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06/07/24 Afternoon CommStock Report -June Crop Report Should be Bullish

By The Commstock Report
Next week's crop report should reel in lofty expectations about new-crop production potential while it should also feature upward revisions for old-crop corn demand, as well as cuts for South American soybean production, and cuts for wheat supply in Europe and around the Black Sea.   The biggest wildcard on the June crop report is the U.S. corn yield estimate. While very rare for the USDA to tweak the "weather-adjusted trend" yield in June, it is not without historical precedence. It was because of delayed plantings that the June corn yield estimate was lowered in 2019, in that case by a whopping 10 bushels per acre. The USDA had previously included text in the June crop report explaining how its trend yield estimate was based on the assumption of "normal mid-May planting progress." Planting was delayed in mid-May this year, but not to the extent of 2019. Corn plantings were only 49 percent complete by May 19, 2019, while they were 70 percent planted by the same date this year. Still, plantings were slower than average for most of the month and the trend yield model should produce an adjustment lower to reflect the likely yield penalties for what was…
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06/06/24 Afternoon CommStock Report – Nursing Home Affordability Crisis

By The Commstock Report
I think it was Benjamin Franklin that said "Nothing is certain in life except death and taxes."  I could write and have written many reports on tax implications for farmers, but I don't know that I have written much on the topic of death.  And this isn't really about death, but rather on the potential need for long term care in a nursing home which more and more becomes less a place to rehabilitate and more and more, a place for acute care needs and a final home before we pass away.   My wife is on the board of an area senior living complex, so she occasionally brings me up to speed on costs, regulations and such that are impacting the business of providing good long term care for those in need when they are at their most vulnerable.   President Biden is proposing a plan to set minimum staffing levels for nursing homes. Under the proposal, nursing homes must provide 2.45 hours (2 hours and 27 minutes) per resident day of care from nurse aides, exceeding standards in all states. This means a nursing home would need roughly ten nurse aides per each 8-hour shift in a facility with 100…
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06/05/24 When (not if) China Stops Buying US Soybeans

By The Commstock Report
Brazil's second crop corn harvest continues to advance as the dry season is well established at this point.  It won't begin raining in Northern growing areas until sometime in September.  Mato Grosso was at 5% complete last Friday and so could be as much as 10% complete this weekend.  Corn crop conditions on our farm in Minas Gerais started out positive.  The crop was looking great through most of April, but as is often the case, the crop could have used an extended rainy season through late April and/or May.  That didn't happen.  The crop cycle shut down prematurely and yield potential will be severely impaired.  Our rainy season is a bit shorter and so this is somewhat expected.  It is worth trying some area each year, but our second crop corn area is limited to less than 20% of our soybean area.  Some producers opt for sorghum or some other small grain that has a shorter season or requires less moisture.  It might have less profit potential but also reduces your financial risk.   Brazilian farmers are now focusing on US weather to give them a potential rally.  While the US planting season has been setting rainfall records in…
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06/04/24 Pre-Emptive Tariffs on Chinese EVs Will Not Fix EV Mandate

By The Commstock Report
Trump, when President, imposed tariffs on $300 bln of Chinese products, roughly two-thirds of Chinese imports. Biden left them in place and just recently added tariffs under section 301 of a 1974 trade law on the sectors and products listed (chart below). Biden's tariffs are more strategic than blanketed. He uses a rifle while his predecessor uses a double-barreled shotgun.   Biden tariffs are more symbolic, currently amounting to another $18 bln, based on 2023 imports, but are different from the tariffs imposed by Trump as they are pre-emptive. China currently imports just $400 mln in vehicles to the US but has the excess production capacity to export far more. China has the production capacity to produce 40 mln autos but sells just 30 mln domestically. That means that there is capacity to boost auto exports by as much as 10 mln. Tesla's Elon Musk, who should know from his experience in China, says that there is a flood of cheap government subsidized Chinese EVs coming if trade measures are not taken preemptively. Biden wants to make sure that they do not come here. Europe will likely do the same so that it is developing nations where these cheap Chinese…
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06/03/24 CommStock Radio Report Being Refreshed into the Digital CommStock Channel With New Host Marlin Bohling

By The Commstock Report
In 1985, when I conversed with the owner of the inaugural radio station that first aired the CommStock Report years ago, I asked him how long such programs last. He seemed surprised by the question saying that if refreshed they would not wear out and could last a long time. When I first recorded the CommStock Report we used 8-track tape technology which certainly dates me. Then, we sent each recorded program to each station individually, which often took me several hours each afternoon. If I coughed, for example, I had to start all over. There was such a thing as digital editing. This technology dramatically improved, changing over the years and the format of the program did too.   In January of this year CommStock Investments inaugurated another significant change, creating our own digital network called the CommStock Channel. We produce a podcast each day aired with the daily digital CommStock Report. It is also posted on YouTube and social media platforms. Marlin Bohling, coming to us from RFD TV, is the director of the CommStock Channel with Breann Hendrickson as his producer. We have had an excellent initiation of the channel with contributions from our brokers, agents, guests…
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05/29/24 41% of Brazil’s Safrinha Crop Planted in High Risk Period

By The Commstock Report
Brazil's second crop corn harvest slowly advances while weather forecast finally shows a much-needed drying pattern in RGDS. Harvest in Mato Grosso, Mato Grosso do Sul, Goiás and Parana only register at around 2% overall. Progress will begin to pick up quickly in the month of June. Three different private groups came out with their Brazil corn crop estimates last week ranging between 114.3 MMT on the low end, followed by 117.1 MMT and 121 MMT on the high end. All three came in above CONAB (111.1 MMT) but below USDA (122 MT). CONAB may be forced to increase their estimate due to favorable weather in Mato Grosso, but we still see the USDA estimate as too high. The USDA has yet to take into consideration the flood damage in RGDS as well as the earlier end to the rainy season.   As much as 41% of the safrinha corn was planted in a period we deem as high risk. We define high risk as being anything planted after February 20th. That is not to say that the corn cannot still perform well if planted past that date, but the rainy season becomes increasingly unreliable beyond that point, and farmers…
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05/28/24 Once in a Lifetime 2024 Planting Stories Here

By The Commstock Report
Cropping conditions were starting to feel similar to 1993 here. That year my neighbor across the road planted corn extremely early in April before conditions were fit. It made no sense to me why he would plant that early mudding the crop in. I got my fertilizer and chemical on to plant corn and then it rained and rained and I ended up participating in the 0-92 program that year where we destroyed the crop for a payment. The neighbor's corn made 150 bpa which was the best in the county. Mine was about half of half of that. By it staying wet he avoided sidewall compaction and crusting. Some corn got planted here in April this year. At the time conditions were good. However, it has rained and rained since resulting in ponding, uneven emergence and N loss that will take the top end off of the yield. I am still not ready to give up on an APH yield from the early planted corn yet but unrelenting rain may change that. There were a couple days planters got into the field again here in mid-May. This time they mudded through. It will need to stay wet for this…
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05/24/24 War and Conflict Remain Sources of Heightened Market Volatility

By The Commstock Report
It is being reported that Russian President Vladimir Putin is suggesting that a ceasefire could be reached in Ukraine if an agreement would allow Russia to keep the territories currently controlled by Russian forces, which are estimated to span nearly 18 percent of Ukraine. Most observers believe that the demand is an impossible ask and that there will be no push toward actual negotiations. The news may be viewed by some as a sign that Putin's desire to continue the war is softening; however, others recognize that the unrealistic claim for victory is probably a ploy to excuse further advancement of Russia's land grab. Also in the news this week was Russia's removal of border markers that were in place outside of Estonia, which was another step up of recent threats by Russia to expand its borders into the Baltic states while also provoking Finland.   Even with the latest escalations of the war in Ukraine, including talk about Russia resuming the targeting of grain assets in the Black Sea, Ukraine just had its biggest month for grain exports since the invasion occurred more than two years ago. After Russia's suspension of the trade deal with Ukraine in July 2023,…
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05/24/24 Markets Firm on Reduced Global Crop Estimates for ’24 from IGC

By The Commstock Report
FIRST '25 CROP WHEAT RECCO DAY 2:Past advice has you sold out of '23 wheat and 35% hedged on '24 production. Yesterday we advised hedging the first 15% of expected 2025 production in July '25 contracts at your appropriate exchange. They've rallied 140-170 per bu. from March lows and that needed to be rewarded. (For track record we're using fill prices for Chicago and KC at 743; MGE at 769.)   On the Grains This is Memorial Day weekend so there won't be any markets on Monday. A hearty salute to all veterans and families of veterans who made the ultimate sacrifice in service to our country for generations past.   In overnight trade thus far prices are mostly firm. With anticipated cuts in corn production in Argentina and sub-Saharan Africa and smaller wheat crops expected in Russia, Ukraine and the United States, the International Grains Council (IGC) revised its monthly projection for total grains output lower by 10 million tonnes for the 2024-25 marketing year. Here's the breakout by crop: Global wheat production is lowered to 795 MMT, still 7.3 MMT higher than last year but 3.2 MMT lower than USDA's forecast at 798.2. A slight decline in corn…
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05/23/24 No Longer as Tightly Shoulder to Shoulder

By The Commstock Report
The promise by President Biden of standing “shoulder to shoulder” with Israel proved to be one of the casualties of the Israel/Hamas war. It succumbed to the success of the Hamas/Palestinian public propaganda strategy. Gaza was a Palestinian state that was controlled by Hamas. Hamas is a terrorist organization dedicated to the destruction and elimination of Israel, transparently described by Hamas as capturing the territory “from the river to the sea” as its objective. Gaza was transformed by Hamas into an underground military complex, completed as a protected missile launch pad capable of reigning missiles down on Israel defended by its ‘iron dome’. Late last year Hamas launched a military offensive against Israel. On October 7th, 2023 highly trained Hamas assault troops successfully executed a surprise attack on Israeli settlements outside Gaza raping, pillaging and killing over 1200 Israeli citizens while taking many others hostage in their retreat to their underground fortress in Gaza. Understanding why Israel is so devastated, in US population equivalency that would be the same as 42000 murders/deaths. Hamas correctly anticipated that Israel would have no choice but to invade Gaza and were well prepared for the anticipated assault to make it as bloody as possible.…
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