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05/06/24 Surprise-Surprise

By The Commstock Report
Given the record short winter and unprecedented amount of crop preparation that had been done this spring, I was expecting that this year may have been the first when both my corn and soybeans entirely got planted here in April. About half of the family's corn got in and no soybeans. 39% of the corn and 25% of soybeans were planted in April in Iowa. April was cold and wet with only a few days where planters could run. Northern tier states…the Dakotas, Minnesota, Wisconsin and Michigan were all single digits for planting progress in April. The problem is that not much may be going to get planted in the first half of May either and the conditions of what gets planted may be poor as they are mudded in. We are now wet. Our soil profile is full and rain is left standing to drain by tiles, creeks and rivers. The drought has been drowned here in NW IA. Probably shouldn't complain about standing water here when they got up to two feet in TX, OK and AR which caused real flooding. Again…Dr. Elwynn Taylor says that Iowa moisture in May is determined by precip conditions in AR. Air…
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05/06/2024 Focus This Week Will Be on Planting Progress and Friday WASDE Guesstimates

By The Commstock Report
On the Grains Grains are weak in overnight trade wheat down double digits on some welcome rain in the parched western half of southern Plains states. There is little doubt this afternoon’s crop progress report will show the lead in planting progress for corn and beans with “normal” is gone if not a little behind. But models are conflicted with one suggesting a drier pattern developing by midweek and into the following week that will allow planting to pick up again while another sees the wet pattern less widespread but still problematic from Iowa eastward well into mid-month.   What hasn’t changed over the weekend is the increasingly grim flooding in southern Brazil that’s caught half their crop (and `10% of Brazil’s total crop) unharvested and much of it in standing water. We’ve got the May WASDE due Friday. USDA’s Brazilian crop estimates for both corn and beans have already been regarded as far too high for months and now another 2-5 million tonnes may be lost altogether according to Brazilian sources.   This content is for members only.Log In Register
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05/05/2024 Sunday Market Preview

By The Commstock Report
Planting delays are likely to be extended early in the week before a forecast that looks more conducive to progress, which could help lean on grain prices at the open. In the Headlines July corn futures rallied 10 1/4 cents last week while July soybeans jumped 37 3/4. The most active Chicago wheat contract managed to hold a gain of 1/4-cent but July KC wheat gave back 4 cents. June live cattle finished lower by $1.90 but settled within the top half of the week's range. May feeders were down $5.40. May hogs fell $1.85. The crude oil market continues to be closely watched for its influence on the broader commodities space. WTI crude futures dropped $5.75 last week to help weigh on soybean oil prices. U.S. production remains high and there had been a slight easing of tensions related to conflict in the Middle East. Domestic gasoline demand should start to ramp up considerably as Memorial Day approaches to kick off summer vacation season. Israel's war on terrorism could be poised to escalate this week as it looks like Gaza ceasefire talks in Egypt are not going to wrap up with any agreement this weekend. Weather in South America…
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05/03/24 Objectives for Potential Technical and Weather Rallies

By The Commstock Report
For corn, RJO technician Dave Toth identifies the current price strength as being still only a "bear market correction" that would mark out a C-Wave on the Elliott count, but he says the alternative is for this rally to be a "dramatic 3rd-Wave of a major reversal higher." The possibility of broader trend change needs to see July corn futures sustain a move above $4.75, which would complete a 50-percent retracement of the slide from the October high. July soybeans have to first clear their March high at $12.40 before they can reach the 50-percent retracement level at $12.81.   On the way higher, old-crop corn and soybean futures could possibly face pushback from heavier farmer selling. At $4.75, many farmers across the country are getting close to or above $4.50 cash values while a rally toward the $12.81 futures target would likely bring the average cash soybean bid near $12. It is also notable that a rally for July corn to $4.75 should be expected to poke the new-crop December contract into the $4.90's. More farmers are expected to make their first sales or hedges for the new-crop if the December contract gets close to $5, which is not…
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05/03/2024 Grains Firm Again Overnight as Most News is Turning Supportive

By The Commstock Report
On the Grains Grains are up again in overnight trade. Concern that a prolonged bout of soggy weather for much of the Midwest will greatly slow planting progress remains the driving force. Yesterday’s weekly export sales were at least mid-range vs. expectations for beans but at the low end for corn and wheat and didn’t even make the low end for SBM. Yesterday’s announcement of a looming rail strike in Canada could halt their grain shipping if prolonged and potentially shift more business to the U.S. (More on other Ag implications below.)   Even though Brazil is down to its last 10% of the crop to harvest, rains have been so severe in the southern tip that 2-5 million tonnes of beans and corn might actually be lost and their crop estimates were already well below USDA’s. We’ve set a target for selling more old-crop and the first 10% of new crop beans based on the July contract. It shows first resistance at 1225.  This content is for members only.Log In Register
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05/02/24 Neither Happy nor Polite About It

By The Commstock Report
When the Biden Administration released its new rules allowing corn ethanol to qualify for SAF credits, I noted how the biofuel industry took what to me felt like a gut-punch with barely a whimper. They said that they saw it as "opening a door" but that is fantasy. The door stayed shut. The new standard did decrease the controversial indirect land use change (ILUC) penalty in the 40B GREET model by over 20 percent which was hoped for. However, that penalty was unjustified in the first place so they really gave us nothing. We will raise about as much corn on the moon that qualifies for SAF given the agronomic restrictions emplaced on what it takes for corn to qualify. It appeared that the biofuel industry reaction was that they were more afraid of offending the Biden Administration then they were at truly characterizing the new rules as what they were…bull-crap. The rules released applied to 40B sustainable fuels tax credits for just this year and the previous year which means they were worthless as announced in arrears. They failed to release the model for the 45Z standard in 2025 which at this point is the pertinent info needed. There…
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05/02/2024 Weather Planting Delays Counter Disappointment over SAF Guidelines

By The Commstock Report
On the Grains Grains are firmer in overnight trade with beans leading gains. USDA reported crush in March a little lower than expected but still at an all-time record for any month. It was still enough to hint USDA's current forecast for the year is too low. Rapidly improving basis for beans in Brazil add credence to what private estimates and their own CONAB have insisted for months that their crop is much lower than what USDA has estimated. Weekly ethanol stats from EIA were supportive for corn. Production was higher and stocks lower than trade expectations. YTD data still suggests current corn usage for ethanol projected by USDA is solid and if anything, a little low. Crude oil took a big tumble, when stocks rose by 7.3 million barrels vs. expectations for a 1.5 million barrel decline. On the other hand, diesel stocks fell by 732,000 barrels and are 7% below the 5-year average. Even wheat is firmer overnight despite welcome rain forecasts for parched HRW areas because it won't stop raining in key SRW states and could now start hurting condition ratings. The forecasts for continued rainy weather slowing planting progress are an underlying supportive factor, even though…
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05/01/24 April Planting Stalled WOW, Brazil Gearing Up to Take National Ethanol Blend to E-30.

By The Commstock Report
Disappointing April Planting Progress Now Stalled   With the very early teasing of spring starting in February this year, I was anticipating the possibility of planting everything in April. I was planning to plant soybeans first. Then the weather happened. My corn went in April 25th but the soybeans will be planted in May. The family got nearly 50% of its corn in, in the short window that opened last month. The open conditions so early this year, allowed prep work which made it possible for a lot of crops to get planted in a very short open window. We had an extraordinary number of prep days this year but too few days that were actually fit to plant. Climate Scientist Eric Snodgrass was looking for things to break open in mid-April but the real spring was reluctant to arrive and is still coming in the forecast. The cool/wet pattern prevails. Looks like most crops will get planted in May. It is still snowing in the west and the frost line dips into the NE Corn Belt failing to fully retreat into Canada as well. The good news is that the area still under drought continues to shrink in the…
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05/01/2024 New SAF Guidelines Verify Worries They’d Be More Restrictive than Current GREET Model

By The Commstock Report
On the Grains Markets are mostly weaker in overnight trade. The weather outlook keeps getting wetter for much of the Corn Belt over the next couple weeks, so the planting pace "lead" compared to normal we have at present is likely to rapidly shrink and could even fall behind if the forecasts verify. Yesterday was a blitz of negatives for the grain market rooted in outside markets going into "risk off" mode ahead of this week's Fed meetings that end today. They're expected to stay hawkish on rates in their comments, more than hinting not to expect any cuts in the foreseeable future due to stubborn inflation despite slowing in GDP growth – the very definition of "stagflation" at time that stocks have only recently hit record highs. The DJIA took such a beating yesterday that we had the first lower monthly close after five straight monthly increases. They're down again overnight. The monthly DJIA chart also shows the brief poke above 40,000 was the upper Bollinger band and the Stochastics oscillator in the "overbought" zone since last fall was turning down. It spilled into the grains because the dollar made a new high on prospects for interest to stay…
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04/30/24 Japan…our Perfect Ally Being Shirked

By The Commstock Report
As a baby-boomer I am old enough to harbor some animosity toward the Japanese, not only for the Day of Infamy December 7th, 1941 that they inflicted on us but for the way they conducted the war. Japanese soldiers fought to the death which meant a lot more American soldiers had to die to kill them. There is justified ill-will in the region harbored by the Chinese and the Koreans for brutal treatment from the Japanese army. The survival rate of allied prisoners of war held by the Japanese was very low due their inhumanity. By contrast if US POWs reached German Stalags there was a high probability, they lived to talk about it after the war. The war ended and Douglas MacArthur did not repeat the mistake of Versailles ending WW1. He let the Japs up easily, allowing them to keep their Emperor, who was legitimately a war criminal, recover their dignity and due to good behavior, their independence. The Japanese people took it from there, rebuilding their nation and joining the community of nations to become a respected ally from the last cold war into this new one. They are a stable liberal Western democracy and one of…
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