Tag: soybeans markets

10 Aug 2020

Ag Markets Update: August 1 – 7

Corn took it on the chin this week, again, as crop conditions and weather forecasts continue to point toward the potential of a record yield. With strong conditions and weather moving forward, most of the corn belt, with the exception of parts of Iowa suffering from severe drought, are running out of time for many weather factors to effect the crop. Keeping an eye on forecasts for Ohio and Michigan will be important to farmers as they could use some rain in those areas but are not desperate, yet. If the forecast continues to look promising there is not much bullish news out there to help find support with a 180 bpa crop still in play. Keep an eye on exports as we continue to see strong export numbers but little positive price reaction as a product of it. Yield estimates range from 178-183 bpa from what we have seen from across the spectrum, showing that many top experts believe a record yield could be seen this year.

Soybeans had a tough week like corn because high yields are still very much in play on top of already strong stocks. Without China ramping up their purchases to try and at least act like they are trying to reach the Phase 1 Trade Agreement; beans are running into a demand problem. Bean yields are looking to potentially be 52+ bpa with a 73% G/E rating this week saw prices take a hit. Beans and corn have been moving lower over the last few weeks as few weather issues and no large surprises in demand have come to fruition. Any problem that China has with the Three Gorges Dam area could lead to more purchases but a total failure of the dam would be a disaster as it could cause a massive loss of life along with flooding of large areas of farmland.

Cotton has seen a boost this week as it, like other raw materials have seen a boost as demand around the world starts to come back. Another supportive factor for cotton has been the continued decline in the value of the US Dollar. The threat of Hurricane Isaias effecting the crop in the SE helped give a boost early in the week but how much damage it actually did to the crop remains to be seen. If prices can breach and stay above 65 cents that would be a good level of support.

Phase 1 Trade Agreement Meeting
The US and China are set to have their first check-in meeting to assess how Phase 1 is going (spoiler alert: not great). This is on top of recent tensions over the closing of embassies and spying allegations. Not sure that anything good can actually come out of these talks but they will be worth keeping an eye on August 15th. Hopefully we see a commitment to ramp up and get a boost to start that week following.

Lumber
Lumber continues its upward trend to price levels we have not seen since 2018. Lumber is a commodity the is easily produced because of the sheer quantity of it available supply is not an issue to slow down consumption. As many purchases and contracts are done well in advance the demand has not wavered as much as the pipeline of getting it from A-Z has. In a volatile market like this, especially during this kind of positive run for price, nobody ever wants to call the top so looks like everyone may want to ride it out and see what happens.

17 Jul 2020

Ag Markets Update: July 11 – 17

Despite one of the largest single export sales to China ever, prices for the week fell. After some welcome rains in the past week in areas that were dry, favorable outlook during pollination has the potential to help make this crop large. Ultimately, as yield potential continues to look high, big bumps in corn are looking slim unless there is a surprise in forecast changes or export sales. The crop conditions continue to look strong as you can see in the chart below. We are not near/at record conditions, but still have very strong numbers at this point in the year. A dip in condition would factor into price movement as well, but don’t don’t plan on that for a big boost towards the end of the month.


Soybeans had a flat week price-wise as steady sales continued to China and forecasts didn’t change too drastically. We started out the week with some prices drops, but a solid midweek bounce helped get back to flat as we head into the weekend. Look for any big forecast changes or unexpected purchases to be the only thing to move bean prices in the near future. As world demand has seen an uptick, the U.S. may find more buyers as South America has been so busy selling up to this point, they may have trouble fulfilling any additional large exports.

 

Large purchases from China gave Wheat a big boost halfway into the week. Wheat did have to give a good chunk of that boost back the following day due to a lack of confirmation on purchases, but any Chinese purchases at this point are beneficial to the markets as other Wheat growing countries are seeing lower yield numbers. As you can see below, markets are well off the lows that we set a few weeks back as Wheat has made a solid rebound. Just like with Soybeans, more confirmed purchases, or any purchases for that matter, would be beneficial to U.S. Wheat.

 

Dow Jones
The Dow saw positive numbers overall for the week with a few days of solid gains and small losses. Americans continue to keep their eyes on places that are reopening and spikes in major metropolitan areas. Retail spending was up +7.5% last month, but some experts think we may see that shrink as some states have rolled back their opening phases where cases have spiked. President Trump wants schools to open this fall as he sees that as a way to get more people back to work, so the rolling out of back-to-school plans be an important factor on the economy heading into election times.