Skip to main content

06/25/2024 Slippage in Crop Ratings Helps Offset Lofty Expectations for Friday’s Stocks and Planted Acreage Reports

By The Commstock Report
On the Grains Overnight grain trade is steady to weak. Export sales were within the range of expectations. The most noteworthy element in the holiday delayed Commitments of Traders report issued yesterday was that for the first time in 5 weeks funds started reducing their net short position in corn but continued adding aggressively to their net short position in beans. Trade estimates are out for Friday's Quarterly Grain Stocks and the Acreage Report showing what actually got planted vs. March intentions. June 1 Grain Stocks are expected significantly higher, even at the lower end of the ranges of estimates. As for planted acreage, the best spin we can put on expectations is that markets have already dialed in bearish numbers. No switch from corn to beans is expected. Instead, expectations for BOTH crops are higher than March, by more than 300,000 acres in corn and by more than 240,000 acres in beans. Reasonably steady markets overnight despite those numbers likely comes from slippage in crop ratings we got after the close. Looking at corn first, the portion rated good to excellent dropped three points to 69%, just meeting expectations. However, 7% rated poor to very poor and that was…
Read More

06/24/24 Afternoon CommStock Report – Are 2024 Floods Rhyming With 1993 or the Other Way Around?

By The Commstock Report
1993 is fixed in my memory as being the worst crop that I have ever struggled to produce in my 51 years of attempts at growing crops. It was close to being our year without a summer with record deluges, a shortage of DDGs and limited sunshine. Crops went in late in mud and never developed normally. Corn on corn was literally toxic, air was purged from waterlogged compacted soils. An additional equivalent of another Great Lake developed west of Lake Michigan. There were 9 million prevent-plant acres in 1993. I remember 1993 as being cold and dark. Heat units failed to accumulate as clouds blocked the sun. Nitrogen was lost. Corn never really matured with light test weights negatively impacting grain quality. It was a crop disaster. The irony of all of this is that they watched it unfold at the CBOT and the market refused to acknowledge the sorry state of crop conditions for months after farmers recognized what was occurring. This caused farmers to doubt their own eyes. Market pundits would take windshield tours from Chicago and report that while low ground was flooded the high ground would produce well. The truth was that there was no…
Read More

06/24/2024 Weekend Flooding in Upper Midwest (and More on the Way) While Hot Temps a Worry in the South

By The Commstock Report
On the Grains Grains are steady to firm in overnight trade with beans firmest. We've not yet seen the wire service roundup of pre-release trade estimates for Friday's Acreage Report but expect them to show most expecting a slight shift from corn to beans since March Planting Intentions. The more immediate news is weekend weather where heavy weekend rains have led to flooding and more super-saturated fields across much of SE South Dakota, southern Minnesota and Northwest Iowa. This area has experienced from 6 to 15 inches of rain in the past 10 days! The 3-5 day outlook shows a bit of respite, but then the 6-10 day outlook shows yet another huge front bringing abundant rainfall to the northern half of the Corn Belt and the Lake states where it could well do more harm than good. Meanwhile, the hotter than normal temps persist across most of the country in both the 3-5 day and 6-10 outlook. As we noted last week, the hot temps are particularly worrisome in the Delta and Southern States where corn has already entered the temperature-sensitive silking and pollination stage. This morning we'll get weekly export inspections and this afternoon we'll get the holiday-delayed Commitments of…
Read More

06/23/2024 Sunday Market Preview

By The Commstock Report
Grains look to open steady to slightly higher. Traders look for guidance from the Crop Progress report and trader positions data coming on Monday afternoon before waiting on the Friday Stocks and Acreage reports. In the Headlines July corn futures gave up 15 cents last week. July beans were lower by 19 1/4. July Chicago wheat futures were down for a fourth straight week after losing 51 1/4 cents over the four sessions last week. July KC wheat futures were down 46 1/4. June live cattle finished closed the week higher by 77 cents while August feeders were down $3.60. July lean hogs finished weaker by $1.60. The futures spreads should remain active this week as repositioning occurs following last Friday's expiration of July options and before this Friday's first notice day for July futures. Basis has been strengthening again for corn and soybeans. Lower futures prices pair with firmer ethanol and soy product prices to boost processing margins while those same lower board prices keep the farmer reluctant to let go of remaining old-crop inventories. The national average corn basis has climbed back toward its highest level of the year at 26 cents under futures and the soybean basis…
Read More

06/21/24 Afternoon CommStock Report – Brazilian Beef…It’s What’s For Dinner

By The Commstock Report
Rarely does the NY Times produce an article that seems supportive of the cattle industry, but they were smart enough to point out the high level of control meatpackers have on our food distribution system.  They highlighted recently how Montana has more cows than people, yet the locals there unknowingly consume beef sourced from Brazil or other regions.  Companies like Tyson and JBS hold such a dominant position in determining what beef is available at the grocery store, often supplied from other countries, that it forces competitors to become vertically integrated if they are ever going to compete.   This is not an easy task as it requires tremendous amount of capital not to mention a dedicated management team.  The Biden administration has offered $1 billion for those willing to start an independent meat processor, but you could burn through that check quickly.  It is not enough to have your own meatpacking facility if you can't get it in front of consumers.  As packers carry heavy influence with large grocery chains, they can determine how much shelf space to offer for new competitors – which is to say none.  The only way around this is to go direct to consumer…
Read More

06/21/2024 New 3-Month Weather Outlook Makes Bumper Crops Far From Certain

By The Commstock Report
On the Grains Happy Summer Solstice! It's hard to believe the days are already going to start getting shorter. Grains are recovering some in overnight trade after yesterday's beat-down on better rain chances for the Eastern Corn Belt in the 8- 14-day outlook. It took December corn to the lowest close in three months and November beans to the lowest close in three years. The sell-off in wheat has been unrelenting after reports, despite lower Russian production forecasts, they're back to their old ways of lowering bids until someone buys and had just lowered their export prices another $12 per tonne after telling the world two weeks ago they'd likely be raising their prices due to falling yield prospects. Overnight firmness, may be the result of weather forecast "whiplash." That's because yesterday afternoon the NWS issued its new 30-day outlook and it shows nearly the entire Corn Belt to be hotter and drier than normal. Further, the Climate Prediction Center issued its new long-term forecasts for July through September and sure enough, it portends a challenging growing season. Looking first at the 3-month temperature outlook, the whole country is going to stay hotter than normal except for the Pacific Coast…
Read More

06/20/24 Afternoon CommStock Report – Will Kennedy Matter

By The Commstock Report
After failing to gain any traction in the Democrat Presidential primaries, Robert F. Kennedy Jr. (RFK Jr.) announced his intentions to run for President as an independent. Given the historical ineffectiveness of 3rd party candidates in US elections this move all but guarantees that Kennedy will not stand a chance in the November elections. That said, he now has the potential to act as a spoiler, pulling just enough votes from one candidate or the other in just a couple key states, potentially swinging the election to the other major party candidate.   Over the last 150 years there have only been 3 significant 3rd party candidates who managed to materially impact the outcome of a presidential election. In 1912, former Republican President Teddy Roosevelt ran against the incumbent, his successor, William Howard Taft. He managed to pull around 27% of the popular vote, and 88 of the then 531 Electoral College votes, effectively splitting the Republican votes and ushering the Democrat Woodrow Wilson into office. It then took 80 years for another significant 3rd party candidate to materialize, in the form of billionaire businessman Ross Perot in 1992. While Perot failed to carry any states or win any Electoral…
Read More

06/20/2024 Weather Outlook Still Seen “Mostly” Benign – But Today’s New 3-Month Outlook Could Tell a Different Story

By The Commstock Report
On the Grains Grains are all lower in overnight trade, with wheat leading the losses. Wheat has been lower in 14 of the last 16 sessions on heavy harvest pressure and better than expected yields for HRW. Now we're getting yield reports for SRW as well which are coming in much higher than average and casting doubt on USDA's last estimate for that class as being too low. The short-term weather outlook is very hot over most of the country with additional intermittent rain for the Western Corn Belt but less likely for the Eastern Corn Belt. So far, the markets read it as benign. Today we'll get an update on the 3-month outlook from Climate Prediction Center but it's not out yet as of press time. With La Nina conditions settling in we could well see increased odds of stress through mid- to late summer. What we do have is an update of the 8- to 14-day outlook yesterday. It shows hot temperatures to continue over most of the country right into early July, but accompanied by above-normal precipitation over the nation's midsection and normal elsewhere. Due to the holiday yesterday we won't get weekly export sales until tomorrow.…
Read More

06/18/24 Afternoon CommStock Report – FOLLOW THE YELLOW BRICK ROAD

By The Commstock Report
I'm in CommStock's Garden City office, in Finney County, in the SW corner of Kansas, where the livestock population outnumbers the human one, by far. There are multiple cattle feed yards  exceeding  85,000 capacity (each) in and around this area, a myriad of other large, and small  ones, as well as ethanol plants, corporate hog feeding facilities, and multiple 1,000-head+ dairies.  There also lots of crops produced here, corn (mainly irrigated by center pivots), and wheat, hay, and milo on the non-irrigated ground.  To the south of us is the Texas/Oklahoma panhandle, also known for its large feed yards and dairies, and a little less known for crop production. The entire area has seen drought over the last several years, and also diminishing water tables, which has limited how much corn can be produced even with irrigation. This entire area has long been an "importer" of grain, as the consumption of grain in the area far exceeds local production, and the numbers who consume have continued to grow. Multiple (already large) custom feed yards have added significant capacity in the last 5 years, a cheese plant is being built that will encourage dairy expansion, and on and on. The feed…
Read More

06/18/2024 Crop Condition Ratings Slip a Bit, Even in the “Wet” States

By The Commstock Report
On the Grains NOTE: Markets will be closed tomorrow to mark the Juneteenth holiday. They will reopen Wednesday evening at 7 pm. This report will resume Thursday morning. Markets are mixed in overnight trade. As of 6am corn and soybeans are rebounding modestly from Monday losses while wheat continues to weaken on aggressive harvest pace and strong yields. After the close we got the weekly Crop Progress report with a few surprises. Looking at corn first, the portion rated good-to-excellent dropped two points to 72% vs. 73% expected. But it's still way better than last year's 55% and the best ratings for this point in 6 years. Only 5% rated poor to very poor, the same as last week and still well under last year 12%. Emergence came in at 93%, down 2 points from last year but a point ahead of the 5-year average. On a state-by-state basis it's noteworthy that 10 of the top 18 producing states saw declining conditions while only 6 saw improvement and two were unchanged. What's also noteworthy is that the Lake states were among those with declining ratings even though they've had abundant rainfall and apparently too much. The second set of ratings for…
Read More

Sign Up For The Commstock Report

Sign Up Now to Improve Your Marketing and Protect Your Profits

Subscribe

Already a Subscriber?
Sign In