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18 Feb 2022
Agriculture, Corn, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Podcast, Research, Risk Management, Soybeans, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: FEBRUARY 10 – 17

Corn made small gains on the week as grains did well across the board. The forecast for South America can’t seem to make up its mind switching back and forth on rain amounts. Argentina has consistently had rain in the forecasts, but what parts of the country and the amount has been inconsistent. Exports were better this week than last, but nothing crazy; potential conflict in Ukraine and further issues with the South American crop could see those numbers pick up soon. The markets are not open for President Day on Monday the 21st, so there is more time to develop around the world. Based on the Dec ’22 futures for corn after today, the February insurance price is $5.84 ¾.

Via Barchart

Soybeans were up slightly on the week but have been relatively flat (relative to other weeks) the last two weeks, as you can see in the chart below. The continued weather issues in South America and the Russia v Ukraine possible invasion have been the movers for beans just like corn and wheat. Bean exports this week were the best of the group, with a flash old crop sale being announced on Thursday. We have seen private estimates continue to roll in for production in South America and what to expect this year in the US. The USDA Ag Outlook Forum will start next Wednesday, and we should find out what they are expecting for the year ahead and how the US will affect balance sheets. The insurance price for beans is $14.22 ½.

Via Barchart

Wheat has been on a roller coaster the last two months with the ups and downs and uncertainties around Russia and Ukraine. A Russia invasion would be bullish for wheat as countries would shy away from trade with Russia, and Ukraine would stop exports as they try to keep Russia at bay. The Black Sea is a major world trade region. This conflict could lead to potential stoppages, shortages, or even a possible blockade in the region that would cripple a major trade corridor. Keep an eye on this developing story as it could have potential long-term consequences as the US has also threatened Russia with sanctions (they don’t seem to be fazed at all by Washington’s threats).

Via Barchart

Dow Jones

This week, the equity markets fell as confusion and concerns of post-Olympic wars between a few countries inch closer. Russia was reported to have changed their mind on invading Ukraine, only for that news to switch to them adding troops at the border. China invading Taiwan post-Olympics is also a possibility as that has seemed to be forgotten as the Russia news took over the market. Earnings season has been mixed with losers and winners in all sectors as inflation has begun to show up more in guidance for the year ahead.

Via Barchart

Podcast

Tune in as biotech guru Dr. Channa S. Prakash discusses everything from Alabama football, genetics as one of the most extensive agricultural advancements, the most significant risk factors to feeding the world over the next 30-50 years, plus everything in between.

Why producing crop plants with a much gentler footprint on the natural resources will help feed the growing population. How 75% of the world’s patents in agriculture gene editing are coming from China. Understanding that trying to impose restrictions on our ability to grow food can be a considerable risk to agriculture. Listen to hear about these topics and 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].

14 Jan 2022
Corn, Dow Jones, Grain, Market Commentary, Market Updates, Other News, Podcast, Soybeans, USDA Report, Weather, Weekly Prices, Wheat rcmagserv 0 comment

AG MARKET UPDATE: JANUARY 6 – 13

The USDA report was met with a mixed reaction on Wednesday as markets traded both higher and lower immediately following the report. Thursday brought on large selling though, as rain in the dryer parts of South America took the headlines after the USDA Report ultimately did not provide any major changes. The USDA did not change the U.S. yield for corn as it stayed at 177 BPA while raising total crop size to 15.115 billion bushels and 1.540 billion bushels for ending stocks. World stocks were lowered along with smaller yield numbers expected in South America. The rain will do little to alleviate the stress on the crop as more will be needed before we feel better about less yield loss. Several private estimates   believe the Brazil and Argentinian losses are larger than the USDA updated. However, there is still plenty of time before the crop comes out of the ground to rebound.

Via Barchart

Soybeans fell on the week for the same reasons as corn. The USDA Report was slightly more bearish for beans as they raised the U.S. yield 0.2 BPA to 51.4. They slightly increased total production and raised U.S. ending stocks by 10 million bushels to 350 million. A good amount was cut from World-ending stocks due to the issues in South America, but the market had already priced that in, if not more so than was reported. Exports were within expectations, so no surprises there. One wild card still out there is that China is $16 billion behind their Phase 1 trade agreement commitments. Obviously, not all of this is soybeans, but they are far off their soybean numbers. It is unlikely the Biden administration will press them to get to their commitments, but if South America’s troubles are worse than expected, they have to go buy them from somewhere.

Via Barchart

Dow Jones

The Dow fell slightly on the week but bounced back off its lows from Monday. The markets are looking for direction following 4 days of loses straight. With repositioning for the year ahead and profit taking after a historic year the volatility could be around for a while.

Wheat

Wheat has taken it on the chin the last couple of weeks as you can see in the chart below. Wheat sold off following the other markets after the report. The drought in the winter wheat belt is concerning and if it does not improve, we should see prices move higher in the next month or two. The drought is not a big problem right now, but if it continues into February, it would be concerning. This week saw the lowest close in KC Wheat since October.

Via Barchart

Podcast

The 2021 U.S. grain crop has the potential to be one of the largest on record. Where did all the yield come from, what areas were the hardest hit, and why on God’s green earth are grain prices still so high?

Today, we are joined by several RCM Ag Services grain markets experts from around the country to catch up on a post-harvest update and share an outlook for production and marketing in each of their respective regions for the remainder of the 2021 marketing season and the upcoming 22 crops.

 

 

Via Barchart.com

19 Feb 2021
Agriculture, Corn, Dow Jones, Market Commentary, Market Updates, Soybeans, Weekly Prices rcmagserv 0 comment

AG MARKET UPDATES: FEBRUARY 13 – 19

It’s been a slow week for Corn gains as China is celebrating the lunar new year. With the lack of Chinese buying the markets turned elsewhere for news. South America’s weather is still pretty consistent with wet conditions in northern Brazil and southern Brazil and Argentina remaining pretty dry. The next few weeks will be very important for Brazil/Argentina as soybean harvest is already behind pace. The Ag Forum has released the USDA expected planted acreage; Corn was pegged at 92 million acres, which was around most estimates, and not much of a surprise to the markets.

 

Friday’s supply and demand report is going to be the most important piece of news this week as it will be a reminder how tight the world and US supply are. The report, South American weather, and China being back from holiday will be where the focus shifts.

 


Via Barchart.com

 

Like corn, Soybeans gained this week, despite a slow news cycle. Harvest delays continue in South America, to put it in perspective, the harvest is just reaching the halfway point of where they typically are at this point. The January crush report had another record month with bean crush coming in at 184.6 million bushels. The US will runout of beans this summer if this crush rate continues, and after 5 record weeks in a row it does not seem to be slowing down. The Ag Forum came out with an estimated 90 million acres of soybeans for this year which was right around estimates as well.

 

It will be important to keep watching exports as China comes back from their holiday and will begin normal activity again. The news to end the week will be the supply and demand report so how China responds next week will give us an idea how accurate we think the report is.


Via Barchart.com

 

It’s been a strong week for Wheat as it bounced up from the lower end of the range it has been trading in. The cold weather throughout much of the country may have sparked the move this week as the possibility of damage to the crop comes in to play. It will be challenging to get a read on the extent of the damage until the spring making it more of a waiting game instead of a knee jerk reaction. Winterkill rallies are usually short-lived so we will see with this one. The USDA is estimating 45 million acres of wheat this year which is up by less than 1 million from last year. Even though we had a rally this week wheat appears to still be range bound as it has been.


Via Barchart.com

 

Dow Jones
The Dow has had an up and down week as market news has been quiet but the focus of the historic cold in parts of the country has caused energies to surge. The winter storm that ripped through the country has caused issues travelling in many areas slowing down the Covid-19 vaccine distribution and slowing down getting shots in arms as well. Cases have been on the decline the last few weeks and it will be important for this trend to continue.

Insurance
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 2/18 the price for corn is $4.5304 and soybeans are $11.711.

Weekly Prices

Via Barchart.com

12 Feb 2021
Agriculture, Corn, Cotton, Crop Insurance, Dow Jones, Market Commentary, Market Updates, Research, Soybeans, Weekly Prices, Wheat rcmagserv 0 comment

Ag Market Updates: February 6 – 12

Corn lost on the week following dissapointing numbers in the February USDA WASDE Report. Despite the big losses on Tuesday and Wednesday following the report a modest bounce was seen Thursday to give the bulls a little sigh of relief. As we have seen with previous dips there has been buying after the dips that help support the market. The big surprise in the report was US corn ending stocks number being over 100 million bushels higher than trade expectations at 1.502 billion bushels. They did lower them from the January report of 1.552 BBU but not near as much as expected. The world carryout was was also bearish with the USDA raising world carryout to 286.53 million metric tonnes, a raise of 2.7 mmt, and well above trade estimates. The bullish news was that Chinese imoprt expectations increased by 256 million bushels but the US export total was only increased 50 million bushels. With this bearish news funds also began to offload some of their long positions adding fuel to the fire. You should also not expect any news to come out of China as they head into their Lunar New Year so buying from China will be slow. Parts of Argentina that have gotten needed rain may have received more help than expected on their crops as some predict it helped more than anticipated. The positive day on Thursday to stop the bleeding was important for the bulls but how the week ends will be important.


Via Barchart.com

 

Soybeans were lower this week as the bearish news in the report for corn moved triggered a broad based sell off at the Board of Trade. Beans took it on the chin Wednesday as fund selling led the way. Despite a neutral report on the beans side, when funds decide to take profit they are the market mover. New export offers from Brazil were part of drawback as they were 40 cents below the US market and that collapse brought the US to about even. The USDA report showed that the US cannot export any more than about 250 million bushels the rest of the marketing year before bins are empty. CONAB released supportive bean crop estimates on Thursday coming in just above 133 million metric tonnes. The tightness of world stocks is on every traders mind and likely what has caused the markets to jump around – While 100 million additional bushels is only 1% of the 10 billion bushels produced any and all changes to production are being watched. The volatility of the past few weeks is best displayed on the visual daily ranges in the chart below.


Via Barchart.com

 

Cotton once again saw a big week of gains as demand around the world continues. Exports were strong this week with Vietnam, Turkey and China being the biggest buyers. The National Cotton Council’s planted acreage estimates came out this week with the following:

The NCC sees Upland acreage down 4.9% Y-O-Y, at 11.3mm acres. Pima acreage is seen down 20.7%, to 161,000. Overall, this imputes a 5.2% decline to 11.5mm acres. (CottonGrower.com)

With only 4 trading days next week, On-Call sales basis the March contract, will have to be fixed (bought) by the Mills before Friday, ahead of First Notice Day on Monday, Feb 22. The loss of acres was expected with soybeans and corn being very attractive in price vs cotton currently. If cotton can continue its run up it may be able to gain some acres back but this recent run will need to continue. West Texas continues to be extremely dry and will need some moisture heading into the spring.

Via Barchart.com

 

Dow Jones
The Dow gained this week as supportive news from vaccines and the continued drop in Covid cases around the US. As many investors remain bullish looking at 2021 it is important to note that we still have a long way to get out of the storm that has been the last year.

Wheat
Wheat has been in a sideways trade the last few weeks and looks to continue. There was no big news in the report that caused any knee jerk reaction in the market as it followed beans and corn lower on the week.

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 2/11 the price for corn is $4.5141 and soybeans are $11.645.


Via Barchart.com

15 Jan 2021
Agriculture, Corn, Dow Jones, Market Commentary, Market Updates, Soybeans, Wheat rcmagserv 0 comment

Harvest Market Updates: Jan 9 – 15

Corn had a huge boost this week as the USDA reported the US yield to be 172 bu/acre. This was a 3.8 bu/acre decrease from the Nov report that nobody was expecting. The average trade estimate heading into the report was 175.3 bu/acre, so this surprise played a large role in why corn was limit up following the report. This number is low when you think about the past several years of yields and the fact the USDA had estimated the crop to be 181.8 bu/acre in the August report. Now we had some weather events that caused damage to large areas of crops and a drier August, but not to the point that would cause a 9.8 bushel decrease. So, the drastic change over the last few months is a head scratcher, but the USDA does usually leave us with more questions than answers. The USDA also lowered both US and World ending stocks showing why corn has been going up over the past few months, less corn in the world than expected. US ending stocks were lowered from 1.702 billion bushels to 1.552 billion and world ending stocks were lowered from 288.96 billion bushels to 283.83 billion. Tightening ending stocks played a major role in the harvest to now rally in corn and will continue to play a role as all eyes will turn to South America and their corn crop. If their crop begins to struggle or comes out smaller than anticipated this will begin to push new crop ’21 prices up as farmers make their decisions on what to grow in 2021.


Via Barchart

 

Soybeans continue to go higher as March beans topped $14 this week. Like corn, the report was bullish for soybeans. The USDA pegged yield at 50.2 bu/acre after dropping them ½ bu/acre from the December report. They also raised exports and use while cutting ending stocks adding to the bullish news. Soybean’s news the last few months has been bullish as South America oversold their last crop and are now importing US beans on top of the picked-up demand from China. The USDA also lowered the production for South America from 183 million metric tons to 180.6 MMT. With the current South America weather problems (dryness) this number could continue to go down which would keep the weather as one of the bullish factors pushing the market higher. With Chinese demand continuing along with the imports into South America until their harvest, we will continue to see demand support the market. As always with this time of year pay attention to South American production numbers/weather as changes in those will also have major impacts on our markets.

Via Barchart

 

Wheat followed corn up after the report this week as there were no major changes to wheat. The news from the report was that the winter wheat seedings report increased for the first time in 8 years. All wheat acres were 31.991 million acres, up 1.576 million from last year. This was also slightly higher than the trade estimate. The Dec stocks number was not much of a surprise as it came in at 1.674 billion bushels. On the supply and demand side, supply was left unchanged while seed usage was raised slightly by 1 million bushels and feed usage raised by 25 million. This lead to a 26 million bushel reduction in the ending stocks , overall friendly for the market. As you can see in the chart below, despite the Nov dip the March chart is still bullish looking back to the contract lows in June.

Via Barchart

 

Dow Jones
The Dow has remained pretty flat over the last week as impeachment of President Trump hasn’t been a market mover with president elect Biden set to take office in one week. As vaccine rollouts continue to be slower than hoped for, states begin to ramp up their next phase to non-healthcare workers. Governor Cuomo has now come out against another round of lockdowns but we will see what the Biden administration has in store in the next two weeks.

Weekly Prices

Via Barchart

11 Dec 2020
Agriculture, Corn, Cotton, Dow Jones, Market Updates, Soybeans, Weekly Prices, Wheat rcmagserv 0 comment

Ag Markets Update: December 5 – 11

Corn was down a little on the week as there was not much news on either side. The USDA report came with a mixed bag of information as corn had minimal loses after it. The US corn stocks came in 11 MBU above estimates, but world numbers came in 12 MBU below making that news mostly a wash. They did not touch many numbers but did raise Chinese imports or corn by 16.5 mmt. Many experts still see 16.5 mmt on the lower end of imports and will probably end up being higher. Corn does not have quite the bullish news behind it of beans, but a sharp up move in beans will bring corn with it. Continue to keep an eye on exports to China and South American weather.

Via Barchart

The USDA report for soybeans came as a mixed bag of news. The US ending stocks came in higher than expected but still lower than the Nov report (190 MBU in Nov vs 175 MBU Thurs vs 168 mil bu expected). Thursday saw a wide range of trading from 18 higher to 8 lower as you can see in the chart below, and settled down a few cents post report. The main focus will now shift to world demand and South American weather as we head towards the end of 2020. In a La Nina year, drought conditions and warm temperatures can cause issues although recently SA weather has gotten some relief. Any surprise sales will be welcome news as well to push prices higher, but if South America has a production problem that will be the biggest market mover going forward until the January USDA report. Many experts are still bullish bean prices heading into 2021. We stand on our suggestion of not storing beans into the 2021 planting season to take advantage of great prices and potentially look at re-ownership strategies if it fits your risk profile as we look ahead to 2021.

Via Barchart

 

Cotton had a good week boosted on Thursday by the USDA report which provided some bullish news for cotton prices. It lowered production by 1.1 million bales (900,000 bales of which came from a reduction in Texas). Mill use was unchanged, but they raised exports 400,000 bales to 15 million as world consumption and US exports rise. Ending stocks were also 1.5 million bales lower to 5.7 million (or 33% of use). The USDA also lowered world ending stocks by 3.9 million bales expecting lower production and higher consumption. The 2.2 million bale decline in global production comes from the US reduction as well as 1 million bale reduction between India and Pakistan. China is also expected to import more cotton than the previous report. All of these are bullish news for cotton as well as continued drought conditions in west Texas that could cause problems come the spring if the conditions continue for too long. Another bullish factor looking to 2021 crop is with bean and corn prices where they are and cotton prices still trailing we could see acres used for cotton switch to beans or corn in areas where the soil allows. There is still a pandemic raging throughout the world with a second wave in full effect so consumption in the near future may be holding cotton prices back.

Via Barchart

 

Wheat had solid gains this week on Wednesday and Thursday after falling the previous trading days. The USDA report provided some bullish news with smaller supplies, higher exports, and lower ending stocks with no change to the domestic use. The 20/21 global wheat outlook is for larger supplies, increased consumption, higher exports, and reduced stocks. This probably comes on the heels of vaccines rolling out hopefully easing lockdowns as life gets back to normal throughout 2021.

Via Barchart

 

Dow Jones
The Dow has traded up and down over the last week making small gains as the market seems to have priced in the COVID vaccine being rolled out in the next week after FDA approval (hopefully) in the coming days. The approval of the vaccine and Operation Warp Speed going into effect could help support this runup of stocks into the new year, however, if Congress can’t get a stimulus bill together, we could see another pullback. There are still many questions about what a Biden presidency will look like for taxes and regulations coming to Wall Street at the start of 2021 as well.

Water Futures
The CME began trading water futures on Monday as yet another way for farmers to hedge their production if they use irrigation. Water will not require any physical delivery like other futures contracts. This will allow farmers to hedge against water scarcity or shortages that could hurt their crop. Read the entire article here.

Weekly Prices

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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

25 Sep 2020
Agriculture, Corn, Market Commentary, Market Updates, Soybeans, Wheat rcmagserv 0 comment

Ag Market Update: September 19 – 25

Corn was hit hard on the week as grains pulled back from their great run over the last month. As equity markets fell this week with a rise in Covid-19 in European countries, grains followed. Pullbacks this year are normal as harvest gets going. Harvest should get off to a fast start as weather in most areas looks good with no widespread rain, although it does not appear to be enough to delay harvest too much – even as cooler temperatures roll in. The lack of export news on Thursday did not help as this week’s drawback continued, and fell back to levels we saw last week. New sales heading into the weekend will give the bulls some good news, but everyone will be looking to the weekend to see how much progress is made on harvest and the yields we see. The Dec ’20 chart is below.

via Barchart.com

 

Just like corn, soybeans fell this week as a pullback on the grains hit them hard. Like mentioned above for corn, beans face pressure as harvest begins and the great weather outlook for it. The lack of any sales Thursday put more pressure on the markets, and beans felt the full weight of it as they will need continuous bullish news to keep them high after such an impressive run in the last month. Friday will be important as the bulls need purchases to continue and the bears are looking for large numbers to come out of harvest over the weekend and lower sales. China also believes they will be able to have another crop in some areas not flooded, so they may look to continue restocking their reserves with a mix of Chinese grains and imports. The Nov ’20 chart is below.

via Barchart.com

 

Wheat followed the lead of corn and beans this week as it sunk lower after solid gains the past month. It is still in the same area as it was trading last week so it has not seen near the pulldown that other grains have. Keep an eye on the Black Sea area for any surprises that could give them a boost or further reason to fall as export news seem tired on the market.

 

Dow Jones
The Dow fell on the week as a market-wide pullback/correction hit hard along with Europe beginning to face Covid-19 struggles again. The tech pullback continues after its incredibly strong run since the market collapse this spring. As we know with any election year, and maybe this one the most, expect volatility in the market along with the 2020 volatility we have seen. The chart below shows the daily volatility/ranges we have seen along with the drawbacks.

via Barchart.com

17 Jul 2020
Agriculture, Corn, Dow Jones, Other News, Soybeans, Wheat rcmagserv 0 comment

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.

10 Jul 2020
Agriculture, Corn, Dow Jones, Lumber, Market Updates, Soybeans, Wheat rcmagserv 0 comment

Ag Markets Update: July 4 – 10


Corn had a choppy week only to end $0.09 lower after last week’s shockingly bullish USDA report. The main price mover this week was the uncertainty in the weather outlook. The weather post July 15th has been in limbo of hot and dry or cooler with some rain. Hot and dry would hurt the crop for the long run lowering yield, which is when we saw the prices rise on certain days. The post July 15th to August 1st period is very important to keep an eye on moving forward as the weather will be the key mover and the August 10th USDA report is worth keeping an eye on. The eastern corn belt looks to have extreme heat and dryness over the next week after a round of rain earlier this week…but let’s be honest, the weather man is only right 10% of the time = changes to the forecast are expected and prices will react.

“Supply side for corn ad beans adjusted due to the changes in planted area, so nothing too exciting there. But corn demand got cut quite a bit. Even so, the ending stocks are below trade expectations,” Scoville says (agriculture.com)

 


Soybeans had a similar week to corn with some up and down price movement after the rally last week. The hotter and drier outlook in parts of the Midwest will have an adverse effect on the crop like it will for corn. The lack of sales to China is are still holding back the market as Phase 1 continues to trail behind trade goals. Like corn, keep an eye on weather moving forward but as mentioned before. And big purchases from China would be a promising sign, but it doesn’t seem like that’s bound to happen any time soon:

Meanwhile, trade relations between the U.S. and China remain relatively frosty. President Donald Trump noted earlier today that relations are “severely damaged” after each has accused the other of mishandling the coronavirus pandemic. Trump indicated a planned phase-two trade agreement is still on the table but is not a priority right now. (farmprogress.com)

 


Wheat got a boost this week (+$0.42) as Russia and Europe’s wheat crops look to come in well below pre-harvest estimates. Low harvest numbers from the rest of the world is bullish for U.S. wheat prices as our growing season continues. This boost is very welcome following the last few months of declining prices. The markets will keep an eye on Russia and Europe as they progress through harvest.

 

Via Barchart


Dow Jones
The Dow continues to move on any news related to COVID-19. A lot of uncertainty hangs over the U.S. and the markets as spikes in cases continues around the country. An important thing to keep an eye on for the markets will be what schools decide to do in the fall, as going back to school is being used as a tool to also try and continue to reopen the economy.

Lumber
September lumber futures reached a multi-year high this week and are now up +82% from their April multi-year low. The best way to sum up the market place is by watching it print. It was up $48 – $498 since Wednesday. There isn’t enough wood to supply the needs, and mills are raising prices at will. It is a market squeeze that only ends once the pipeline is filling or prices shut down purchase order books.

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