The Commstock Report

Grains likely face some pressure at the start of the week as hedgers catch up after a busy harvest weekend. This week shapes up to be possibly the biggest harvest week of the year. An eventual turnaround back higher would fit with the speculative sentiment having shifted more bullish for agricultural futures and most other commodities. In the Headlines December corn futures were up 6 3/4 cents last week. November beans dropped 28 cents. December Chicago wheat futures climbed 9 3/4 cents and Dec KC wheat futures gained 21 1/4. October live cattle were up $2.55 while Oct feeders finished the week better by $3.25. October lean hogs were up $1.97 and the December contract earned $2.77. The Friday Commitments of Traders report (see below) showed funds with the smallest net-short positions of the year in corn and wheat, with the soybean net-short very close to the year's low. The spec soybean oil holding turned net-long. Just as much attention is being paid to the producer/merchant traders that involve elevators hedging grain purchases from farmers. The commercial corn position was most recently net-short by about -157,000 contracts compared to the year before at -34,000 contracts. The bigger commercial corn net-short…

Government officials are saying that the Federal Emergency Management Agency may run out of money before the end of next month. With the hurricane season still possibly active through the rest of fall, FEMA has been stretched thin while it is currently dealing with the aftermath of Hurricane Helene. This year was already busy for FEMA and other aid organizations because of severe tornados and floods.   Numerous natural disasters have challenged agriculture in 2024. For the U.S., it started early with the first six months of the year including over twice as many hail events than what occurred through all of 2023. Texas, Kansas, and Illinois were the states with the most hail this year. Deadly tornados started up in January and accelerated toward Iowa's devastating tornado in May. Tornados were involved in 13 of the 20 natural disasters this year that caused damages of more than $1 billion. Other of those billion-dollar events included a late-spring derecho in the South, the New Mexico wildfires at the start of summer, and the historic June flood around the shared corners of South Dakota, Minnesota, Iowa, and Nebraska.   There have been notable natural disasters outside of the U.S. this year…

On the Grains It’s hard to believe as dry is it is that we’re stuck in the mud, metaphorically speaking, on these markets. Lack of conviction on either side leaves us range bound waiting for some news to break us out of this channel. Yesterday’s impressive export sales failed to gain much additional topside strength. Corn sales came in at 66.3 million bushels which brings out totals to 647 mbu for the 24/25 shipping season compared to last year’s 566 mbu. History tells us that demand rallies are to be bought and production rallies are to be sold, yet we are unsure what type of rally this us. While that seems like an easy enough question to answer, yet this feels like both as we have excellent exports and production issues south of the equator. Will it rain, won’t it rain in Brazil- that is the question. Some weather maps had increased rain chances in the driest of areas in Brazil, yet till it hits the ground, and of any meaningful amount its limited risk off mentality. Now shifting even farther south, Argentina’s corn plantings were reported at 10% this week, 8% last week, 12% last year and 17% on…

No one should be surprised by the level of acrimony, death and destruction in the Middle East. Conflict there has gone back centuries and appears to be ingrained in the DNA of those surviving there. In many cases such as Gaza, survival is all that there is. Israel's primary concern is survival as well. This region's historical conflict is literally pre-biblical and driven by the religious fervor of its inhabitants which takes it to a new level and keeps it there. The 'eye for an eye' 'tooth for a tooth' reprisals carrying on today reach back before Christ. When a father is killed, the son picks up his weapon and so on and so on. Reprisal spurs revenge. This circular firing squad is still unfolding in the events of today. Theoretically Christianity was supposed to be the cure for the conflict with a liberal dose of 'turn the other cheek' intended to diffuse it. Then came the Crusades which were an example of hypocrisy that eventually contributed further to the conflict rather than end it. Both sides of the current conflict appear to believe that the only solution is the elimination from the earth of their antagonist. Even a cease…

On the Grains Harvest pressure as we turn the page towards the weekend could be the theme for today and tomorrow. There is basically zero chance of rain to slow anybody down in the Corn Belt. Yesterday’s release of a well followed brokerage house came in at 184 bpa on corn was up 1.1 bpa. While corn didn’t react yesterday to this I’m sure we will have some sort of a breather heading into the weekend. EIA ethanol production numbers were positive yesterday as well. Traders were expecting a slightly lower print yet got a 21,000 barrels per day increase, currently at 1.015 mbp. Flash sale have been positive, 195,000 MT announced yesterday morning, and weekly export totals released this morning will be watched closely. This content is for members only.Register Already a member? Log in here

Brazil's Central growing region remains dry this week, but next week's forecast finally sees some precipitation trickling in. Volumes remain low, but most regions should see between 0.5" to 1.5". While this is not sufficient to build any soil moisture, it may encourage producers to accelerate planting with the hope that more will be on the way. The northwest corner of Mato Grosso continues to be the sweet spot receiving the bulk of the rains as well as in RGDS. But pretty much everything in between remains below average. The 30-day weather outlook for October shows improvement but it all appears to be back ended. We don't see much of the rainfall starting to build until October 10th.   Our research suggests we are still in the very early stages of Brazil's planting window. Historically Brazil has had roughly 10% of their crop planted around October 6th. They will likely fall short of that this year. 70% of their crop should be planted by November 23rd. November was our primary planting season on our farm in Bahia. The point is that while Brazil is arguably a week behind on their planting, there is still plenty of time to catch up…

On the Grains Good morning, yesterday’s market appears to be a little more than Turn Around Tuesday as we continue to grind higher this morning, up 4 on corn and 5 on soybeans. While there is little argument that the outside geopolitical news yesterday, Iran shooting missiles into Israel, brought crude oil and wheat to life pulling corn with it. Soybeans on the other hand had a wide trading range, wanting to come along for the ride but with harvest in full swing struggled to gain much momentum. Funds are estimated to have covered most of the net short position in beans and oil while adding to the meal longs. This content is for members only.Register Already a member? Log in here

The lack of a new farm bill, not updated since 2018, has negatively impacted me. I applied for conservation waterway CRP as part of an NRCS cost sharing program in July that they expected to be approved in August so we could get the work done this summer. August came and went with no word of approval. It is now October. Now they informed me that they cannot approve it until the next fiscal year. They assure me that it will eventually be approved but we will miss the opportunity of having had this land in prevent-plant corn when the work could have been done this summer with no crop damage. They tell me that the lack of new farm bill authorization for CRP funding causes it to be approved in tranches, limiting and delaying approval. Most likely now, at least some of this work will have to be done next spring. It is frustrating. For most farmers the most important component of the farm bill is crop insurance funding. Crop insurance is really the only safety net that farmers now have. It will be attacked in the next farm bill from both sides of the aisle in Congress because…

On the Grains Good morning, yesterday’s USDA stocks report was everything that we thought and maybe a slight touch more. Corn was the leader, as usually is in September stocks report, although we are lacking follow-through this morning and the energy complex is pulling gains down with it. Crude oil is off $1.24 this morning at $66.92 eyeing the low from September 10th of $64.61. Increased supply from OPEC+, set to unwind production cuts around December, and poor economic data from China. The latest reports show that they had a 5th consecutive month of contraction in manufacturing activities. While China has stepped in to booster its economy recently, it’s going to take time. This content is for members only.Register Already a member? Log in here

Our local ethanol plant briefly pushed their bid 25 cents over CBOT for a short period of time Friday, as despite the onset of harvest, the end-user pipeline is slow to refill. Same for soybeans. Spot soybean basis has improved as well. Cash soybean bids have been poking above $10 bushel which is a psychological trigger point for some farmers in order to spur consideration of sales. It is odd to see the basis improve as harvest activity initially ramped up but is likely to weaken when enough trucks cross scales. We have been asking the question as to how grain stocks have supposedly expanded year to year, yet end-users act short bought and needing supply. Again, this is regional.   Price lows, seasonal lows, were set in late February and again in late August related to commercial basis and price-later contracts where farmers let the pricing default to expiration. Farmers Should Stop Doing That!   USDA put quarterly corn stocks at 1.76 bln bushels which was 84 mln bushel below the average trade estimate. Demand continues to exceed trade expectations. There is not much sign of any increase in corn stocks west of I-35. In fact, in the flooded…