The Commstock Report

On the Grains How quickly things change. With the final USDA report released last week, we now have something to look forward to in the markets: some risk to trade. It reminds me of watching a Mayweather fight, all defense, then boom a few quick jabs, and the momentum has changed. It’s all about the splash on the wires now. Are you at 93 million corn acres or 95 or even 96 million for the prospective planting report? Some well-followed analysts came out yesterday at 93.5 corn acres and soybeans at 83.3 for 176.8 million row crop acres. The ratio of 2.28 would lead me to believe that the corn number is too low. The frustration of beans north on I90 is real. All indications are more corn in Iowa/Minnesota. Crop Insurance pricing is set to start shortly, and that will have as much of an effect on what is planted as anything.  This content is for members only.Register Already a member? Log in here

Mexico (Forth in a series) President Trump says that he intends to impose 25% tariffs on Mexican imports into the US but has not extended the same hand to Mexico to join the US as a state that he has Canada. He is serious about border issues with Mexico, combating illegal immigration crossings along with drug trafficking and smuggling. He has brought up these same issues with Canada but Canada is nowhere near the problem that Mexico is. Canada is already rushing to expand its border and customs controls responding to Trump. Mexico doesn't break as much sweat despite the temperature there officially interfering with illegal trade fearing retaliation from the Cartels. Its government has been infiltrated by the Cartels. They go for high profile actions to impress the US but accept the Cartels as part of their national identity, often protecting them rather than fighting them. Partnering with China for a source of fentanyl, the Mexican drug Cartels are threatened by the US that they will be declared Foreign Terrorist Organizations which gives our government authorization to use the military and all other resources against them. Expect the White House to declare a number of 'emergencies', both foreign and domestic, as these declarations…

On the Grains Good Tuesday morning: the much-awaited Presidential Inauguration is done and over now. What happens next? The famed first 100, will the 45Z make it to the table, or is that card even in the deck?  Let’s shuffle up and deal. This content is for members only.Register Already a member? Log in here

Most U.S. markets are closed in observance of Martin Luther King Jr. Day. Grain futures will open at 7 pm central for the Tuesday session. Early calls are for a stronger start in light of expected bullish enthusiasm showing across outside financial markets. In the Headlines The dollar index was trading sharply lower in a shortened session this morning, in part reflecting expectations for President Trump to lay out his economic agenda but not to immediately enact new tariffs. It was being reported that Trump has a memo prepared for release that will direct a review of trade policy involving China, Mexico, Canada, and others, without attaching tariff hikes to any of the new executive orders that are likely to be announced this week. Crude oil prices were under pressure in anticipation of Trump's executive orders including deregulation of the industry and support for the expansion of production. Risk premium was also leaving the oil market after a ceasefire started between Israel and Hamas, which de-escalated tensions with Iran at least temporarily. WTI crude futures rallied from under $70 per barrel to just under $80 in just the last month. Traders are split about what to expect regarding the direction…

Corn and soybean futures have strengthened over the last month, but basis has generally weakened. Higher board values offer an additional incentive for farmers to let go of more old-crop grain during a month that normally already features some of the year's heaviest selling activity outside of harvest. Grain merchandisers are also in a window of relative comfort given that there is carry in the price curve and still almost a month and half to go before March futures enter the delivery period. Marketing decisions being made following the latest futures rally should include particular consideration of your outlook for basis and whether or not it can improve before the grain will be delivered. Look at the futures spreads as well and run the math on whether carry premiums plus the potential basis gain will be enough compensation to offset your storage costs.   If you think that futures are nearing a top, that basis will not firm up again, and that the futures spreads are not wide enough to make deferred delivery pay off, then you should be selling cash grain at the current spot price. You should do nothing and wait if you believe that basis and board…

On the Grains Good Friday morning: enjoy the 3-day weekend and mourn the death of the greatest baseball announcer, Bob Uecker voice of the Milwaukee Brewers. Many of you remember him from the movie Major League, while I happen to remember listening to him growing up riding (sleeping) in the hay cutter as my dad cut hay after chores in the summer.   Here we go. We have talked about the July/Dec spread inverting with carryout falling, which is justified by the latest USDA report. From a 10,000-foot view, it looks like we will plant 95 million acres, maybe more (puke). So, the real question is can we rally the 2025 December corn? Well, there are several factors that could play a vital role in that. Yes, I will admit the $10 billion in government handouts will help shore up balance sheets and, most importantly, cash flows; there is no debate there. The spreads failed to address just what trendline yields will be on 95 million acres. This content is for members only.Register Already a member? Log in here

PLEASE REFER TO THE BROKER COMMENTARY PAGE FOR UPDATES!! Canada (third in a series) A lot of Americans, unhappy over the November election of President Trump, looked at possible new countries of residence. Web Searches for moving to Canada rose 45%. I think the more they research moving to Canada what they will find is that they are far better off here in the states. Canada is a mess. There is a reason why its dollar is worth 30% less than ours. For every problem that we have with affordable housing and affordability in general, there is more reason for Canadians to move to the US than the other way around. Investment capital has been pouring out of Canada, mostly to the US, coinciding with the election of Pierre Trudeau as Prime Minster in 2015. They pay high taxes and get free education and health care but the cost is eating them up. They spend so much on their socialist structure they have nothing left to fund a modern military with, which means they depend on us for defense. They are at the bottom of GDP spending percentage on NATO. President Trump has said that he would not come to aid of NATO…

esterday, soybean crush numbers were released by NOPA, and yes, we had another record bean crush. We outlined the details in yesterday afternoon’s “broker comments” section if you want to look. The Des Moines Register reported that two Iowa Biodiesel plants have shut down due to the Biden administration’s lack of 45z guidance. The $1.00-per-gallon blender tax credit expired on December 31st. Plants shutting down is never a good sign, yet how can one blame them? The 45z guidance had been promised for over a year, and we have no more ideas than we did back then on what will qualify. Now, fast forward to later yesterday afternoon. The USDA did, in fact, release some preliminary guidance. Honestly, what is the point? We have a new administration coming in on Monday, and we really have no idea what he will do with the entire Inflation Reduction Act. The agency has released a calculator to calculate their own carbon intensity score based on your county. The idea is that the Treasury Department will take the hints from USDA when releasing their final rules.    This content is for members only.Register Already a member? Log in here

The same weather pattern in Brazil will continue this week with above average precipitation in the North and below average to the South. We do see rainfall beginning to return around January 20th and building into the end of the month but to what degree is uncertain. Everyday stress damage builds, especially in Argentina where temperatures remain elevated. While most of the dry pattern has fallen on RGDS, parts of western Parana and Mato Grosso do Sul have also been affected. We do see 2+ inches falling early next week in many areas but until then farmers will be on edge. It should improve conditions in Parana and Mato Grosso do Sul but showers do not appear to be as widespread in RGDS and Argentina.  While we typically rely more on the European model, it is important to note that the GFS model is much more generous, seeing widespread rainfall by January 27th.   The dry weather in RGDS will undoubtedly have an impact on soybeans yields, however they still have time to recover. It will likely have a greater impact on first crop corn yields that find themselves in the critical ear fill stage. Nearly 10% of the first…

Overnight, we did get a fill on our reco selling $4.90 corn. The gaps in production estimates between USDA and CONAB continue to haunt us. Last year it was the beans. CONAB continued to reduce the size of the Brazilian crop while USDA came down some, they never did meet. This year, the corn production number caught my eye. USDA held steady the last report at 127 MMT, while CONAB released 119.6 MMT yesterday. World balance sheets are the tightest we have been in 10 years, and every bushel matters. Our contacts in Brazil continue to stress that the country’s corn demand is underestimated. Here in the U.S., we fear planting 95 million acres and overproducing. Judging by the July/Dec corn spread, that is everybody’s opinion, long-foreseen problems seldom arise. The bottom line is that the 2025 crops have not even been delivered to the seed shed, and we have a long way to go before we have a corn stocks problem. While we are dipping our toes in the water to make some new crop corn sales, we are only dipping for now. I must deliver all my corn in the fall with no storage; without forward sales, I…