Skip to main content

CommStock Reports

Click a report below to read more.

  • 03/28/2024 Trade Anxiously Awaits Planting Intentions, With a Late Breaking Estimate from One Firm Leaning Friendly to Corn
    On the Grains Good morning. Tomorrow is Good Friday so markets are closed and we'll have no reports tomorrow. We wish you and your family a joyous Easter. Grains are quietly mixed in overnight trade. As of 6am corn was steady, beans soft and wheat on the firm side. At 7:30, we'll get weekly export sales, which could set the tone for trade leading into the 11am release of the long awaited Prospective Plantings and Quarterly Grain Stocks reports. Here are the ranges of expected sales: Corn, 800K to 1.3 million tonnes, Soybeans, 300-700K, wheat, from negative 100K (due to cancellations exceeding sales) to 300,000 tonnes. This afternoon's report will cover the highlights and market impact of the two big reports coming out at 11 am. Here once again are the averages and ranges of trade estimates for planting intentions. A late breaking release of estimates from Farmers Business Network (FBN) that weren't included among other firms surveyed tilts the odds toward a bigger shift from corn to beans. They have an admirable track record for their estimates and while the lowest trade estimate for corn acreage is 90 million acres with an average of 91.8 million, FBN has the number at 89.7 million with what they call "high confidence." Their soybean estimate is 87 million, well within the range of other trade estimates but 300,000 acres higher than the trade average at 86.7 million. As for the quarterly Grain Stocks, the average estimate for corn is 8.445 billion bu., up 14.2% from last year. ...
    » Continue Reading
  • 03/27/24 April is critical to Brazil’s Safrinha Corn Season
    Brazil is about 75% complete overall with the soybean harvest mid-week with Brazilian farmers hoping the harvest low is behind them. The majority of the soybean crop remaining to be harvested is centered in both Southern Brazil and the Northeast.  Mato Grosso is wrapping up harvest this week while Rio Grande do Sul is just getting started yet with only 5% complete. We have 40% remaining to harvest on our farm in Minas Gerais.  Heavy rains have slowed the harvest which is both a blessing and a curse.  Rain at harvest can hurt seed quality on the beans but it is also helpful for second crop corn.   Surprisingly, yields are phenomenal so far on the family farm.  The running soybean average is around 72 bpa, with one field that did 83 bpa.  But we have our weaker fields remaining, and so we expect overall yield to fall to 65 bpa or less.  This is still at or slightly above our APH.  I would not have expected yields to rebound like this considering the start to the year.  We had our farm Christmas party around December 16th and things were looking pretty bleak at that point.  One big difference is that our region plants a month or more later than in Mato Grosso.  We skipped most of the early season drought in October/November.  Mid December the rain started to pick up and it never really stopped. Historically I would say planting early is a yield boosting strategy – but that was not ...
    » Continue Reading
  • 03/27/2024 Trade Braces for Big Reports and Fallout from Latest Supply Chain Disruption
    On the Grains Grains are weaker in overnight trading as this goes to press around 6am. Traders continue to position themselves for tomorrow's big day. USDA will release both the Prospective Plantings Report and Mar. 1 Grain Stocks at 11am and the range of trade estimates is wide enough on both reports to trigger significant market reaction if USDA's numbers come in near either end of those ranges. The news is dominated by the supply chain disruption likely with that catastrophic bridge collapse in Boston now blocking ship traffic in and out of that key port. Agricultural trade is impacted as detailed below. Recriminations will focus in coming weeks that will challenge politicians, engineers, and executives. How did a ship striking a single pier take out the whole bridge? Where were backup systems to steer the ship? Why were there no early warnings and tugboats available? Who is liable for costs of cleanup? It's bittersweet in the wake of the cattle market collapse on the bird flu in cattle story yesterday, but a new report assures that Americans remain big meat eaters. Despite decades of attacks on livestock operations by environmental zealots, the new "Power of Meat" report from the Meat Institute and the Food Industry Association found 80% of Americans unabashedly describe themselves as meat eaters and 98% of U.S. households purchase meat regularly. That's unchanged from last year's survey. In other news, a rare event, Chinese President Xi Jinping has just met personally with a group of U.S. businessmen and scholars as he ...
    » Continue Reading
  • 03/26/24 More E-15 Needs to be Put into the Game
    When I checked into the motel in Omaha for the NCAA tournament there last week, there to root for ISU this time, the topic being discussed at the desk was not the time for checkout or basketball…it was shocking gas prices. The clerk was complaining that gas prices had jumped 40 cents a gallon in just a few days there. She was critical of US oil exports seeing that as inflating our domestic price. That view surprised me a little bit. Another individual checking in was blaming it on greedy oil companies. US oil companies are producing record amounts of oil. Geopolitical turmoil has supported prices. Frankly some of it was the winter/spring blend seasonal adjustment. They switch from winter blends which are cheaper to more expensive summer blends. It was an all of the above confluence of issues that sent gas prices on a run. I was able to tank up on E-15 in Omaha for $3.19 gallon compared to E-10 for $3.29. Again, E-15 reduces pump prices rather than increases them as the Biden Administration fears. E-85 ethanol at our home station was $2.19 a gallon. My previous fill of E-30 had been just $2.69 a gallon. Average US gas prices were 10 cents higher than a year ago last week. It was the abruptness of the price increase that infuriated consumers. Gas price hikes won’t help bring down inflation numbers. Inflation continues to annoy consumers.   Minnesotans have always led the nation as ethanol consumers. They are the top ...
    » Continue Reading
  • 03/26/2024 Export Pace Stays Strong for Corn, But Lags in Beans and Wheat
    On the Grains Grains are soft in overnight trade as spring planting prospects continue improving and traders focus on positioning for possible surprises in Thursday's Prospective Plantings and Grain Stocks reports. Fund activity has been inconclusive so far, but being so heavily short they're more likely to be lightening up some going into Thursday's reports. Yesterday's weekly export inspections continue supportive for corn. They were in the upper end of the range of expectations. While YTD export sales are running behind the needed pace, the amount actually shipped, is now 33.6% ahead of last year versus USDA forecasts for a 26.4% increase. Alas, that's not the case for soybeans. Inspections were only mid-range versus expectations and year to date actual shipments lag last year by 18.7% versus USDA's forecast for only a 13.7% decline. Once again, wheat loadings came in at the low end of expectations. With only two months left in the marketing year shipments are down 15.1% versus the current forecast for only a 6.5% decline. Key winter wheat states issued new monthly crop ratings yesterday and overall, winter wheat continued to improve, with slight declines for Kansas and South Dakota. USDA doesn't resume its weekly crop progress reports for the whole country until April. On the Hogs: Hog futures managed to buck the selling in cattle for a second straight session and closed solidly higher yesterday. Hopefully, that ended the downside correction. The range of cash prices paid across the country was unchanged for a 3rd straight report, but the national average price ...
    » Continue Reading
  • 03/25/24 Correction of the Correction into March USDA Reports
    Both corn and soybean markets have posted corrective rallies from February John Deere lows. We are a long way, technically or fundamentally, from turning major trends bullish. Short-covering appeared to run out late last week completing the first leg up of something. The best we should hope for is that the John Deere low holds if tested and the upside correction is complex and incomplete. If so, after this pullback another leg of rally would resume. Ellioticians call it an A-B-C corrective chart pattern.   Farmers were making some catch-up sales on flash bids from our local ethanol plant. They briefly pushed 22 cents over CBOT here and got offers filled quickly. Most farmers are hoping for more however. Sales are mostly driven by cash flow needs. Soybean basis improved a nickel but remained well below last year's basis levels.   USDA will provide some fundamental fodder for markets to chew over later this week in their quarterly stocks and planting intentions reports. The stocks report should tell us a couple things. It gives a read on demand consumption and also tells us where grain is positioned. In corn and soybeans; domestic usage, feed and biofuel, should be up versus a reduction in exports. Net usage should still be net positive for corn. Commercials have not been flooded with supply in the WCB which suggests regional tightness remains despite enlarged carryover stocks. This is adjusted for by basis levels. Are farmers as undersold on corn as the trade believes? There was a physiological capitulation ...
    » Continue Reading
  • 03/25/2024 Trade Estimates for Prospective Plantings and Mar. 1 Stocks Vary Widely
    On the Grains Grains are mostly firm in overnight trade to start the week. Weekend rains and snow are welcome in the northern stretches of the country and the market is ignoring fierce Russian attacks on Ukraine's energy grid and weekend reports of manpower strains on Ukraine's struggling military. Focus this week will be on trade positioning ahead of Thursday's Prospective Plantings Report and the March 1 Grain Stocks. Trade estimates are out. The guesstimates put forth at USDA's Outlook Forum last month are presumed to be what's "in the market", so of most interest is how the trade estimates compare to those. For corn, the average is 91.8 million acres, up 800K from the Forum numbers. Estimates range, however from 90 to 93.8 million. For soybeans, the trade average is 85.7 million, down 800K from the Forum number. The range of estimates, are even wider for beans from as low as 84.3 million to as high as 89 million.  For wheat, all wheat is put at 47.3 million acres up 300,000 from the Forum estimate. There was no Forum estimate for spring wheat, but the trade estimate is down 300,000 acres from last year. Turning to Mar. 1 Grain Stocks, the avg. trade estimate for corn is 8.445 billion bu., up 14.2% from last year. However, there's more than a 600 million bu. range from low to high. For beans, the trade is looking for stocks to be 8.8% on average, but there's a 446 million bu. range from low to high. As for ...
    » Continue Reading
  • 03/24/2024 Sunday Market Preview
    Grains may have room to bounce at the start of the week if outside financial markets stabilize to allow the dollar to level off. In the Headlines Global security has been tested by the Friday night attack on a concert hall in Moscow that reportedly killed at least 133 civilians. The Islamic State group claimed responsibility for the act, likely as a form of revenge against Russia's targeting of ISIS in Syria. Vladimir Putin alleged that Ukraine was involved, something that Ukraine denies. There was a favorable shift in the forecast for South America that helped weigh on corn and soybean prices late last week. Rain was on tap for Mato Grosso and other key corn growing states in Brazil. It was expected to turn drier over the next few weeks in Argentina, where excessive rainfall had been threatening the quality of the soybean crop and delaying the start of harvest in some areas. It hurt the U.S. export outlook that the Chinese yuan fell to a four-month low against the dollar on Friday. China's state-owned banks reportedly had to step in and support their currency. The yuan has weakened in response to growing concern over the Chinese economy and expectations that the government will have intervene with easier monetary policies. May Chicago wheat futures had their first higher weekly high of the last two months. It helped that French wheat futures hurdled a key point of technical resistance on Friday, which put the nearby contract up by just more than 10 percent from its ...
    » Continue Reading
  • 03/22/24 News of the Day
    News of the Day   A bearish tone developed for the grains on Friday morning as traders watched moisture move across the radar. Whether rain or snow, coverage was wide and spanned across most of the Dakotas, Minnesota, Iowa, and Wisconsin. The system was staying mostly intact as it crossed the Mississippi River. Another round of showers was expected to start up late in the weekend. The forecast was also shifting favorably for South America.   Futures volume looked to remain on the lighter side as some traders were probably preoccupied with the March Madness tournament. In actuality, corn and soybean volumes have been on a general decline since prices put in their lows on February 26th, the Monday following the expiration of March options. Open interest dropped off briefly as March futures went into the delivery period, but the numbers have since rebounded, which fits with the idea that the shorts bought back by speculators have been new contracts sold by the farmer.   After building up a record net-short position on corn in February, hedge funds quickly reduced that bearish bet by about 25 percent. Over the same timeframe, commercial hedgers flipped net-short in corn for the first time since December. The trend of speculators buying grain from farmers at increasingly higher prices could develop further into the new spring season, but it will first require that the nascent market recovery is not derailed by next week's crop reports.   The Prospective Plantings and quarterly Grain Stocks reports are scheduled for Thursday, the last trading day ...
    » Continue Reading
  • 03/22/2024 Latest Long-term Weather Forecasts Show Some Potential Trouble Spots
    On the Grains Grains and soybeans are soft in overnight trade with soybeans down double-digits at 6am. Yesterday's weekly export sales were mixed. Corn sales were in the upper half of the range of expectations while soybean sales were midrange. Wheat cancellations exceeded new sales by 110,000 tonnes. On a year-to-date basis, sales for corn and beans now lag the pace needed to justify USDA's current forecast for the year. Ironically, YTD wheat sales built up enough "cushion" on stronger sales earlier in the year that with just two months left in the marketing year they are still on pace to meet or beat USDA's current forecast. Speculation about what next Friday's Prospective Plantings report will show for the '24 "acreage mix" continues to mount. We should see some more private survey results over the weekend and will likely have the averages and ranges of expectations early next week as well. At issue will be how they vary from USDA's Outlook Forum forecast for corn at 91 million acres (down from 94.6 this year) and for beans at 86 million (up from 83.6 million this year.) There will also be a quarterly Grain Stocks report next Friday and we should have trade estimates for those as well by mid-week at latest. NOAA's Climate Prediction Center came out with their latest 3-month outlook through June for precipitation and temperature yesterday. That will take us through planting season. Above average temps with only average rainfall pose a slight risk of stress for the upper Midwest, ...
    » Continue Reading
  • 03/21/24 All Meat Sold in the US is not a Product of the US
    Why Label it So?   It took a while but mandatory "Country-of-Origin labeling" has now become voluntary "Product-of-America labeling." This rule, finally finalized by USDA, addresses a loophole created by the repeal of mandatory country-of-origin labeling in 2015 after which multinational meatpacking corporations began placing a "Product of U.S.A." label on imported meat packaged in the U.S. I was an active promoter of mandatory Country-of-Origin labeling which split the livestock/meat industries down the middle. It seemed to me that other countries were allowed to identify their product origin with labeling but somehow it was a restriction for us to do likewise. If mandatory, there was a cost to it but consumers said that they were willing to pay to know where the meat they purchased came from. This was back in the time when BSE in other countries threatened US consumer confidence here. Our meat import competitors saw this labeling as a trade violation and were willing to take a complaint to the WTO. Again, it was difficult to differentiate how our labeling products failed to comply with trade rules while theirs did. The playing field did not feel level. Mandatory Country of Origin labeling was taken under complaint in 2014 to the WTO which ruled against it in favor of Canada and Mexico. It was rewritten to become compliant to avoid retaliatory tariffs and the final rule didn't change that. This still is still not what a lot of industry was looking for but where it is likely to end up.   It ...
    » Continue Reading
  • 03/21/2024 Soybeans Show the Most Promising Chart Action in Months
    On the Grains Overnight grains are all on the firm side as of 6am. Yesterday's action in soybeans was especially impressive. Rising palm oil prices are boosting SBO and even though China has been focusing on buying Brazilian beans, their demand has been surprisingly strong. Prices in Dalian have rallied past the U.S. equivalent of 1450 and the highest in two months. On the May chart, we broke the downtrend early last week, tested the point of breakout by Friday, but have now taken out the prior high to form a fledgling uptrend line. Even more importantly, it closed above the 50-day moving average, which could trigger more short covering by funds.
    » Continue Reading
  • 03/20/24 Biodiesel versus Renewable Diesel
    One Clear Winner   Brazilian soybean production expansion appears to be hitting the wall. Every year they have planted more area and expected higher yields. CommStock estimates this year's Brazilian production will be 145 mmts compared to 154.6 mmts last year. Remember they started out looking for larger production this crop season so the turnaround has been dramatic. Profitability has been lost so the trend to grow more acres each year has potentially hit a wall.   The US has essentially conceded soybean export growth to Brazil. However, Brazilian soybean exports are likely to get curtailed below projections by less supply which could be made up by the US or Argentina. In the US the soybean industry has turned to domestic consumption for its demand growth. There has been a lot of hype and a lot of forecasts for expanding the domestic crush using soy oil as the feedstock for biofuel. Domestic soybean demand growth has been driven by a desire to reduce petroleum dependency transitioning to low-carbon renewable fuels.   The National Oilseed Processors Association (NOPA) released February crush data last Friday.  NOPA members processed 186.2 million bushels of soybeans in February, up 0.2% from January and 12.6% from February 2023. The February crush was the largest on record for the month which came as a surprise to the trade that had estimated a crush of just 178.1 million bushels, a substantive miss. The lack of winter allowed plants to operate more capacity. One consequence of the larger than expected soybean crush was resulting in ...
    » Continue Reading
  • 03/20/2024 New Trade Skirmishes Erupting Here and Abroad Over Unfair Trade Practices
    On the Grains Grains are mixed in overnight trade with corn mostly steady, beans firm but wheat soft. The latest 2-week forecast calls for above-normal rain over the whole country with heaviest amounts forecast for where it's needed most, the Pacific Northwest and Western Corn Belt. Temps are forecasted to be cooler than normal for most of the country as well, which means late season snow for some.
    » Continue Reading
  • 03/19/24 Election Year Lows in Natural Gas
    How and Why   The US is the world's largest exporter of natural gas, with supply growth unleashed by the technology of fracking as the co-product of shale oil production. While there have been NG supply reductions in Europe primarily caused by geopolitical conflict with Russia which had been their main supplier, the US has the capacity, given time to build the LNG export infrastructure, to mitigate such shortages. US LNG exports to Europe tripled and they would take more if available to them. If we do not displace Russian NG supplies in the world market someone else will or it gives Russia additional black-market opportunities. It will push China and Russia closer together. The laws of supply and demand and a global free market were in process of responding to these market forces as it should until…interrupted by US government intervention through regulation, with a pause in issuing permits to build said LNG export infrastructure. To build an LNG export facility the company needs permits from the US government to export the stuff. They have to have commitments from NG buyers approved by the Feds. If the buyers are from a country that has a free-trade agreement with the US, approval was almost automatic. There are currently 7 LNG export facilities operating in the US with 5 more under construction. These plants should all become operational but where will the next wave of plants that still need permit approvals come from? There are other LNG projects nearing readiness to begin construction ...
    » Continue Reading
  • 03/19/2024 Host of Uncertainties on Acreage, Weather and Geopolitics Net Stalemate between Bulls and Bears for Now
    On the Grains Grain markets are steady-to-mixed in overnight trade. Uncertainty over the acreage swings we'll see between corn and soybeans and how they vary from those put out in USDA's Outlook Forum last month has both bulls and bears in a bit of stalemate awaiting the next hints from private surveys that have been underway.   The Allendale survey projecting more corn acres and fewer bean acres than USDA's Forum numbers has been dialed in. Market impact was somewhat muted by the reality of continued strong corn export inspections and firm cash basis while the support for soybeans offset by the reality of soft exports amidst surging shipments and price advantage out of South America. Now the SBO rally is looking toppy as Malaysian palm oil production starts rising seasonally about now.   Wheat remains under constant pressure from fierce export price competition and improving winter wheat condition ratings, but expanding attacks by Russia on Ukraine's port of Odesa while Ukraine's successful attacks on Russian oil facilities and naval operations even include a threat to Russia's own Black Sea grain ports. Further, Russia's wheat prices actually moved higher last week for the first time since January and this latest cold snap in the Plains puts continued improvement in wheat ratings in question.  
    » Continue Reading
  • 03/18/24 Is a Lion Still Coming?
    The month of March weather came in like the nicest cutest little lamb we have ever enjoyed. The adage is that when that happens the month's weather usually goes out like a lion. I doubt that winter is over but the winter in its nastiest form should be. Our ground frost is gone, many fields have been worked that farmers would prefer a little frost returns temporarily. Whatever form of moisture we get, even if snow, should soak in unimpeded and be welcomed. If the lion brings moisture, then rather than something that would prolong winter, it would be a good thing. I was down to Des Moines and back late last week again and there are many fields prepared that are ready to plant. They will likely only wait until the crop insurance authorized date of April 10th to roll around. It is rather difficult to see right now where planting delays in the primary Corn Belt would come from. The central plains are under a rain shadow cast by the Rockies, the ECB is better watered than the WCB, soil moisture reserves are much less than desired, rain systems are rolling through the delta and mid-south and up the east coast. There is the weather and then there are other influences that will impact what gets planted and when.   I often talk of fringe production areas being more and first sensitive to acreage decisions. I am told that the SE US is hurting with farm failures and nothing grown ...
    » Continue Reading
  • 03/18/2024 Trading Funds Finally Lightening Up Big Short Positions
    On the Grains Grains are mixed in overnight trade. As of 6am corn was mostly steady, beans weak and wheat firmer. Weekend news was mostly in the geopolitical arena. Putin overwhelmingly won another 6-year term as President, which was no surprise when what little opposition he has meet untimely "accidents". Israel has strongly condemned Chuck Schumer's call for a special election to oust Netanyahu and Biden's tacit endorsement of the speech. The war in Ukraine rages on but Ukraine's remarkable restoration of its Black Sea shipping lane made headlines over the weekend and is detailed below. Over the weekend, Russia stepped up attacks on agricultural facilities in Odessa while Ukraine launched multiple attacks into Russia. Back to our own shores, Trump is doubling down on promises to impose major tariffs on China's exports, including up to 100% tariffs on cars built by Chinese companies in Mexico. He says he doesn't fear or care about Chinese "retaliation", that's an unsettling background for our Ag export prospects. This morning we get weekly export inspections. Bean exports lag the needed pace to hit projections but domestic demand remains very robust as evidenced by a record February crush reported by NOPA Friday that exceeded expectations. On the "funds front", Friday's Commitments of Traders report showed them lightening up on huge net short positions in corn, soybeans, SBO, canola, KC and MGE wheat while adding to net shorts in Chicago wheat and SBM. To close on one bit of brighter news, the worst of restrictions due to drought through the Panama ...
    » Continue Reading
  • 03/17/2024 Sunday Market Preview
    Grains are expected to have a quiet, mostly firmer open as traders look for guidance from crude oil and the outside financial markets. In the Headlines A much anticipated Federal Open Market Committee meeting will be held starting on Tuesday this week, with the central bank chairman set to announce any policy chances on Wednesday afternoon. The futures market is about 98 percent certain that the fed funds rate will not change this month, with investors now pricing in odds of about 55 percent that the Fed's interest rate will drop following the June meeting. Russia is holding a presidential election over the weekend that is all but guaranteed to grant Vladimir Putin another six more years in office. There were reports of attacks attempted by Ukraine as well as various acts of protest by Russians opposing Putin. Russia carried out one of the deadliest attacks in several weeks on Friday, targeting Ukraine's key port city of Odessa. Ukraine's ability to export grain out of the Black Sea remains largely unrestrained amid the ongoing war with Russia, which has contributed to price pressure in the U.S. corn and wheat markets. Large crops and a need for cash to fund the war effort have also combined to keep cheap grain from Russia flowing freely. Export offers from the U.S. are currently indicated near $190 per metric ton for corn versus $175 for corn out of both Russia and Ukraine. U.S. hard red winter wheat is priced near $256 per metric ton compared to $185 for ...
    » Continue Reading
  • 03/15/24 Grain Price Outlook Spit Among Technical, Seasonal, and Cyclical Factors
    Our customers and subscribers ask us every day to predict where prices are headed and lately the answers have seemed to take extra time to explain. It has been more necessary than ever to start any discussion about the price outlook with a clarification about the timeframe, whether it is short-run, intermediate, or long-term. For the grains, my answer about price direction is currently something like "down and then up, and then probably down a little bit again."   In the short-term, technical influences are a primary driver for bearish price action in the grain market. Corn and soybean futures found pushback on the chart this week after rebounding up toward tests of their descending channel tops, while wheat slid lower along the bottom end of its downtrend. For the mid-range outlook, seasonal trends paint a friendlier picture of grain price potential leading up to summer. More weather-related risk premium is usually injected into the market at this time of the year when there is such an intense focus on both how crops in South America are going to finish and on how the new U.S. planting season will start. Seasonal price strength could extend further than normal into the summer this year because of cyclical influences related to it being an election year. If prices are "probably down a little bit again" after that, it is likely because we are starting harvest and have been blessed with reasonably strong crop yields again.   As for the immediate technical view, corn futures faced resistance ...
    » Continue Reading
  • 03/15/24 Geopolitical Risks Rise With Reports Houthis Have Hypersonic Missiles.
    On the Grains Grains are mixed again in overnight trade. As of 6am corn was mostly steady, soybeans weaker and wheat prices firmer. The International Grains Council (IGC) is first out of the chute with 2024-25 projections and they see record total grain and oilseeds production in the cards. They also see higher global ending stocks for corn and beans, but not for wheat. USDA won't put out its own first global balance sheets until May. (IGC also revised their global forecasts for the current crop year and see lower corn and soybean crops and higher global consumption for total grains than USDA. We've detailed all those in the "Other Ag Headlines" section below.)   The Climate Prediction Center updated its Drought Monitor yesterday and the map shows drought conditions stubbornly persist over quite a large area of the western Corn Belt and Plains states. NE Iowa jumps out in bright red as the epicenter of the worst conditions.   Some areas saw a little shrinkage in the "footprint" and intensity of drought, but drought actually expanded enough in MN, IA and MO for a net gain in major crop areas still experiencing drought. For corn it's back up to 36% and for beans back up to 33%. Winter wheat under drought is still only 14%, but spring wheat under drought has risen to 30%.   Wheat remains mostly under siege from relentless price-cutting by Russia and Chinese import cancellations; not only from us but from Australia as well. What's easy to forget is that it's not that ...
    » Continue Reading
  • 03/14/24 Wednesdays China Report Requires a Conclusion – The Warning
    Chinese officials implement policy but have no say in what the policy is, tasked with only implementing it. They all know what they are supposed to do and the picture they are supposed to maintain both internally and internationally of domestic tranquility and strength. All power and policy in China derive from Xi Jinping, said to be the most powerful tyrant in existence challenging historical comparisons. He used to have a small number of his former classmates and colleagues that shared some responsibility with him but most if not all such subordinates have literally disappeared. The annual Communist Party Congress has become fully "pretense without substance." The members perform to script. They used to have a press conference afterwards and this year they did away with that too. It was Kabuki Theater anyway so no one has really missed it. Their problem is that the story they are selling at the annual gathering and from ministries every day in China no longer reflects reality. The Chinese economy is no longer growing as it was nor are the people getting richer. It has gotten late in the economic cycle and the energy has been spent. Kind of like Goebbels spinning NAZI party propaganda in 1945 being much harder than in 1941. Officials all do what they are told and if it doesn't work, they are punished for it.   Global Investment is now leaving China. In order to maintain the façade that their economy is still strong and their economic order is healthy ...
    » Continue Reading
  • 03/14/24 Early Spring and Warming Soils Promise Rapid Planting Once it Starts
    UPDATED WHEAT RECCO DAY 1: Based on prior advice, SRW producers are 80% sold on '23 crop and 15% hedged on '24 crop. However, pending targets for HRW and HRS producers to advance '23 sales beyond 50% in increments were never hit. With only 10 weeks left in the marketing year, HRW and HRS producers should take advantage of what's left of the recent rally and sell another 15% from the bin now to get 65% sold. (Regardless of class, plan to be sold out no later than June 1.)   On the Grains Grains are mixed in overnight trade as of 6am corn was steady, beans firm, but wheat lower. Further strength in crude oil tied to an unexpected drop in U.S. crude oil stocks and stepped-up Ukrainian attacks on Russian oil refineries has helped push SBO above February highs and poised to take out January highs as well.   Beans may also be getting support from yesterday's release of a private firm's survey results putting bean acreage 1.7 million acres lower than USDA's Ag Forum estimate, though that would still be up 2.2 million from last year. The early spring and rapidly warming soils promise rapid planting that often results in more corn and sure enough, that same private survey pegs corn acreage 2.47 million acres higher than the Ag Forum estimate, but still down 1.17 million acres from last year.)   As for South America, abundant rains in Argentina insure a strong finish to that crop while debate rages over why USDA is totally ...
    » Continue Reading
  • 03/13/24 Lesson on China
    One is Most Vulnerable When at the Pinnacle of Great Success China's economy has been a juggernaut of growth for so long and had gotten so strong that many had come to believe that their state version of a managed economy had become immune to capitalist economic cycles and that the party could go on forever. Unfortunately, the delusion of forever eventually exhausts itself and what was always the reality, that delusion has an expiration date and is manifesting itself at the present in China. China's economic growth was the product of demographics and state manipulation. It was the greatest manifestation of state sponsored marination of economic manipulation in modern history. It has inflated into an unparalleled unprecedented economic bubble. The CCP state sponsored manipulation appeared to be so successful that Chinese techno-bureaucrats temporarily fooled the world into believing that they were invulnerable to the rules that the rest of the world economic managers are forced to adhere to. The CCP has many advantages as it controls all of the institutions of the Chinese state. They have all of the means necessary at their disposal to perpetuate an illusion long after it has become apparent to many in the world that their emperor is no longer clothed. They have produced an unprecedented bubble. China passed believability several years ago and has since become increasingly vulnerable to outside influences that the techno-bureaucrats no longer have the resources to buffer let along produce more magic. DJT called their bluff during his firm term ...
    » Continue Reading
  • 03/13/2024 Outlook for 2024 Still Cloudy, But Market Bears Less Cocky
    On the Grains Grains are mixed in very low volume overnight trade as of 6 AM. Soybeans are weakest, with no follow through buying following yesterday's pop higher on Brazil's CONAB coming out with much lower crop estimates than USDA for both beans and corn. They're likely to go lower still and we explain why in this week's Brazilian operations update below. It's noteworthy that national average soybean basis gained another penny despite the jump in futures showing remaining beans in tight hands as fieldwork begins. In other news, Ukraine's Grain Traders Union says the combination of low prices, high costs amidst ongoing war will likely cut that country's total grain and oilseed production by 6.5 MMT in 2024. That's only about 8% and considerably more optimistic than last month's warning by Ukraine's Ag Ministry that production would likely fall 15% or more. Even that much decline will have an amplified impact on Ukraine's exports, however. The Union predicts corn exports will decline more than 6 million tonnes (over 20%) and wheat exports by 2 MMT (10%). Wheat has attempted to rally multiple times but keeps getting pushed back down by relentless selling by Russia at whatever discount it takes to maintain market share. Weekly updates on U.S. wheat condition won't commence until April, but we got new estimates from state offices in TX, KS and OK this week that showed further improvement. In TX, 44% rates good/excellent compared to 17% last year, in OK 65% rates G/E compared to 30% last year, ...
    » Continue Reading

Sign Up For The Commstock Report

Sign Up Now to Improve Your Marketing and Protect Your Profits

Subscribe

Already a Subscriber?
Sign In