously being looked at for anti-trust violations by a bipartisan group, not much is expected to come from this but worth noting.

World Weather
Brazil has been dry causing some delays in planting but some rain this week and cooler temperatures are in the forecast so markets will keep an eye on any changes there. Hurricane Delta barrels toward the US as farmers in the south look to try and get their crops out ahead of any rain that could cause damage, especially to cotton in the Delta.

Via Barchart.com

31 Jul 2020

Agriculture, Corn, Cotton, Dow Jones, Market Commentary, Market Updates, Other News, Soybeans rcmagserv 0 comment

Ag Markets Update: July 25 – 31

As weather across the country continues to be supportive for the crops corn prices have dropped. The past few weeks of timely rain and cooler temperatures has put a trend line or record national yield very much in view. From talking to farmers across the country many think this has potential to be one of their best crops and as great as that is everyone knows the larger the yields the lower the prices tend to be. With China well behind on their phase 1 trade agreement purchases, corn will need to get support elsewhere unless China decides to ramp up their purchases in the second half of 2020. Keep an eye on the flooding in China as they have lost over a million acres of farmland and will tighten their supplies. The higher crop conditions this week did not help prices either as they came as a surprise.

Soybeans and corn are in a similar situation where large yields are very much in play due to the weather of the past month and what looks to be coming. Soybean exports continue along at a good pace but nowhere near the Phase 1 agreement numbers that were expected. If China can ramp up their purchases in the coming months beans can get a boost that is unlikely to come without a weather problem. The good export news of late has been offset by good weather and higher expected yields which is frustrating seeing bullish news be uneventful for prices.

After a short term pull back from the near term highs markets bounced off a technical low and appear poised to give the highs another run. Weather watchers will be tracking hurricane Isaias and it’s potential impact to the delta over the weekend. In many cases the fear of hurricanes has been bigger than the actual punch. In reality, following the storm days in advance does little good and is often a story of buy the rumor and sell the fact. Look for prices to test the 65 cent level and be prepared to increase hedge protection above 63.50.

DOW Jones

The Dow continues its slight downtrend this week as Covid-19 cases remain high in many parts of the country. Despite good vaccine news coming out this week as several promising candidates move onto the next phase of trials, the Dow fell again. All eyes were on Capital Hill this week as Google, Facebook, Amazon and Apple’s CEOs were questioned by politicians looking at anti-trust issues. These were not huge market movers but something to keep an eye on as these companies have helped lead the charge up from the lows back in March along with other big tech companies.

Via Barchart.com

24 Jul 2020

Agriculture, Corn, Cotton, Market Commentary, Market Updates, Soybeans, U.S. Dollar rcmagserv 0 comment

Ag Markets Update: July 18 – 24

Corn held relatively steady this week after falling the past few weeks due to the June crop report. Exports have stayed consistent, but the lack of any weather problems is keeping corn in the range it is in. The cooler forecast with enough rain to support the crop is going to prevent upward price movement with the possibility of a 178 (trend line) yield still in play. China is the main buyer of U.S. Corn right now as major rains that are threatening the Three Gorges Dam area and throughout the Hubei Province have wiped out much of the non-U.S. crop.

The U.S. Department of Agriculture announced China’s largest ever corn purchase from the U.S. on July 14, totaling 1.762 million metric tons for delivery in 2020-21, and U.S. Grains Council President and CEO Ryan LeGrand tells Agri-Pulse that it’s more proof that demand is on the rise.

“We’ve always believed the demand is there,” LeGrand said. “They have been suffering from African swine fever, but they’re ringing the bell on these corn purchases.” (Ag Week)

Continued Chinese buying would be some good bullish news to balance out the bearish good weather news.

Soybeans gained on the week to reach the $9.00 mark again. China made several large purchases of U.S. soybeans this week despite the continued rising political tensions. The same destructive rains in the Hubei province that are wiping out corn will continue to have China buying U.S. ag products to make up for their potentially huge loses. The crop condition report this week was uneventful and as we approach the important stage for soybeans they look to be in good shape with the forecast being friendly as well. Beans have seemed to have had support at the 20 and 50 DMAs recently, so that should help moving forward even with the positive forecast.

A West Texas drought has been supportive for prices, but the lack of demand is the ultimate issue as prices can only move so high. If a healthy amount of rain moves into West Texas, look for prices to fall as a good yield and no buyers would present another problem. A weakening U.S. dollar may also provide some help as a lower U.S. Dollar means U.S. cotton is more affordable to other countries. In Other News see more info about the weakening U.S. Dollar.

U.S. Dollar
The Dollar has fallen 9.1% and made new 9 ½ month lows in today’s trade. With record U.S. debt and another stimulus package on the way, the Dollar has devalued endlessly by continuously running printing presses in DC. This is generally good for commodities as it indicates raw material inflation is on the horizon and that U.S. prices become more competitive as other currencies rally against the Dollar. Even though mildly helpful for the Ag industry, it’s not enough to fix the current oversupply problem.

(Bloomberg)

15 May 2020

Agriculture, Corn, Cotton, Crude Oil, Soybeans rcmagserv 0 comment

AG MARKETS UPDATE: MAY 8-15

Corn planting in 2020 continued its strong pace last week as the crop is estimated to be at little less than 70% planted. This is well ahead of last year’s pace and with favorable weather outlooks for the rest of May, the crop should be 100% planted by June.

USDA Report
The May USDA Report came out on Tuesday and it’s safe to say it came of little surprise to most – the ‘19/20 US Corn Stocks were a little lower, while ‘19/20 World Corn Stocks were a bit higher.

The main adjustment was made in the Ethanol Corn numbers in ‘19/20 where they cut 100 million bushels. With Ethanol production averaging 17% lower than last year’s number through August, another 100 million bushels would need to be cut to meet lower demand. Even with the country opening back up, there are still uncertainties on demands as more people are interested in a car ride over jumping into a plane. Ultimately, this report just confirmed what everyone already knew: the world is drowning in corn. With a great start to planting and estimates of a trend line yield of 176+, this problem looks to continue for corn as the year goes on.

U.S. Soybean planting, like corn, continued its streak. As mentioned last week, China is well behind pace to meet the amount of ag goods purchased from the U.S. from Phase 1 of the trade agreement meaning U.S. bean prices are at the mercy of Chinese consumption. As political tensions continue to hover over the markets, prices will be dependent on U.S. and China political and/or export news. With the May USDA report being neutral to bearish, it has turned into a waiting game in the bean market as they continue to wait for buyers.

In the meats sector there is currently a disconnect between futures and cash prices; futures price is roughly $15-20 under the current cash price showing an immediate need for beef. The market is showing the packer margins are phenomenal and because of that, the packers are trying to throw the ranchers a bone by offering over the futures price, but not anywhere near the margin difference they are making. In essence, the packers are buying for relatively cheap and selling for a lot more than they usually would as supplies are tight. This is part of the reason the Trump administration is looking into the meat industry, as several large players are foreign-owned. China will not be buying any cattle from Australia due to their criticism over their handling of COVID-19, so some of that demand may be filled from the U.S. but seeing as we are struggling on our end with production, that would put another strain on the market.

Cotton looks to be experiencing a short squeeze this week on July futures. The Midsouth is behind on planting due to cool weather over the past couple of weeks; soil temps need to be above 65 degrees for planting and the mid-south has had several nights in the low 40s in May.

Cool temperatures are a little surprising this time of year, but I think we’ll get through that fairly unscathed. It’s warming up pretty fast, so it shouldn’t hurt us too badly. Dan Fromme (AgFax)

Cotton needs manufacturing around the world to ramp up as countries begin to drive demand. The USDA report this week was neutral-to-bearish and cotton has managed to hold on to most of its gains making short speculators nervous. They’ll be keeping a close eye on Thursday exports as there’s only one month remaining in the July futures contract. Buying from China, like with any other commodity right now, would be a welcome sight.

Relief Package
The House is expected to vote on another round of financial stimulus equaling out to $3 trillion. In this bill, $16.5 billion may be earmarked for direct farm payments and help for the ethanol and biofuel industry. It may also direct the USDA to reimburse any livestock producer that had to euthanize animals due to closed processing facilities (more on that here).

Tag: soybean

AG MARKET UPDATE: JULY 7 – 20

AG MARKET UPDATE: MARCH 24 – 31 USDA REPORT

AG MARKET UPDATE: OCTOBER 21 – NOVEMBER 4

Ag Market Updates: January 17 – 29

AG MARKET UPDATE: OCTOBER 3 – 9

Ag Markets Update: July 25 – 31

Ag Markets Update: July 18 – 24

AG MARKETS UPDATE: MAY 8-15

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