CommStock Reports

There is not a neighboring European or country in Asia which has had any interaction with Russia and Russians in their long histories which has not come to regret ever trusting their motives, intentions or words. Russians are about as close today to being the ruthless Vikings of old as exists. They will lie, cheat, steal, kill without aversion to getting whatever their want of the moment turns out to be. What they want is whatever others have that is convenient for them to take. Fins, Poles, Latvians, Georgians, or Ukrainians harbor no illusions over who and what Russians are. They are carrying forth a legacy of empire in which they see themselves as the high caste and the rest of the world their vassals. There is no such thing as an agreement, treaty, armistice or détente that is anything more than a chess move to allow Russia to seek out the next weakness in opponents to exploit. To Russians everyone is an opponent, every breath is taken toward conquest. The collapse of the Soviet Union represented the limits of extension of Russian hegemony in Eastern Europe. The Russian Federation under Putin is an attempt at a secondary rally in a bear market that will again give way to a resumption of what is the major trend of Russian political and economic implosion. The more realization of their impending demise, the more desperation they will display. The more dangerous they will become.   Putin's war on Ukraine has exposed Russian weakness. The ...

NEW WHEAT RECCOS DAY 1: On prior advice SRW producers are 80% sold on '23 wheat and 15% hedged on '24 wheat. HRW and HRS producers are 65% sold on '23 wheat and nothing sold on new crop. SRW and HRS producers are advised to use this rally to sell all remaining old crop, while HRW producers are advised to sell another 20% (to get to 85% sold) but hang on to the last 15% to squeeze a little more out of this rally with HRW crop ratings declining. On the Grains Grains are firm in overnight trade as of 6am, with wheat the clear leader as it was yesterday before traders had even seen the big hit to HRW wheat ratings released after the close (more on that later). As for weekly export inspections, corn was the only big winner. At 1.624 million tonnes it easily beat the top end of expectations at 1.5 million. Beans and wheat were within the range, but towards the lower end. After the close, we got the weekly Crop Progress Report. It showed corn planting at 12%. That met expectations, was on par with last year and 2 points ahead of average. On a state by state basis, Missouri leads the Midwestern states at 47% planted, more than double its average of only 21% at this point. Iowa at 13% is also well ahead of its average 8% at this point. (Michigan and Wisconsin are the laggards at 1% and 2% respectively.) Soybean planting came in at 8%, a point ...

Typically, most watch the US drought monitor but NOAA releases a North American version every two weeks. One can see that while drought has been completely mitigated in the Western US there are still lingering patches of drought in the Heartland. The drought has not been mitigated in Canada while the severe concentrated drought still covers Mexico with no sign of relenting. Where we live in Northwest IA the drought here is gone. Our soil moisture reserves have been fully recharged by late fall, winter and now spring rains so that we are starting the season out with a full tank of subsoil moisture. We got nearly 2 inches of rain last week and for the first time we had excess water standing in fields. More rain is forecast this week so planting will not be as super-early as thought. Additional rain now could actually delay planting and be a negative thing. There are other regions such as in the ECB or Delta where too much rain is a problem. Then there is still Kansas that can be counted upon for drought.   The primary characteristic of the climate setup for 2024 is the transition from El Nino to La Nina. This is a transition year. While there are a number of years where such an ENSO transition has taken place, no one year is identical to another. The speed and depth of the transition should have a very important impact on our summer weather in the corn-belt. If the crops get ...

On the Grains Grains were mixed in overnight trade with corn and beans on the soft side but wheat prices firming as of 6am. Weekend news was dominated by both events and non-events in both DC and the geopolitical arena: The major event was House passage of $95 billion in 3 separate aid packages for Ukraine, Israel and Taiwan. It's likely to clear the Senate easily but it happened only through Dem support that offset GOP opposition because the bills lacked any funding for U.S. border control and have Speaker Mike Johnson still facing criticism within the party. The major non-events making news are seemingly lessened risks of widening regional war with few signs either Israel or Iran want to trade blows again for reasons discussed below. That has oil prices quiet along with ideas OPEC+ has enough unused capacity to mitigate disruption of Iranian supplies. The Commitments of Traders report out after markets closed was somber news for those of us hoping this market will need to build in some weather risk and perhaps trigger more short covering by funds. It showed that through last Tuesday, those funds had actually been adding to already-large net short positions in all the grains except MGE wheat. They'd also been dramatically unwinding spreads by selling off oil and buying back meal. Now attention shifts back to planting progress and wheat ratings that come out with the weekly Crop Progress Report after markets close. Wheat is firmer overnight on the reality that it's been dry in ...

Follow-through interest will be tested after the grains posted a firm close on Friday. The overall tone of the grain trade is likely to largely depend on which directions oil and the dollar index are heading. In the Headlines A strong close on Friday limited the weekly loss for May corn futures to 2 cents. May beans were down 23 1/2 cents last week. May Chicago wheat was down 5 3/4 cents while May Kansas City wheat dropped 8 1/4. April cattle were up $2.57 and April feeders gained $3.72. June hogs were up $2.75 for the week. The House of Representatives voted on Saturday to pass a spending package worth $95.5 billion that includes $61 billion for Ukraine, $26.4 billion for Israel, and $8.1 billion "to counter China's actions in the Indo-Pacific" (protection for Taiwan). As the federal government is taking on new debt at relatively higher interest rates, the total cost of servicing the deficit amounts to 36 percent of annual tax receipts – the highest level in 27 years. Interest costs could increase by almost another 50 percent by the end of the year if the central bank does not reduce rates. The Environmental Protection Agency issued a waiver to a allow sales of E-15 ethanol blends this summer, the third consecutive year granting the allowance. The ethanol industry is joined by certain lawmakers across the Midwest in continuing to lobby for the permanent acceptance of higher blends. It was a slight negative influence for the market earlier last week that the ...

Grain basis levels have taken on a heightened level of variability this year, showcasing a notable disparity between the country's western and eastern regions. While corn basis remains notably stronger in the West, soybean basis displays relative strength in the East. These discrepancies cannot be solely attributed to supply differentials, given the robust crops witnessed on both sides of the Mississippi River last season. Instead, the driving forces behind the basis differences lie within the dynamics of demand. In the West, firm corn basis is supported by robust ethanol usage, elevated export demand from the Pacific Northwest, and stiff competition within the rail market that draws corn into the Southwest. In the East, soybean basis is bolstered in large part by a wide network of processors that serve a consistent draw from the southeastern poultry sector.   Differences between Illinois and Iowa show the nature of basis being split by region. Country elevators across much of Iowa are posting corn bids against basis that is relatively strong for this point of the season, with a statewide average of 2 cents over the May futures price. At 24 cents under the board, Corn basis in Illinois is closer to its modern historical average. Soybean basis values are flipped by relative strength, with Iowa weaker at 48 cents under against Illinois averaging 22 under. Weaker corn basis in Illinois and the rest of the Eastern Corn Belt may be primarily attributed to soft river market demand that follows from Chinese purchases being down significantly this ...

On the Grains Grains are all still firm in overnight trade as of 6am, but well off overnight highs on word that Israel had attacked some sites in Iran in promised retribution for the weekend barrage. Oil and wheat prices initially spiked much higher but have since given most of the gains back. Why? Because despite promising they would counter even the slightest attack on their territory with a devastating second-wave, Tehran instead declared that the Israeli attack had "failed" (just as theirs had). It's an unfolding drama that could change again by the time you read this. Supportive news for corn comes from continued cuts in Argentina's corn outlook from both the Buenos Aires Grain Exchange and the U.S. Ag attache down there. It also appears EPA will agree today to "temporarily waive" summer restrictions on E15 sales through September 15 after repeated pleas from several senators to do so in light of ongoing energy security risks stemming from war in the Middle East and Ukraine. The most important news this morning is a host of updates on the long-term weather outlook released yesterday by the Climate Prediction Center. The new forecast for May through July calls for above-normal temperatures across all of the contiguous U.S. aside from a bubble of “equal chances” over the Northwestern Corn Belt/Northern Plains. As for precipitation, most of the country can expected "average" rainfall with the exception of the southeastern quadrant where it should be above normal through July. More interesting was the updated outlook for June ...

Your You/Tube analog gets to know you and tracks podcasts that it thinks that you should see. My chosen one was by David Woo who has been a Wall Street executive and major bank official who now has his own forecasting/investment firm. He lives in Israel and noted that 90% of Israeli's supported finishing Hamas no matter what it took or the geopolitical risk with Iran that it created. They are immersed in the eye for an eye thing and cannot be told when it is time to quit. There is real acrimony and then there are the optics of animosity there. Failure to hit back when attacked leaves the appearance of weakness. Iran's recent drone/missile attack on Israel was in response to one from Israel and was carefully crafted to fit both real acrimony and the optics of animosity necessary in the intended absence of harm and damage that resulted. It was an attack that Iran knew that Israel would thwart. The Saudis, Emirates, and even Jordan assisted in Israel's defense. Israel vowed to respond. Iran said it was 'one and done' but it was not. It immediately began re-supplying missiles to its proxies in preparation for the next attack. No one is willing to get off as the train of reprisals accelerates testing the track. The White House is understandably on edge as to what impact on oil prices that escalation could have. Americans appear super-hyper attuned to the price at the gas pump more than to who ...

On the Grains Grains are mixed yet again in overnight trade, with corn and beans steady to weak but wheat slightly firmer. EIA data out yesterday showed a big drop in weekly ethanol production to a 12-week low and well beyond expectations with stocks declining only marginally. On the brighter side, they also showed gasoline stocks falling more than expected implying stronger demand. This morning we get weekly export sales at 7:30, which could set the tone for early trade. Here are the ranges of expectations: Corn, 300,000 to 900,000 tonnes, Soybeans 300K to 650K, Wheat negative 100K (due to net cancellations) to 200K. Sometime today, the Climate Prediction Center will issue its latest 3-month outlook for May-July and that will give the trade the next reading on yield risks in this growing season. Beyond that, speculation is already beginning on what the May WASDE will show for USDA's first look at the 2024-25 season balance sheets. Then there's the geopolitical uncertainty in the Middle East that has the world on pins and needles. Israel insists it will have to retaliate for the weekend attack while Iran blusters that if there's any encroachment whatsoever onto Iranian assets or territory, they will utterly destroy Israel. The relative quiet we're seeing in the markets is not so much a situation where the price outlook is "stable" as much as situation where events have bulls and bears at a nervous "stalemate". How the big trading funds react is the biggest wild card of all. On the Hogs: Futures closed ...

Brazil's soybean harvest pace is beginning to slow as it nears its conclusion.  We expect Brazil's harvest to reach 90% this week but it may take another month yet to wrap things up completely.  CONAB made a minor adjustment lower to their April soybean production despite finding an additional 140,000 acres by cutting yield a quarter bushel per acre to 48 bpa overall.  This places overall estimates at 146.5 MMT for CONAB while the USDA didn't budge from their March report.  Traders are putting more emphasis on the USDA, pointing out their superior satellite and NDVI technology.   I pointed that out to one trader in Brazil that the USDA has been more accurate in recent years to which he replied, "this time they are wrong."   Even if CONAB and the USDA split the difference, that is still 150+ million bushels removed from Brazil's export supply.   Brazil's exports are the canary in the coal mine.  They are the first to go when there is a lack of supply.  One red flag is that Brazil's soybean exports were down for the month of March compared to last year by 6%.  This would be unusual for the middle of their peak export window if they are supposed to have such a large crop.  March 24 corn exports are off 65% compared to March 23 corn exports.  (And yet the USDA still maintains Brazil's corn production from last season 5 MMT higher than CONAB).  Basis levels are also increasing, with cash prices rebounding 15% from ...

On the Grains Grains are mixed again in overnight trade. There's still no sign of any weather issues with planting, so there is no need to build in any "weather premium" in the minds of traders. That could change tomorrow when the Climate Prediction Center updates its 3-month outlook for May-July. Globally speaking, the only glimmer of supportive news are slightly lower production forecasts for both Ukraine and Russia and ongoing conviction that USDA's estimates for South American soybean and corn crops will inevitably be coming down to more in line with their own estimates down there. Shorter-term, geopolitics and even US politics for that matter are powder kegs of uncertainty that have the U.S. dollar at the highest levels since last fall. The Iranian attack on Israel was a sea change in Tehran's strategy, no longer content to rely on its proxies in the region. For its part, Israel will only say it's going to "respond" and when it does, Tehran says it will strike again. The powder keg in U.S. politics are renewed calls for House Speaker Johnson to resign as he struggles to get support for separate bills to fund new aid for Ukraine, Israel, and Taiwan. It's time for another look at the "big picture" (the monthly charts) for corn and soybeans to get their bearings on "where to from here?" On the corn, we're in a base building zone with $4 the key support and deeply oversold since mid-'23. In soybeans it's a similar situation. The monthly chart has ...

I have long held the opinion after decades of watching USDA statistical performance that they are biased toward commercials over the interests of farmers in their processes. They seem to keep shortages a secret and understate demand until commercials have stolen grain from farmers before they admit that stock tightness existed. There was an instance that USDA did not get production right until forced to adjust stocks in the following year's quarterly September stocks report, the last possible opportunity for them to do so. Farmers are forced by cash flow and high storage carrying costs to move their grain before USDA gets around to releasing information that benefits prices. When commercials own the grain then prices can go up. Markets go up on USDA data after farmers have sold. Farmers still own too much of last year's corn crop which is one of the factors holding prices down. There are lots of instances but I believe that 1993 was one of the worst when that crop disaster was kept secret until their January report. That example was just one of many. I have learned to adopt this into my analysis accommodating for USDA process bias. CBOT price discovery accommodates the USDA bias. The CBOT doesn't respond until USDA confirms it needs to. It is ingrained in how they reflect conditions into their statistics and the lag that exists between reality and USDA baseline forecasts is unlikely to be changed.   CONAB, Brazil's USDA, has a reputation of favoring the farmers interests over ...

On the Grains Grains are steady to mixed in overnight trade. Weekly export inspections were within the range of expectations for both corn and soybeans yesterday and wheat actually came in above the high end of the range, but all to no avail with lower prices for all three. Hopes that stubborn inflation data might help convince funds to start lifting short positions more methodically bore no fruit yesterday. To the contrary, funds were again big contributors to the selling in corn, wheat, soybeans, and soy products yesterday. The weekly Crop Progress Report put corn planting at 6%, a bit less than 7% expected at last year's pace, but still a bit better than 5% average. They started reporting soybean planting this week and put it at 3% complete, the same as last year and the average and a point better than the 2% expected. Spring wheat planting is at 7%, just as expected, a point better than average and several points ahead of last year at only 2%. Winter wheat was rated at 55% good to excellent overall, down a point from last week but still the best in four years. Last year at this time, only 27% was rated G/E. The portion rated poor to very poor picked up a point, to 13%, but that's still well below last year when 39% rated P/VP. It's noteworthy, that HRW ratings actually slipped enough to pull overall winter wheat ratings down a bit even though ratings for SRW states actually improved to the best ...

Mankind continues to evolve except where it doesn't. The Mid-East human development continues to be stuck, held in place by the tenants of its past. There are 3 tenants which characterize the entwined cultures of the nations of the region that define it. The first is the old school "eye for an eye" "tooth for a tooth" concept of human relationships there. No slight can be forgiven or wound not returned in a circle of perpetual violence. Failure to attack one's attackers is seen as weakness and dishonorable. Vengeance is a way of life. The next tenant of the region is the geographical intertwinement of peoples who are sworn enemies. The West Bank looks like a cancer that has metastasized to where it has entwined enemies which cannot escape each other. They cannot live together but a two-state solution cannot be carved from the topography that the combatants find acceptable. The third tenant of their cultures is its legacy. They have patience for vengeance. A slight or attack against one generation may not be returned until generations later but they do not forget nor do they forgive. The animosity between these cultures goes back centuries…in fact millennia. This is 2024 A.D. and it was Jesus Christ who challenged the existing culture with "turn the other cheek" …a heretical concept then and still now. In the Mid-East, there is rage apparent in present actions but always festering under the surface looking for opportunities to exploit the weakness of their enemies.   "On October ...

On the Grains Grains are modestly lower in overnight trade as macro-economic and geopolitical tensions are twin fountains of uncertainty to start the week. Grains managed to close higher Friday despite another massive slide in the stock market tied to resurgent inflation worries and sagging hopes of interest rate relief. The June contract for the DJIA broke through important support at 38,400 in place since last December. It's also now oversold and further downside will hopefully be limited to completion of a 62% retracement of the entire move up from December lows to the double top at about 40,300. Then over the weekend, the world witnessed Iran's blatant escalation of Mideast conflict by launching hundreds of drones, ballistic missiles and about 30 cruise missiles towards Israel. Nearly all were intercepted and destroyed by combined forces of Israel, the U.S., the UK, France and even Jordanian air support before they entered Israeli airspace. The UN Security Council met in emergency session Sunday to urge both sides to stand down. There was fear oil prices could soar if this raised odds of assault on Iran's oil export capacities, but so far, that hasn't happened. The attack was widely telegraphed and oil prices are actually a little softer in overnight trade. The U.S. dollar was already on an upward trajectory on the resurgent inflation fears and the Iranian pyrotechnics only added the "flight-to-safety" element to boot. So now that's a source of pressure for the export outlook while the inflation driver could be seeping back in ...

Grains have support to follow through on a firm close from Friday. Traders will again be looking for guidance from oil and the outside financial markets. In the Headlines May corn futures gained 1 1/4 cents last week, with nearby beans down 11. May Chicago wheat was down 11 1/4 cents while May Kansas City wheat gained 7 1/2. April cattle was up 65 cents and May feeders fell by $3.97. April hogs were up $1.55 for the week. Iran launched missile attacks on Israel over the weekend in response to Israel's recent strike on the Iranian consulate in Syria. The Israeli military reportedly intercepted 99 percent of the missile offensive. Iranian officials indicated that there would be no further operations, which may be a point of relief for the market. Oil futures traded up to a six-month high in anticipation of the conflict, with the nearby WTI crude contract finishing the week at $85.45. Kansas City wheat futures were seen briefly taking on a leadership role last week as doubts crept in about conditions for hard red wheat in the Southern Plains. Drought was expanding again throughout the region after some of the crop had recently been threatened with winterkill. It was additionally supportive that wheat prices were rising in major markets including Russia and France. Russian authorities were showing an attempt to control the wheat trade to a larger degree while also targeting Ukraine's shipping assets. April hog futures held strong ahead of their Friday expiration, but June hogs broke sharply to suggest ...

"China's economy is a juggernaut that defies the laws of economics by becoming an evolutionary new species of capitalism deftly managed by Xi Jinping." The Chinese economic performance over the past few decades has caused many to accept that narrative. I believe that the more likely scenario is that China is a fraud…something more akin to being a Ponzi scheme. It may well be the greatest fraud ever perpetrated on the planet, the risk of that being the sobering potential calamity that will result when the Chinese economy implodes. A Ponzi scheme is when someone cooks the books to show profits/growth that attracts new investment and absorbs leverage to keep the wheels spinning higher and higher above the ground. When it stops there is not a copasetic outcome. The bigger they are the harder they fall and the Chinese economy is poised to drop from never before inflated heights of hubris.   As the need for positive Chinese economic data becomes more important to sustaining their illusion, the less transparent that it has become or will be. There is always good and bad economic news and China is skewing the relationship by ending the release of bad news to cloak damaging truths. They do not even tell Xi Jinping bad news anymore, fearing his reaction, let alone make it public. They have lashed out at companies who provide due diligence research services in China, fining them and jailing executives to clamp down on transparency. They have stopped releasing reliable economic data and ...

On the Grains Grains are mixed in overnight trade thus far. Yesterday's WASDE has been sliced, diced and critiqued thoroughly for being almost stunningly conservative in changes to balance sheets that produced higher than expected ending stocks in U.S. and global balance sheets, particularly in soybeans. Particularly disappointing were the modest 25 million bu. increases in corn usage for feed and for ethanol. It puts feed usage up only 214 million bu. for the year when the March stocks report alone suggested feed usage already up 300 million bu. for the year. The stingy increase for ethanol puts usage for the second half of the year only 58 million bu. higher than last year when first half usage has already been up 166 million from last year. They also inexplicably left soybean crush unchanged from last month despite crush data suggesting it should have been raised to help offset their cut in exports. Yet by end of day, board losses were relatively modest despite USDA's conservatism, as if that "conservatism" itself had already been dialed in to some extent. Attention now shifts back to planting progress, crop condition ratings and the growing season outlook. We should see the planting pace pick up sharply now that earliest planting dates for crop insurance have been reached over most of the Corn Belt. NOAA updated its Drought Monitor yesterday and it still shows 23% of corn country still in some degree of drought status, 22% of soybeans, 18% of winter wheat and 26% of spring wheat. Next ...

The morning started off with fresh estimates from Brazil's CONAB agency that served as benchmark levels to compare with the USDA report. Traders seemed to still be skeptical of the USDA doing much to close the gap, since corn and soybean futures largely shrugged off what looked to be bullish numbers from CONAB. In the end, it was right not to count on the USDA coming down to earth on its Brazilian estimates, seeing as the government analysts came in well above the average trade estimates because they did not change the numbers at all.   Some analysts argue that CONAB is holding too low on its Brazilian acreage estimates, but that does not seem to account for entire discrepancy against the USDA's figures for Brazilian soybean production. The difference between the USDA and CONAB is now over 300 million bushels for this year's soybean crop while the USDA will still higher than CONAB on last year's soybean crop by almost 275 million bushels. The distance between estimates for Brazil's corn crops from both this year and last year has USDA on the high side by nearly 650 million bushels.   Even with all of the anticipation that had been built up for the Brazilian numbers, most traders were likely to have given their first glance to the U.S. balance sheets near the top of the report. U.S. corn demand was raised by 50 million bushels to reduce the carryout by the same amount. Feed and residual usage went up along with the ethanol ...

On the Grains Grains are mixed in overnight trade, a few cents either side of unchanged. The DJIA is down further after yesterday's big plunge after the March CPI data. It came in higher than expected for the fourth straight month. Back in December, pundits were suggesting up to 6 rate cuts for 2024, then pared to 3 in January and just 2 last month. Yesterday's news has some pundits now doubting any cuts at all and some thinking there might be another increase in store before yearend instead. That kind of thinking caused a spike in the US Dollar Index that wiped out the slide we'd seen so far this month and made a new high for the year and a gut punch for export prospects. At 7:30, we get weekly export sales, which could set the tone for grains ahead of the 11 am release of the WASDE numbers. Here are the ranges of expectations: Corn 750K to 1.3 MMT, Soybeans 200-600K, and Wheat -100K (due to net cancellations) to 250K. The key WASDE metrics are changes in U.S. ending stocks and the trade is looking for modest cuts for corn and soybeans, and a slight increase for wheat compared to last month. They're looking for only a 70 million bu. decline for corn, which seems modest, accounting only for the lower-than-expected Mar. 1 stocks and no allowance for what we see as a good chance for a hike in feed use and corn use for ethanol as well. Another set of ...

Brazil's soybean harvest pace is beginning to slow as it nears its conclusion.  We expect over 85% will be harvested by the end of the week.  Most of the Center West region has wrapped up the harvest along with Parana.  The MAPITOBA region is roughly 75% complete.  RGDS is the main laggard with only 25% complete but yields there are reportedly doing very well overall.  The April WASDE report will be out Thursday morning and yet again much attention will be focused on the size of Brazil's crops.  In the case of soybeans, the trade expects the USDA to make cuts at or below 152 MMT.  We believe this cut is warranted but whether the USDA will make good on that is a different matter.   In the case of Brazil's corn crop, the trade is looking for a cut below 122 MMT compared to 124 MMT last month.  Again, we feel this reduction is justified as farmers had very little financial incentive to plant safrinha corn.  While growing conditions have been conducive to reaching trendline yields that will not be enough to reach the USDA estimates for corn.  Much attention will be focused on how many acres they actually planted to second crop corn as even with a good yield, low commodity prices combined with high input costs put farmers underwater.  It appears the primary gap between USDA and CONAB estimates is that CONAB sees lower acres planted and the USDA does not.   CONAB expects an 8% drop representing 3.6 million acres ...

On the Grains Grain prices are mostly firmer in overnight trade. There is little to chew on from the fundamental side until traders see tomorrow's April WASDE update and the extent and direction of changes in ending stocks forecasts. Until then we're seeing more and more commentary confirming Ag traders taking note from outside markets like gold and the likelihood Consumer Price Index (CPI) numbers due later today will show prices increased by 3.4% in March, up from 3.2% in February. The Producer Price Index (PPI) will be out tomorrow and that's expected to show an annualized increase of 2.2% for March, up from 1.6% in February. Further re-stoking inflation worries, the Energy Information Administration (EIA) just raised its average price estimate for Brent crude this year to $89 a barrel from $87 previously. Reasons? "Expectation of strong global oil inventory draws and ongoing geopolitical risks." EIA specifically cites Middle East tensions and attacks on shipping in the Red Sea in combination with OPEC+ extending output cuts into the seasonal increase in demand for summer driving. Speaking of gasoline demand, all is not well on that front long-term. NCGA is sounding the alarm on the impact EPA's new tailpipe emissions standards could have on gasoline and ethanol use. The ruling dictates that sales of non-electric vehicles will drop from over 92% of new vehicle sales in 2023 to under 30% of new vehicle sales in 2032. That translates to a 6.9-billion-gallon reduction in motor gasoline use in 2032, a 5.7% decline from the baseline ...

Interest rates are the cost of capital. Is the cost of capital going to rise or fall? Everyone looks to the Fed for the answer to that question but the Fed essentially responds to underlying fundamentals rather than makes them up. They can temporarily directionally impact capital markets but they will eventually come back to whatever trendline that is fundamentally supported. The Fed is looking for an opportunity to reduce rates but that is against the backdrop of changing demographics. How did interest rates and the cost of capital get so cheap this decade before it has now gone up? The answer is that as of 2023, 51.3% of the wealth in the US was held by baby boomers…$78.1 trillion. 70% of the economy was being driven globally by the wealth of the baby boomer generation. That is why when in the throes of the Covid pandemic that interest rates could fall to as near to zero as they did. This generation hit the sweet spot of their earnings potential as we entered this century generating an unprecedented pool of capital but this will fade with their further aging. “Some $53 trillion will be passed down from boomers to their Gen X, millennial and Gen Z heirs, as well as to charities. That includes both gifts during their lifetimes and inheritances afterward. The bulk of the trillions will go from one group of already wealthy people to another. They estimated that 68% of the wealth transferred between 2020 and 2045 will ...

On the Grains Grains are soft in overnight trade thus far with no signs of any issues in yesterday's weekly planting progress update. Weekly export inspections were actually pretty good yesterday. Corn loadings came in above the high end of expectations, wheat loadings right at the high end and soybean loadings midway in the range. Between stronger than expected jobs growth data and Fed remarks about toning down expectations for rate cuts by year end to two instead of three. These factors have some pessimistic pundit's even suggesting there is potential for further hikes if the decline for inflation rates should end and start creeping up instead and that's rattling the stock markets. The weekend news about SAF qualifications for corn are not being released until mid-May was actually a bit better than expected for some in one sense. They note that originally, it was feared to meet specs to qualify for use in SAF production, farmers would have to comply with all three requirements of "efficient" tillage, "efficient" fertilization practices as well as employing cover crops. Now it appears any one of those practices may be acceptable and if so, the requirements may be less onerous than feared when finally released. The weekly Crop Progress report showed corn planting at 3% vs. 2% last week, 4% expected 3% last year and 2% average. Spring wheat planting was also 3% complete, average for this date, right at expectations and comparing to 1% last week and 1% last year. Planting progress for all other major ...

The above map shows the spring average last frost dates for regions of the country. First and last frost dates have been extending the growing season for much of the country. One could say that spring is coming sooner but this year was unprecedented for us to have had a dose of spring in early March. Farm publications all have stories on cover crops as they have become the new thing. They are not very applicable to the NCB starting at the Iowa/MN border as there is little time for them to develop before row crops go in. Our crop insurance date for corn is April 10th and for soybeans April 15th. Farmers like to get both crops planted in April if conditions allow. Note that in NW IA where we are, planting soybeans in April is challenging the final frost date. Farmers bumped up the soybean planting date from what it used to be generationally by as much as a month resulting in improved yields. Cover crops just get in the way of early planting. They are still being tried because of carbon credits. A farmer shared his experience at a recent carbon conference. I understand carbon scoring and the value in it. However, upon seeing his yield data, I am not convinced that the cover crops did not cost him as I was unimpressed by his yields. They can be successful depending upon the region. They have not been successful here in NW IA but this year will ...