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22 Apr 2024
Agriculture, CME, Corn, Cotton, Dow Jones, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: APRIL 8 – 19

Corn continued its slow bleed lower over the last couple weeks with no major bullish news to turn this market around. US weather may slow planting down to end April a bit but not enough for markets to begin to worry anytime soon. Argentina’s rain will continue to slow harvest as the discrepancy between the USDA and South American reporting services remains a mystery. The bounce to end the week was due to escalation of the Israel and Hamas/Iran fighting in the middle east.  According to Reuters the US EPA is expected to announce plans to temporarily waive restrictions on higher-ethanol gasoline blends this summer. This market is at the mercy of funds and weather which currently aren’t helping prices higher.

Via Barchart

Beans continued lower as they lost another 20+ cents this week even with the big up day on Friday. Beans need any good news they can get as you can see from the chart below it has been a rough few months. Soybean oil has also had a rough go lately as bullish news is lacking in the soybean complex. The size of the bean harvest with the USDA and CONAB numbers still far apart will be the biggest factor moving forward as we need all the information we can get. We did get close to the technical support which is good to see a bounce there.

Via Barchart

Equity Markets

The equity markets continued their recent struggles as tech and AI stocks have given back some recent gains. Pullbacks are healthy for markets, especially after the run we have had to start the last few months being so concentrated, but sticky inflation and war escalation provides some problems to monitor as earnings are set to ramp up next week.

Via Barchart

Other News

  • Israel retaliated against Iran overnight continuing the escalation of tensions and war in the middle east.
  • The USD keeps moving higher as the June USD Index went over 106 earlier this week.
  • Cotton has struggled of late as a lack of demand on the global scale and no weather issues yet in the US pulled it back from recent highs.

Via Barchart

Drought Monitor

Here is the current drought monitor as we head toward planting with subsoil moisture a focus.

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 Mar 2024
Agriculture, CME, Corn, Grain, Hedging, Market Commentary, Market Updates, Other News, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: FEBRUARY 9 – MARCH 8

Corn has managed to peel off its recent lows despite no major changes in the market. South America’s harvest is moving right along, while the crop appears to be smaller than initially anticipated, the increase in acreage seen will still likely make this a record crop. The March USDA Crop Report gave a little ground in their estimates for South American production of soybeans but slightly raised the estimates for production in Argentina for corn. These changes were inconsequential to any market movement as CONAB numbers this week will be the next data to give the market more direction.

Via Barchart

Soybeans got some good, but not great, news in the USDA report with the USDA slightly lowering the production in Brazil. While many private estimates in South America are still lower than the USDA’s, this shows that the USDA believes the others may be right but are not yet willing to give all their production back. This week’s CONAB numbers will be worth keeping an eye on. Basis has been slowly rising during harvest, hinting at this crop being smaller than expected. Continued gains following Tuesday’s report would be welcome as the further we can put the lows behind us, the better.

Via Barchart

Equity Markets

The equity markets continued their grind higher with a broadening in recent weeks to other names outside of the Magnificent 7. With slower job growth and a slightly higher unemployment rate, the Fed appears to be getting what they aimed for in a soft landing, but inflation is still sticky. The Fed may begin cutting rates in the second half of 2024.

Via Barchart

Other News

  • The stock market continues to make all time highs while AI stocks have driven this rally, some rebalancing appears to be occurring.

Drought Monitor

Here is the current drought monitor as we head toward planting with subsoil moisture a focus.

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].

12 Feb 2024
Agriculture, CME, Corn, Dow Jones, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: JANUARY 26 – FEBRUARY 9

Corn has had a rough 6 months and continued lower with bearish sentiment and funds being short. The USDA report had higher Brazil corn production than the CONAB numbers by 10.25 MMT. The market has been looking for any good news to help put a floor in and that has not materialized. The one bright spot in exports is that we are ahead of pace to both Japan and Mexico for the year while China’s demand has been poor heading into the Lunar New Year. The USDA report pegged 23/24 US corn stocks at 2.172 billion bushels, close to the pre-report estimates.

Via Barchart

As bad as the news, or lack of news, for corn has been, the news for beans has been worse. In this week’s USDA report the US bean stocks came in at 30 million bushels higher as exports struggle. Brazil bean production came in above expectations as well with a 156 mmt production (trade estimate of 153.15mmt). With a quiet period occurring during Chinese Lunar New Year it is unlikely to see strong exports and weather is neutral to bearish in South America.

Via Barchart

Equity Markets

The equity markets continue to climb as the S&P 500 closed over 5,000 for the first time on Friday. The market has been pulled higher by the same stocks that have gotten it to this point in the magnificent 7 and AI stocks rallying. Analysts are debating whether the rally should broaden in 2024 or remain top heavy as it has started. The Fed will likely keep rates where they are until at least the summer.

Via Barchart

Other News

  • The bearish USDA report continued to weigh on the markets as South American production came in above expectations, still higher than many private estimates.
  • Thanks to Chip Flory and Davis Michaelson for having Jody Lawrence on their internationally known and critically acclaimed AgriTalk radio program last Friday. Here is the link.

 

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].

 

01 Dec 2023
Agriculture, CME, Corn, Futures, Grain, Hedging, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: NOVEMBER 9 – DECEMBER 1

Corn has had a rough month as it continues its sideways to lower grind after briefly touching $5.20 in October for the March contract. While there has not been any major market news to direct the market a strong weekly export report this week was welcome to the market that had been bleeding lower. The last few days saw a nice reversal, seeing a 14-cent rally off this week’s lows. Basis has taken a nosedive in many areas of the country hinting that there may be more corn out there than initially expected. With harvest all but wrapped up for most of the country it will be worth keeping an eye on whether farmers store the corn and hope for better basis or get it off their books to pay back operating loans at the highest rates we have seen in years. Brazil’s weather remains about the same with beneficial rains expected over the next couple of weeks in the drier areas north and the south remains wet.

Via Barchart

Soybeans have fallen over the last couple of weeks but is in a sideways trade in the big picture. Exports were not as strong as corn but better than expected. Brazil’s weather is the main focus for beans right now as the north is drier than normal and the south is still wet. The bean demand from China is welcome, as always, but sustained demand and not just demand while Brazil is having logistic issues will be important. The amount of rain in Brazil next week will be the main market mover until the report on Friday if we get some surprises.

Via Barchart

Equity Markets

The equity markets had a great November seeing strong gains across the board as the Fed speak has turned dovish and inflation continues to cool. The markets are pricing in the Fed beginning to cut rates in the first half of 2024 while the general consensus by large companies and funds is that a mild recession is still in the cards next year. The big names had a good month and the 10-year note fell, but it was encouraging to see some laggards join the party. The end of the year always involves some shuffling, but economic data will continue to move the markets now that earnings are past.

Via Barchart

 

Other News

  • Charlie Munger passed away this week at the age of 99. A longtime investor and one of the brightest minds for financial markets the Berkshire Hathaway investor left his mark and knowledge on the financial markets.
  • The next WASDE Report is Friday, December 8 at 12 ET
  • Brazil is set to join OPEC+. Brazil produces about 3.7 million barrels a day which makes it a top 10 oil producing country.
  • The ceasefire between Israel and Hamas ended as hostage swap negotiations stalled. The unrest in the Middle East will continue to dominate headlines.

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].

 

09 Nov 2023
Agriculture, CME, Corn, Cotton, Grain, Market Commentary, Market Updates, Other News, Research, Risk Management, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: NOVEMBER 9

The November USDA Report raised US yields and ending stocks. From what we have been hearing about yields in the eastern corn belt the rise in yields was not that unexpected while a 1.9 bu/ac jump higher to 174.9 was not quite expected. Rarely does the November report differ so much from the Sep/Oct yields, but the yields in IL, IN, and OH made up for losses seen in the western corn belt and plains. Current support is at $4.67 for Dec corn, but a close below that could lead lower. If that holds, we should expect the sideways trade we have seen for the next month+. US corn yield 174.9 bpa. Us corn production 15.234 billion bushels.

Via Barchart

Soybeans had seen a good run over the last couple of weeks until the USDA report took a hit. While beans are still well off their lows the report’s reaction saw beans lose 20 cents. Like corn, soybeans saw their yield increased to 49.9 bu/ac. The Chinese demand situation and northern Brazil’s dry weather have been bullish for beans and will be a bullish talking point if they last and the main news moving forward. US soybean yield 49.9 bu/ac. US soybean production 4.129 billion bushels.

Via Barchart

Equity Markets

The equity markets had their longest winning streak of the year in the past couple weeks, climbing back from the latest move lower. Inflation is cooling and the Fed appeared to be done (for now) with changing rates which allows the market to take a deep breath as a “soft landing” appears attainable. Fed Chair Powell today said that he is not confident the Fed has achieved sufficiently restrictive rate to bring down inflation, allowing for some concern of further rate hikes. While earnings have not been stellar across the board strength in some important areas has given the markets fuel for this most recent rally.

Via Barchart

Cotton

Cotton is a supply and demand story right now with ample supply and a lack of demand. World geopolitical issues and the risk of a recession have kept buying down as producers do not want to be stuck with inventory nobody wants to buy.

PRICES

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].

 

02 Oct 2023
Agriculture, CME, Corn, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report, Weekly Prices, Wheat rcmagserv 0 comment

USDA September Quarterly Stocks Report Overview

First Glance:

Overview:

The Quarterly Stocks report added to the recent misery with larger than expected bean and wheat stocks while corn stocks were below expectations. With minimal adjustments to the 2022 final numbers, the market was already on the defensive in early trade as a brutal combination of week, month and quarter end collide with the probable US government shutdown to push all of the bulls out of the picture. The charts look terrible for beans and wheat as beans have now moved into a bearish posture after the summer strength while corn continues to grind in the $4.70-$4.90 range. The bottom line is that the USDA took away part of the only potentially bullish story in beans while reminding everyone that the world grain markets are well supplied after Brazil and Russia’s record crops and their willingness to be the world’s cheapest source of corn and wheat.

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].

17 Sep 2023
Agriculture, Cash Basis, CME, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: SEPTEMBER 1 – 15

The September USDA Report this week did not give the bulls much to work with, having yield come in above estimates at 175.8 bu/ac and increasing planted acres by 800,000. The increased acreage and yield would still result in a record crop of 15.134 billion bushels despite the drought conditions that bookended this growing season. The largest sale of corn to China since April occurred this week as they made a purchase at the lowest prices in months even with a strong USD. While the markets trade the USDA report, the cash markets in areas are telling a different story with strong seasonal basis and poor crop ratings. Combines will get rolling in the coming weeks and will tell the story of this crop.

Via Barchart

Soybeans fell following the report as well, with the numbers coming in close to expectations but not enough to spark high volumes of buying. The US soybean yield of 50.1 bu/ac following the brutal heat over the end of August and start of September did damage to this crop, but to what extent is hard to tell. The soybean balance sheets are tight for ending stocks and any lower yield from here would eat further into it. The soybean crush numbers were disappointing to end the week, but the stocks were low hinting at the lack of soybeans out in the market currently.

Via Barchart

Equity Markets

The equity markets have been mixed the past couple weeks with various economic data coming in including CPI of 3.7%, slightly hotter than expected, for the month of August. The markets will continue to process data now that earnings are mostly done with, and the Fed is unlikely to raise rates again. The soft landing is still in play, but any economic surprises could derail that.

Via CNBC

Drought Monitor

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

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].

 

05 Sep 2023
Agriculture, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: AUGUST 21 – SEPTEMBER 1

Corn has been range bound lately looking for anything to give it direction. The heat and dryness currently happening across most of the US is bullish, but the rains and cool weather before may have given this crop enough to weather the heat. There has been some rain added to the forecast but far enough out to not get too excited about yet. Exports remain steady and within expectations with no major changes expected. Corn has been held down with wheat while Russia sells their wheat for cheap on the world market to pay for the war in Ukraine. Last week’s Pro Farmer tour came back with a 172 bu/ac yield for the US, below the latest USDA report by over 3 bu/ac. While many estimates think the latest USDA is still probably too high, a 172 yield is closer to other estimates even with the current heat. The long weekend always allows for news to change and create a volatile trade to start next week.

Via Barchart

Soybeans fell this week following helpful rains before the heat. The Pro Farmer tour estimated the US crop to be 49.7 bu/ac, below the USDA projection of 50.9 bu/ac. The soybean balance sheets are tighter than corn and will only get worse the more this crop shrinks down the stretch. New crop sales are well behind USDA projections of an 8% decrease for the 23/24 marketing year, currently running 37% behind last year’s pace. With a shrinking crop it is hard to expect export sales to significantly ramp up but if drought conditions continue with heat and river levels stay low we could see logistic problems again this year. The next few weeks will be important to finish this crop but with harvest approaching most of the damage has likely been done.

Via Barchart

Equity Markets

The equity markets rallied over the last two weeks with some important stocks posting strong quarters such as Nvidia. After a tough August the markets will look to bounce back in September with economic data and Fed decisions in the coming weeks.

Via Barchart

Drought Monitor

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

 

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].

21 Aug 2023
Agriculture, CME, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: AUGUST 4 – 21

Corn had a rough two weeks with the cool and wet weather that covered large areas of the US coming just in time on a stressed crop. The August 11 USDA Report came in with a 175.1 bu/acre US yield, slightly below trade estimates. This yield seems very reasonable with the early drought stress and the recent rains to help stabilize the crop. The scorching heat and dry weather coming to most of the US the next week+ will stress the crop but the areas that are no longer experiencing drought conditions (see drought charts below) are positioned to handle it. The ProFarmer crop tour is this week and will give insights into what to expect from this crop and give insights we do not get from the USDA. If the USDA updates the planted acres lower from 94 million in September that will be news the market has eyes on.

Via Barchart

Soybeans have held together well over the last couple of months with the low acreage number supporting it. The weather was not great for beans early on, but like corn, the last couple of weeks have been very beneficial and the heat over the next 10 days can cause some issues. The USDA updated their yield estimates to 50.9 bu/acre, below the trade estimates and previous report but also a reasonable number with how the growing season has gone so far. Bean demand appears to be increasing and if this continues into harvest, momentum behind beans could give it another push that corn seems to be missing. The ProFarmer crop tour will be the news this week along with the hot dry weather, an adjustment to acres down the road is a variable that can change the look of this crop.

Via Barchart

Equity Markets

The equity markets have struggled the last few weeks as tech stocks stopped pulling the markets higher and seasonal trends took over. Earnings season is almost over with only a few big names left to report. Inflation and the Fed will be the news moving forward as markets are still unsure what their next move is.

Via Barchart

Drought Monitor

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

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 Aug 2023
Agriculture, CME, Corn, Grain, Market Commentary, Market Updates, Podcast, Research, Risk Management, Soybeans, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: JULY 20 – AUGUST 4

As quickly as corn rallied to get back over $5.50, the rains and favorable forecasts for August led it back below $5 just as quickly. The rains in late July provided much needed moisture over much of the corn belt, but as you can see in the drought charts below, varying levels of drought conditions remain. The forecast has shifted drier for August but after a record hot July, August is forecasted to be cooler. Reports of how much damage the first half of summer did to this crop are all over the place, which usually means it is somewhere in the middle. A 180+ yield is probably off the table, but a 172 yield seems to be just as unlikely unless the forecasts change to hot and dry for a long stretch soon. Russia’s bombing of Ukrainian ports in Odesa and the Danube River continue as the markets seem to shrug off any new damage. Over the weekend any forecast changes, new developments in Ukraine or world news will determine what the trade does to start the week.

Via Barchart

Soybeans have a similar story to corn this week but were able to avoid the late June collapse that corn saw thanks to the low acreage number. StoneX estimate for bean yield this week was 50.5 bu/ac which would be a supportive number for beans, especially if the acreage number is accurate. China has begun showing up as frequent buyers in export reports helping the demand story that was questionable on world economic worries not too long ago. The lack of bullish news is good news for the bears as no news markets rarely tend to move higher. Weather in August will be important for this crop and next week’s USDA report will give us more information on US production.

Via Barchart

Recent News

Click HERE to listen to RCM Ag Services’ Jody Lawrence join AgriTalk a couple weeks ago to discuss the current market.

Wheat

Wheat followed corn and beans lower for similar reasons. The markets have shrugged off Russian aggression of late but will be watching over the weekend for any escalation.

Equity Markets

The equity markets suffered losses this week with a big down day on Wednesday when Fitch downgraded US debt to AA+ and earnings continue to roll in. The job market seems to be moderating as hiring was slightly weaker than the previous month. The markets are looking for numbers that will keep the economy and markets going while also giving the Fed the signal to stop raising rates. This is a fine line that can feel like walking on eggshells with a long-predicted recession still the worry of most investors.

Via Barchart

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].

 

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.