RCM Ag Services

Tag: USDA report

17 Sep 2021
Agriculture, Corn, Grain, Market Commentary, Market Updates, Research, Risk Management, Soybeans, USDA Report rcmagserv 0 comment

AG MARKET UPDATE: SEPTEMBER 2 – 16

Corn was struggling heading into the USDA report last week but has seen a good 30+ cent bounce from the sub $5.00 lows. The USDA raised their expected yield for corn to 176.3 bu/acre and added 600,000 acres. They also raised the ending stocks with higher yield for what some would consider a bearish report, but the reaction was neutral to bullish following it. As harvest gets going, yield estimates cover a wide range, but it appears that a mid 170s is more and more likely. With no significant weather concerns in the coming weeks, harvest should get off to a fast start. As strong as prices currently are, it is always essential to have a marketing strategy to avoid missing out on other opportunities. As you debate how much to store in the bins or go ahead and sell, make sure it is what makes the most sense for your farm. If you want to sell now to get the cash, consider what can be done on paper to not miss out in case of higher prices in the future. As harvest gets rolling expect yield updates to change as well while the markets keep an eye on them.

Via Barchart

Soybeans have had a similar reaction the past couple of weeks as corn. The USDA slightly raised their bean yield to 50.6 bu/acre from 50 and lowered harvested acres by 300,000. China continues to show up in the export report which is both needed and welcome to see after this summer’s lack.. As the ports in New Orleans and the other grain terminals along the Mississippi River reopen following the hurricane, export disruption worry has slowed. Harvest (like corn) should get off to a great start in the coming weeks, and it is crucial to have your marketing plan ready and execute it. Keep an eye on yield reports as they come out in the weeks ahead and the cash market as it will help give an idea of how much people are willing to sell now or store.

Via Barchart

Dow Jones

The Dow has struggled so far in September like the other indexes. This is not uncommon to see this time of the year but does give investors heartburn when you see back-to-back weeks of struggles.

Wheat

The insurance price was set for the red wheat varieties yesterday at $7.16 and $7.08, a multi-year high.  High prices cure high prices so expect corn to lose acres in the Wheat Belt as the guarantees will motivate additional wheat acres.

Podcast

Check out our recent podcast where 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 agriculture markets. They discuss the real-world application of short-dated options to fight the recent blaze of volatility surrounding agriculture markets potentially. https://rcmagservices.com/the-hedged-edge/

 

US Drought Monitor

The maps below show the US drought monitor and the comparison to it from a week ago. The dryness will allow harvest to start on time.

 

Via Barchart.com

 

 

13 Aug 2021
Corn, Grain, Market Commentary, Market Updates, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: AUGUST 5 – 12

Corn saw large gains following the USDA report on Thursday before finishing the day well off the highs. The USDA cut expected yield to 174.60 bu/acre from 179.5 in the July report. The USDA also lowered Brazil’s crop yield by 6 million tons to 87 million and some estimates believe it will still be lower than that. The combination of these two yield cuts cut the world ending stocks for the 21/22 year by over 6.5 million tons which shows a slightly lower demand as well.

The report this year cut yield expectations much earlier than in the past which is what surprised the market as we usually get adjustments after the fact. Brazil will probably see another cut in their production down the road where the USDA left the possibility of raising the US production in the future by making such a drastic cut. The drought monitor at the bottom shows current conditions and although it is slightly improved from last week but as you have seen the plains have had a brutal stretch.

Via Barchart                       

Soybeans had more of a mixed report but still gained following the report while finishing well off their highs. The USDA pegged the bean crop at 50 bushel per acre but cut demand by raising world ending stocks. As the demand from China has slowed from the torrid pace to start the year that fueled the run up in price the demand has been quiet recently. With improving weather conditions coming down the stretch the US bean crop is in good shape with the possibility to improve. The world supply is snug but not critically tight so there is more wiggle room for beans than corn currently.

Via Barchart

Dow Jones

The Dow gained on the week as strong earnings continue to come through with the normal names leading the way. The Biden administration’s Infrastructure plan will become more a story as more exact details come out but will provide areas of growth.

Podcast

Check out our recent podcast where 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.

https://rcmagservices.com/the-hedged-edge/

US Drought Monitor

The maps below show the continued drought conditions in the northern Midwest that reaches into the Canadian planes while it has also improved since last week.

 

Via Barchart.com

16 Jul 2021
Corn, Grain, Market Commentary, Market Updates, Other News, Soybeans, USDA Report, Weather, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATE: JULY 8 – 15

Corn rallied this week following Monday’s USDA report that was relatively neutral. The USDA left expected US yield the same while slightly lowering the 20/21 ending stocks and raising the 2021 production. The USDA did lower Brazil’s corn production numbers, but some estimates still think they are overstating what it will be. The USDA dropped Brazil’s corn production from 98.5 million tons to 93 million, while only raising Argentina’s 1.5 million. The drought conditions persist in the upper Midwest as some areas are expected to get rain over the weekend. The drought in the Canadian prairies and Dakotas does not have any major relief in the forecast as heat and dryness remains in the next weeks forecast. Exports this week were small but not surprising. Weather continues to be the main driver as markets will react to where it rained and how much over the weekend to start next week. Currently about 36% of the US corn production is in an area experiencing drought. As you can see in the drought monitor below northern Iowa and southern Minnesota is a good amount of that.

Via Barchart                          

Soybeans gained on the week as well following the USDA report. There was no adjustment to expected yield and only slight adjustments higher to ending stocks. Beans kept up their momentum following the report for the week before cooling off Thursday. It will be important how they end the week and open Sunday to set the tone for next week. Weather continues to be the main market mover as it will be important heading into the end of July and August. About 31% of the soybean production is in an area currently experiencing drought so any and all rain will be welcome for the crop but the price will be impacted as well.

Via Barchart

Dow Jones

The Dow gained on the week despite growing inflation concerns and Powell’s comments about Fed strategy. The Biden administration’s child tax credit has arrived as well with it going into effect this week. The Delta variant continues to spread around the US with some places beginning to bring back mask requirements.

Podcast

Check out our recent podcast with Dr. Greg Willoughby: We’re talking with Greg in the new episode about being a “plant doctor”, weather patterns, GMO & organic produce, crop history, technical advances, level 201 education on agronomy, the agronomy equation, Helena Agri, soil biology, American v European agriculture, Greg’s early background in livestock, and the advancement of native plants to modern produce.

https://rcmagservices.com/the-hedged-edge/

US Drought Monitor

The maps below show the current drought conditions in the US. The second map is last week’s so you can see how the areas that received rain improved or did not.

Via Barchart.com

 

 

02 Jul 2021
Agriculture, Corn, Grain, Market Updates, Other News, Soybeans, USDA Report, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: JUNE 18 – JULY 1

The USDA Acreage report was released this week and was bullish for corn. Planted acres came in @ 92.70 million acres, which was below the average estimate of 93.787 million. June 1st stocks were also slightly lower than estimates coming in at 4.112 billion bushels. For the second year in a row the USDA came out with less planted acres than pre-report estimates. There was also a note at the start of the report saying there are still 2.18 million acres intended to be planted during the survey time of May 29-June 17. This means that the 92.70 million number may end up being lower as odds are not all the 2.18 million acres got planted. This combined with the lower stocks gave corn a big boost as Dec’ 21 futures went limit up post report.

This is the last major market moving report (historically) of the summer, which means we are now in a weather market for the time being. The upper Midwest is still very dry and needs relief as you can see in the drought monitor chart at the bottom.

Via Barchart                       

Soybeans, like corn, saw big gains following the release of the acreage report. Planted acres came in at 87.6 million acres, below the average estimate of 88.955 million. The June 1st stocks were also lower than estimates coming in at 767 million bushels, 20 million lower than the average estimate. Beans had a similar post report reaction to corn because the bullishness of the numbers were similar. With acres and stocks both being smaller than anticipated this will put pressure on the crop and weather during August will be very important for not only the crop but also the price.

Via Barchart

Wheat had a neutral report but followed corn and soybeans higher after. Wheat looks to be forming a bottom on the charts but July weather is still critical for the plains/Canadian wheat crop. Wheat struggled lower on Thursday as they had their own trade and did not follow the lead of corn and soybeans. Weather this month will be important for the crop as we are also in a weather market for wheat too.

Via Barchart

Dow Jones

The Dow gained on the week as all major indexes had a good week as trade continues to be getting back to normal following the covid lockdown of the last year. The Dow closed out the month strong after seeing major weakness the first half of June.

Lumber

Lumber prices have continued their slide down and are back in the 700s after trading into the mid 1700s in early May. The pressure on the market looks to continue as the downturn has been sharp.

Podcast

Check out our recent podcast with Dr. Greg Willoughby: We’re talking with Greg in the new episode about being a “plant doctor”, weather patterns, GMO & organic produce, crop history, technical advances, level 201 education on agronomy, the agronomy equation, Helena Agri, soil biology, American v European agriculture, Greg’s early background in livestock, and the advancement of native plants to modern produce.

https://rcmagservices.com/the-hedged-edge/

US Drought Monitor

The map below shows current drought conditions and the continued problems in the upper Midwest and continued sever drought in the western US.

  

Via Barchart.com

 

 

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

05 Feb 2021
Agriculture, Corn, Cotton, Dow Jones, Soybeans, USDA Report, Weekly Prices rcmagserv 0 comment

Ag Market Updates January 30 – February 5


Corn gained on the week as South America has had issues with their first harvest and the continued wet conditions delaying it in north and central Brazil. Huge exports this week to China and other strong ones to accompany it were very welcome to see. A total of 293 million bushels, a weekly record, was the good news the bulls needed. It is easy to get in a lull where you expect these exports at this point with the past few months of demand but whenever they come in above or at the high end of expectations it is what is needed to keep the momentum. Funds continue to be long close to 2 billion bushels, so like beans the daily volatility may stick around. Continued exports and continued delay of Brazil’s harvest will be the bullish news under the market going into the USDA report on Tuesday that could throw some surprises at us – there is one thing we know for sure it is the USDA is full of surprises (both good and bad).


Via Barchart

 


Soybeans rebounded this week as the markets were not as volatile as the previous couple of weeks. South America got some welcome rain in parts of Argentina and looks to remain hot and dry for the near future. The wetness in Brazil delaying their first corn harvest does not have much of an impact on soybeans, but as we know any big news for one of them will still have a ripple effect. Funds continue to be long as they entered the week long 820 MBU. As mentioned last week when funds decide to take profits, we may see price volatility in stretches. Good exports this week continued as we see consistent demand from China. As beans have been range bound the last 2 weeks relative to the past few months there has been end user buying dips below $13.50 to provide some support.


Via Barchart

 


Cotton got a strong bounce on Thursday after trading relatively flat for the week. This week’s exports were strong with cotton going to 18 destinations. Overseas mills demand has stayed consistent and will continue to be the driving force behind cotton. With all the cotton that has been sold it is not hard to imagine that there will be a supply squeeze here in the US that will continue to drive prices higher as well. The supply squeeze will come as demand remains high; however, at some point we will begin to run out of cotton to export if current pace keeps up. Outside political pressure on China and their accused human rights abuses continue to cause them troubles exporting cotton which has helped the US. As great as cotton’s run has been it still is well below where it needs to be to be competitive with grains. For this reason, cotton acres are expected to fall over 500,000 acres to 11.5MA which would be supportive for new crop cotton as we head into the spring, but will we get a rally before then to keep those acres? The demand is there so it may be a last-minute decision for some farmers.


Via Barchart

 


Dow Jones
The Dow gained this week and traded to new contract highs as market volatility has slowed down following the short squeeze drama of the last week. Covid-19 cases in the US have been trending lower for new daily cases along with vaccines continuing to roll are both great news. It is also earnings season so there has been lots of news both supportive and negative for many companies as any positive COVID-19 news seems to be the biggest overall market mover.

Insurance
Remember that this month is important for revenue-based insurance averages so it will be important to keep an eye on the markets even if you do not plan on making any sales. As of the close on 2/4 the price for corn is $4.4937 and soybeans are $11.5525.

February USDA Report
Reminder to keep an eye on the USDA report on Tuesday the 9th. This report historically has not contained as many surprises but with the recent Chinese demand we may see another update of the expected ending stocks and exports. We are expecting Tuesday’s report to be a market mover.

Weekly Prices


Via Barchart.com

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

21 Jan 2021
Agriculture, Corn, Cotton, Livestock, Market Commentary, Market Updates, Meats, Podcast, Research, Soybeans, USDA Report rcmagserv 0 comment

Ag Markets Update: January USDA Report

In this monthly segment on The Hedged Edge, RCM Ag Services pros Jody Lawrence, Ron Lawson, Kevin Bost, and host Jeff Eizenberg come together to provide expert knowledge on important markets including cotton, meat, and grains following the USDA Report. Watch the whole episode below!

 

If you’d rather listen – click on the links below to find your preferred platform:

23 Dec 2020
Agriculture, Corn, Market Commentary, Market Updates, Podcast rcmagserv 0 comment

Acing Agriculture with Dr. Scott Irwin

For the commodity world, 2020 has been particularly interesting. Between stimulus packages and China buying pullback, to ramping up production and setting up for a potential big comeback in 2021 it feels like we’ve been living through a game of ping pong. So to review it all – plus give some insight into 2021 – we’ve brought Dr. Scott Irwin on to go through it all. Dr. Scott Irwin is chair of the Agricultural Marketing in the Department of Agriculture and Consumer Economics at University of Illinois Champaign-Urbana. Scott is a national and international leader in the field of agricultural economics. His research on agricultural markets is widely-cited by other academic researchers and is in high demand among market participants, policymakers, and the media. In today’s episode, we’re talking about 2021 and beyond, game changers in the ag market, Chinese demand, the USDA report, University of Illinois program, and FarmDoc.

 

 

Follow along with Scott on Twitter and LinkedIn and check out FarmDoc.

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

02 Jul 2020
Agriculture, Corn, Cotton, Market Commentary, Market Updates, Other News, Soybeans, Wheat rcmagserv 0 comment

Ag Markets Update: June 27 – July 2

Corn finally got some positive news in the USDA report this week with planted acres coming in well below the March estimate and below the trade estimate. Planted acres came in 92.006 million which is about 5 million acres less than the estimate in March of 96.990 million. One thing of note from the USDA NASS Farm Labor survey that took place between May 30 and June 16, is that there was still 2.24 million acres of corn to be planted of the 92.006 million. This means that the acreage could still be lower if the entirety of that 2.24 million gets planted.  Even with the bullish acres news there was still some bearish news in the report when it came to the quarterly grain stocks report. Something that is also important to keep in mind that just because 92 million acres are planted does not mean there will be that many harvested. Even with a solid trend line yield north of 178, these acreage numbers should help. As always, keep an eye on exports and weather as the fundamental market movers in the short term.

Quickly touching on the weather outlook, there looks to be heat and dryness for the next couple of weeks in many areas. This will put some stress on the crop and this kind of forecast along with the USDA numbers from this week are the 2 catalyst moving corn higher.

Dec ’20 Chart

Via Barchart

Soybeans prices, like corn, saw a big bump from the NASS report, even though there wasn’t as much obvious bullish news from the acreage report. The acres did not change much from the March estimate of 83.510 million to 83.825 million acres. The trade estimate had it higher, trading at 84.716 million, which allowed for prices to jump up along with corn. Many people think that the acres are higher as a possible landing spot for those 5 million acres of corn that disappeared. Do not be surprised if we see more acres down the road. Soybeans in the long run still need as many exports to China as we can get going forward. The trend line yield of 50 bushels per acre is still in play with the start we have had but like mentioned above for corn the heat and dryness in the upcoming weeks could impact yield.

From speaking to farmers, it seems many farmers who planted in April and got washed out switched their acres from corn to soybeans. We are not sure how widespread this, is but don’t be surprised if soybean acres is higher when all is said and done.

Nov ’20 Chart

Via Barchart

Wheat got a boost out of the report just like corn and soybeans. Wheat’s gains came mostly as a result of following corn and beans higher as the report was not as bullish for wheat. Wheat acres were down 400,000 from the March estimates. It was welcome for wheat prices as they have been on a losing streak the last month as we look towards July for some help. If corn and soybeans continue to find support and prices go up look for wheat to be a benefactor of that as well.

Sep ’20 Chart

Via Barchart


The report was bullish for cotton as well as we have seen a rally because of it. Planted acres were down over 1.5 million acres from 13.703 million to 12.185 million acres. This is also down 11 percent from 2019. Cotton prices got a boost when these numbers came out as many acres were not planted due to a wet spring or prices being too low. Knowing the acreage number now moving forward weather in the major cotton areas will be important to keep an eye on. A tropical storm or drought, depending where, could cause cotton to jump like it has from this report.

Dec ’20 Chart

Via Barchart

Miscellaneous
Planted Acreage for principle crops dropped 7.2 million acres from the March report, 5 million of which came from corn. The big question is where did these acres go? We may see a lot go to prevent plant as only 3 million acres are estimated for PP but it is possible that a lot of acres were not planted because of depressed prices as a result of loses from the trade war the past couple years and the disruptions from COVID-19 pandemic all could be factors. Click here for the acreage report.

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.