CommStock Reports

'22-CROP CORN RECCO UPDATE: Last May we had you price the first 15% of '22 corn with December futures at $7.26. In mid-August we had you buy it back in Dec. '23 futures at $5.83. With '22 crop cash sales completed in early January, it's time to close the books on '22-crop completely. Exit that long position in Dec. '23 corn this morning. NEW RECCO FOR '23 CORN DAY 1: As our first move on '23 crop, we advise selling $6.30 Dec. call options covering 15% of anticipated production if you can get 22 cents or better. NOTE: By way of explanation, this is called "writing a covered call" for producers because even if the trade works against you, your risk is "covered" by the rising value of your growing crop. The tactic can be win-win either way. If eventually exercised by the buyer, you will be assigned a short position in Dec' 23 futures at $6.30 covering 15% of your crop - which is 60 cents better than yesterday's close. If, on the other hand, it ends up expiring worthless to the buyer, then you simply keep the 22 cents credited to your account when you sold the option as a "price enhancement" to whatever you eventually get for that first 15%. On the Grains: Corn managed to work higher yesterday on yet another big sale to China and firming basis at PNW ports hinting they're not done yet. It also got a boost from an uptick in ethanol production and significant drawdown in stocks. ...

According to the USDA, ownership of U.S. farmland by Chinese nationals has increased by an additional 75,000 acres since 2010, totaling 338,000 acres as of 2020. These acres only account for less than one percent of all U.S. agricultural land held by foreign citizens, but Chinese national ownership is quite concerning as it is suspected the Chinese government may be buying up land for military and espionage purposes. Concerns have also been heightened in recent weeks as China floated a spy balloon over our nation and is now getting awfully cozy with Russia.   Last year, Chinese company Fufeng Group purchased 370 acres of farmland in Grand Forks, ND. The company claimed their intentions were to build a $700 million corn mill, and it was just a coincidence the land they purchased was next door to an Air Force Base. Right off the bat, Grand Forks Mayor Brandon Bochenski was in support of this purchase, however once he received a letter from the U.S. Air Force claiming the company's project was a counterintelligence threat, he quickly changed his stance on the matter. The town of Grand Forks went on to deny Fufeng's building permits.   A similar situation occurred in Texas a few years ago when a Chinese billionaire planned to build a wind farm on part of 140,000 acres he put together over five years in the southwest part of the state, near Laughlin Air Force Base. The project quickly sparked national attention and Governor Greg Abbott put a halt to the project ...

NEW WHEAT ADVICE DAY 3: Monday we advised hedging the first 10% of 2023-crop wheat in your respective new crop month at KC, MGE or CBOT when KC July hit $8.49. It did so that very day and the advice stands. You should also now be sold out of '22 crop if not already there. On the Grains: Overnight markets are mixed with corn and beans trading either side of unchanged while wheat prices more clearly on the firm side again. The ambiguity in corn and beans makes sense in light of wide ranges in trader expectations for Friday's Prospective Plantings and also the quarterly Grain Stocks Report both due for release at 11 a.m. that day. (There is also some "ambiguity" developing about South American soybean and corn prospects in light of most recent weather developments detailed in this week's Brazilian Operations Update below.) The continued firmness in wheat, on the other hand, also makes sense. Funds remain heavily short and in the covering mode. Continued dryness in the western half of the central and southern Plains threatens HRW yields and delayed planting likely in spring wheat country with below normal temps slowing snowmelt and fieldwork. On Monday NASS resumes weekly crop condition reports nationally for winter wheat and planting progress as well. Once the markets digest Friday's reports, these weekly crop progress updates and the weather outlook will again take center stage as the markets' key drivers. On the macro-economic front, the news is mixed. The banking jitters seem to be subsiding some. ...

We have covered the Congressional Budget Office (CBO) baseline forecasts" for crop-by-crop balance sheets, ending stocks and average farm prices going out 10 years earlier this year. They came out in February. They are of limited value, of course, because they make the heroic assumption that each of the next 10 years  will have "average" growing seasons, and "trend-line yields" not just in the U.S., but worldwide.   So what's the point? These are the numbers Congress uses as "baseline assumptions" to calculate the impact on acreage and prices of any significant budgetary allocations, changes in program rules, ending some programs, or initiating new ones that might impact grower decisions.  Essentially the baseline numbers are used to say, "all things being equal, here's how this policy addition, change or deletion might impact farmer decision-making." (Of course, "all things" never ARE "equal" but constantly in flux for a host of other reasons, but Congress has to have a basic set of "starting assumptions" to evaluate any proposition offered in farm policy design and implementation.   Today, however, we're addressing how the baseline assumptions are set among the basic components of the new farm bill to be designed this year, regardless of impact on individual commodities. The Iowa Farm Bureau commissioned an in-depth look at the "big picture" of baseline forecasts well worth sharing today.   The 10-year baseline (FY2024-2033) for the Farm Bill is projected to be approximately $140 billion each fiscal year, or $1.4 trillion for the 10-year period. Food assistance programs, such as the Supplemental ...

NEW WHEAT ADVICE DAY 2: Yesterday we advised hedging the first 10% of 2023-crop wheat in your respective new crop month at KC, MGE or CBOT when KC July hit $8.49. It did so yesterday and the advice stands today. NOTE: At that same time, we also advised pricing the final 15% of '22 crop wheat, regardless of class so your '22-crop sales should now be completed. On the Grains: 2-week weather outlook hints delayed spring. There are mixed implications for prices. On the one hand, it favors higher than normal precipitation over nearly the entire country, which favors a strong start for crops in the early growing season with potential to keep a lid on any rallies. However, the exception is the western half of the central and southern Plains states where HRW wheat still badly needs more rain and the 2-week outlook is drier than normal. Also supportive to prices is that much of the eastern Corn Belt and Delta looks to stay especially wet and likely to delay fieldwork. The maps also threaten fieldwork in the Dakotas by remaining cooler than normal over the next two weeks and further slowing the needed snowmelt to keep spring fieldwork on track for spring wheat sowing. This morning we've got more detailed trade estimates and ranges of estimates for Friday's Grain Stocks and Prospective Plantings Report. You might want to print these out and keep handy so when the reports come out at 11 a.m. Friday you'll see at a glance if market reaction is likely to ...

A well-known climatologist once told me how his audience liked to hear long term weather outlooks going out six months or more.  However, he confided to me that since weather obviously was dependent upon a myriad of factors that could change on a whim, "anything beyond three weeks was completely made up" according to him.  In other words, today's weather forecast technology does not allow for anything accurate beyond three weeks.  I often think the same thing could apply to the commodity markets.  Outlooks can easily shift depending upon a variety of factors.  The trade has a habit of focusing on short term issues that often appear trivial in the larger scheme of things, pulling the market in a temporary direction that causes farmers to lose focus.   It seemed that late last year all we heard about was how poor exports were for corn.  Despite only making up 15% of corn demand, the market seemed solely focused on this singular issue.  The market likes to "overdo" things, either exploding too high on moderately bullish news or falling too fast on moderately bearish news.  Poor exports were a perfect example, as the market dropped 60 cents last November as the news focused on lackluster exports.  They later clawed back about 2/3rd's of that loss as the market had clearly overdone it.   The export market is seasonal.  Brazil dominates the second half of the year with their corn exports as their harvest picks up in July.  Once they run out of corn the end ...

On the Grains: Overnight markets are mixed to start a big report week. On Friday we get the Mar. 1 Grain Stocks and even more keenly awaited, the 2023 Prospective Plantings Report. The weekend was not without more geopolitical intrigue with potential for market disruption as well. Topping the list was the announcement Russia would station tactical nuclear weapons in "client state" Belarus (on Ukraine's west flank).   Wheat popped Friday on reports that Russia was going to "temporarily halt exports." It turns out that instead, they only told exporters not to accept any "offers below cost of production". Our Ukrainian grain broker contact confirms that but says prices at the time were only about 16 cents per bu. below that new minimum price ordered by the Kremlin. (Nonetheless, it still helps establish a "floor" for global FOB wheat if it sticks.)   Our Ukrainian source also sheds light on China's latest moves to assert itself as a rival superpower: It has informed the Kremlin it will only continue to buy Russian oil and grain in their own currency, not dollars. He says that insures Russia will in turn shift imports sources for machinery and other goods to Chinese products for both economic and political reasons.   Throughout history, Chinese moves like that are known as "mercantilism", defined as economic aggression that combines exploitation of foreign dependents with domestic protectionism. China's next target? Brazil. Hundreds of Brazilian agribusiness leaders flooded Beijing last week ahead of a visit by Brazil's newly elected President Lula da Silva. He's planning ...

"PENDING" WHEAT TARGET HIT: On 3/20/23 we recommended all producers, regardless of class, push cash sales another 10% if May KC futures hit $8.41 and still another 10% of KC May futures hit $8.58. The $8.41 target was hit on 3/21 and the second target was hit Friday 3/24. so all producers should now be 85% sold on '22 wheat. NEW WHEAT ADVICE DAY 1: Hedge the first 10% of 2023-crop wheat in your respective new crop month at KC, MGE or CBOT when KC July hits $8.49. NOTE: At that same time, we also advise pricing the final 15% of '22 crop wheat, regardless of class. Opening calls are mixed, but the grains have the potential to see light follow-through after a strong close on Friday. There is again likely to be an outsized influence from conditions in the outside financial markets. In the Headlines Chinese corn purchases continued last week with daily flash sales announced in 3 out of 5 days and totaling another 463,000 metric tons. Fresh export demand from China comes while total U.S. corn sales are still down 34 percent from last year but with the USDA looking for them to drop 25 percent for the marketing year. China needs U.S. corn because of its tighter availability out of Ukraine and while Brazilian exporters are busy loading out soybeans. Brazil's current dominance of the soybean trade has turned U.S. soybean export demand into a weak link of the market over the last few weeks. Weather is flipping toward wetter in ...

Hedge funds have turned net-short in corn futures and options for the first time since 2020. The sentiment shift was sparked late last month when the March contracts went into delivery and then selling interest was sustained throughout the recent economic turmoil. The Commodity Futures Trading Commission is expected to catch up with the most current trader positions report this afternoon following a cyber attack that disrupted the data release for nearly two months. The updated numbers should show the managed money trader category keeping a net-short in corn for the second straight week to go along with a heavily net-short wheat holding. Funds will have trimmed down a net-long position that remained in soybeans during a reporting week when May futures lost about quarter. Hedge funds are likley to have flipped net-short again on hogs after their bets briefly poked into net-long territory in the week prior. More length has also recently been erased from net-longs held in live cattle and feeder cattle futures.   One thing that stands out about the fund corn position in particular is its split between longs and shorts. With the net-short recently recorded above 50,000 contracts, the position consisted of over 224,000 short positions, but also more than 170,000 longs. A large total of corn longs remaining represents a substantial amount of additional liquidation that could still pull futures sharply lower; however, it also signals that a large pool of professional money managers continue to believe in the potential for higher corn prices.   Hedge funds have ...

On the Grains: Grains are mixed this morning with corn barely steady, beans down again but wheat firmer. Corn got only a whiff of support from yesterday's weekly export sales that set a marketing year high at 3.1 million tonnes. It got caught in the downdraft from beans with sales of only 152K and not even close to the low end of expectations that ranged from 400K to 900K. Beans have broken key support and continue under pressure from fund liquidation. Soybean oil was already in trouble and is pressured further by sharply lower crude prices overnight that translate to lower demand for biodiesel in the minds of traders. Contributing to that was this week's surprising rise in crude oil stocks while traders were expecting a drawdown. Those stocks are now 8% above the 5-year average and another contributing factor in overnight losses was yesterday's testimony by Energy Secretary Jennifer Granholm before a House Committee yesterday. Last fall when crude was well over $90 per barrel, the Biden administration promised with considerable fanfare that they would begin refilling the Strategic Petroleum Reserve (SPR) "at a profit" if WTI dropped into the $68-72 range. It was thought that might provide somewhat of a "floor" and oil had rallied several days. Asked about plans to refill the SPR, Granholm pulled the plug on any "floor" talk by informing "it will be difficult to refill the SPR this year because we're actually still in the process of fulfilling the 26-million barrel sales committed to earlier." Overnight ...

Fungicides have now become just another staple crop input used when growing corn/soybeans where we live. Fungicide application has become part of our agronomic program. While fungicide use had previously become common practice in places without winters that tended to be warm and damp like the Delta or Brazil, we get consistent positive yield results here in NW IA from fungicide use too. Would that always have been the case or just something that has happened in the last decade or so. It could be that a warming planet is changing the habitat for fungi so that they adapt just as it has the location of where animals live, where aquatic marine life migrates and at what altitude tree-lines are located. The concept that the risk that climate change poses resulting from rising earth temperatures may be a lot more than melting ice in the arctic. That premise made it on the small screen recently in the Netflix series, "The Last of Us". The fictional storyline deals with a fungal apocalypse where the warming planet triggers evolution in a fungus to the point where it infects humans who become a host controlled by the fungus. I watched an episode or two and thought that it was so-so. The concepts are interesting though, diverting from the typical virus driven pandemic, though the zombies are quite similar. You do not want to get bit by either. There are some parallels in nature that reportedly fit the script where they claim that there ...

On the Grains: Overnight trade was steady to mixed in corn and beans but firmer in wheat after yesterday's plunge. Stocks are a little firmer after ending sharply lower on a wild up-and-down afternoon while oil was lower overnight after three days of gains. If it sounds like a hodge-podge of indecision at this point that pretty much sums up trader attitudes while they digest dueling messaging from Fed Chief Jerome Powell and Treasury Secretary Janet Yellen yesterday. The Fed raised interest rates a quarter point, as most expected. The focus was "reading between the lines" of what he said after the announcement. What hawks heard was his emphasis on the need to continue fighting inflation with the Fed's goal to tame it back towards 2% from its current rate of 6%. What doves heard was the noticeable absence about the likelihood for "continued hikes in rates as needed through 2023" that have accompanied post-hike remarks in the past. Instead, all Powell indicated was "likely need for one more quarter-point hike by the end of the year." So what makes Powell think one more hike might be all that's needed to keep inflation slowly working downward? Because there are other signs of a slowing economy now exacerbated by the banking crisis that Treasury Secretary Janet Yellen addressed in Senate testimony yesterday. While downplaying ideas the government was preparing to guarantee deposits beyond the $250,000 limit on FDIC insurance for all banks after doing so for SVB and Signature Bank depositors, she simply reassured ...

Prior to Putin's invasion of Ukraine, the Biden administration released what was an unprecedented amount of US Intelligence gathering relative to Russian preparations for their invasion to give the world warning as to what was to come. This intelligence was highly accurate but was quickly forgotten about as only their mistakes tend to linger in the present consciousness. Taxpayers should be getting something for all of the $billions they pour into black sites like the NSA. They would love to tell us more but it would reveal their sources and methods in doing so. Recently, the Biden administration announced to the world sharing intelligence that China was preparing to provide Putin/Russia with lethal aid to assist them in their war in Ukraine. Russia is running out of drones, missiles and ammunition amongst other things ahead of what is expected to be a spring Ukrainian counterattack that will come when they are ready. Ukraine has been holding the line on the Russian offensive in the east while training, restocking, and further arming its military for this offensive. Where does the US get its intelligence from?   There are reportedly 3 known US surveillance gathering bases in the world that have been publicly acknowledged. I am sure that there are others that have not been. One is near Denver Colorado, another is a joint base in the UK and another is the Pine Gap facility in Alice Springs, Australia pictured above that is operated jointly with Australian military intelligence services. These intelligence gathering centers ...

Wheat Recco Day 3: On 03/19/23 we recommended that all producers, regardless of class, push cash sales another 10% if May KC hit 8.41. This sale was triggered on 03/21/23. You should now be 75% sold. Continue with the additional recommendation to sell another 10%, regardless of class, if May KC can trade to 8.58. On the Grains: While most focus is on the upcoming planting intentions report coming at the end of the month there is also the quarterly stocks report that will be released at the same time. While there is a good range of trade estimates for acreage, there should be enough intended acreage so that it would be hard for acreage itself to be bullish without some unfavorable weather. The trade expects better weather this year than a year ago with the fading La Nina and developing El Nino. I have been a little surprised at the lack of market concern displayed by soybeans and cotton markets over the prospect of maintaining acres. The cotton market, in particular, appears to be saying, "Don't plant cotton." Old crop cotton was never profitable after its harvest and new crop is also an unprofitable crop at current futures price levels.  Comparatively, corn and soybeans have thin margins. Drought still maintains some grip on the Texas high plains where a lot of cotton is attempted to be grown. The trade appears to be building in expectations for a negative planting intentions report leading to a potential "dog catches car" type outcome. I would think that ...

About two years ago, I remember talking with my parents about how much I enjoyed grocery shopping. The variety and affordability of food made each grocery store run an enjoyable experience, but since then, that joy has disappeared as grocery prices have shot through the roof. Grocery shopping has now become a daunting chore that makes my bank account cringe with every purchase.   According to the most recent Consumer Price Index (CPI) report, overall grocery prices were up 11.3 percent year-over-year in January. This figure is well above the overall inflation rate of 6.4 percent. A USDA report released last year showed an average family of four spent anywhere from $958 to $1,445 on groceries in the month of January 2022. That same report released this year discovered in the month of January a family of four spent between $1,047 and $1,576 on groceries. That's a nine percent jump! Did your income increase the appropriate amount to cover these increased costs? Mine sure didn't. With this increase in prices, 20.3 percent of an average household's income is now going towards groceries. Back in 2021, households were only spending 5.2 percent on groceries.   A few products that have seen significant price increases include eggs, milk, bread, and pet products. Eggs have seen the most significant price increase over the last year, increasing a whopping 250 percent to $4.82/carton. Keep in mind, egg prices haven't just shot up due to inflation, a rampant avian flu outbreak is also to blame. This outbreak has also ...

While the S&P chart looks generally defensive, support was found so far where it needed to be seen so bulls have a chance to repair things. It looks like 5 waves down from the February high, which would be the trend. After additional corrective trade, which could form the right shoulder of a head and shoulders formation, then things will get dicey again. All markets are waiting on the Fed Wednesday to signal where it is going next with monetary policy. The Fed will give their verdict on the health of the banking system. On the Grains: Do oats know? Probably if oats can take out Monday's high, then other CBOT markets may get permission from this leader to do so. Otherwise, it is just noise. The weather conditions that have been supporting the soy complex in South America come to an end with the season. The trade looks for further reduction in the Argentine crop to as low as 25 mmts. A lot of South American crop conditions have to be in the market but each time they have set up to fail, selling exhausts. Both bulls and bears lack conviction. A rebound in soyoil turned the market higher Monday but I can't say that the soyoil chart looks that promising yet for the bulls. Monday's lows are now key support for spot soybeans. They are getting some soaking rains to replace drought with local flooding in Argentina but it is too late in their growing season for much yield recovery. ...

Yeah, what a smart-aleck. Fed Chairman Jerome Powell will announce what change there will be, if any, to the Fed controlled interest rate at 1 pm Wednesday. There is a wider range of expectations than usual this time as one result of the banking turmoil that just erupted with some banks failing after a sustained period without that happening. Some banks have always failed and in most cases that is really no big thing as a result of the FDIC which has functioned quite well as an institution. The banks that failed recently had new circumstances that contributed to these failures. That list includes yield curve risk, an enormous number of deposits above the $250,000 FDIC insured limit, digital banking real-timing the speed of transactions, and in the case of Signature bank, crypto "imaginary money" as deposits. Their demise was largely due in part to having assumed too much yield curve risk. They had invested deposits in long term bonds when short-term rates were next to nothing and then… Fed interest rate hikes inverted the yield curve sending short-term rates above long-term ones. That caught these banks crosswise resulting in $billions in 'marked to the market' losses in their bond portfolio that they did not have assets to cover. Bank of America reportedly has $108 bln in these yield curve bond losses but they have deposits and equity enough to absorb them. These yield curve losses are a banking sector wide problem and one reason why Moody's lowered its rating ...

NEW WHEAT RECCO DAY 1: As noted in yesterday's "Sunday Preview", we're using Fibonacci retracement theory to set targets in KC May wheat for advancing old crop sales. Regardless of class, advance old crop cash sales another 10%, to 75% sold, when KC May hits its 50% retracement objective of $8.41. Set a target at a 62% retracement to $8.58 in KC May to advance sales another 10%, to 85% sold.   On the Grains: There was certainly no shortage of geopolitical drama over the weekend to unsettle traders with a "risk off" posture pressuring grain markets in overnight trade.   The banking crisis is not over. Swiss banking giant UBS Group agreed to buy out its rival Credit Suisse for $3 billion in the biggest megamerger of systemically important megabanks since the 2008 financial crisis. But even that failed to calm fears. Crude oil is down again in overnight trade on continued macro-worry and taking soy oil with it. (Soy oil is also under pressure as doubts grow about biodiesel growth predictions linking back to those disappointing EPA mandates for biodiesel use back in December.) Other regional banks such as First Republic are suffering "runs" as depositors seek safety in moving funds to the "too big to fail" banks after FDIC guaranteed deposits beyond the $250,000 limit for SVB and Signature Bank to set a precedent.   Also pressuring prices is the extension of the Ukraine "safe corridor" deal; though not without confusion on the length of the extension. It's for 120 days according to the ...

New Monday Wheat Recommendation: We're using Fibonacci retracement theory to set targets in KC May wheat for advancing old crop sales. Regardless of class, advance old crop cash sales another 10%, to 75% sold, when KC May hits its 50% retracement objective of $8.41. Set a target at a 62% retracement to $8.58 in KC May to advance sales another 10%, to 85% sold. Opening calls are for the grains to start steady as traders sort out cues from crude oil and outside financial markets. In the Headlines Geopolitical tensions are heightened further following Vladimir Putin's visits to Crimea and Ukraine's occupied city of Mariupol and ahead of Putin hosting Chinese President Xi Jinping in Russia this week. China is attempting to support plans that would negotiate a ceasefire in Ukraine while locking in new territory for Russia. Complicating the matter for China was the Friday announcement of an arrest warrant issued for Putin by the International Criminal Court for war crimes. European markets will be even more important than usual for setting the Sunday night market tone, since more turmoil with Credit Suisse and other European banks will have to be addressed on Monday. Several regional U.S. banks are also still under pressure as they face heavy withdraws and shorting of their stocks while their assets are being marked down. Banks continue to have the problem of having to borrow at higher interest rates and pay higher interest on deposits while money is tied up in long term Treasuries that are worth a ...

California is threatened by flooding from another "atmospheric river" that formed to funnel a massive stream of water vapor over the central portion of the state. This week's atmospheric river system was one of the stronger ones that the National Weather Service says can carry as much as 15 times the average flow of water at the mouth of the Mississippi River. Excessive rainfall is a problem for crops in the region while wind gusts of up to 100 miles per hour are responsible for power outages. The storm was the latest in a string of severe weather events that have occurred this winter to provide relief against drought in the West, but that now pose the risk of flooding for many farmers heading into the spring planting season.   California weather should remain a matter of interest as Nutrien meteorologist Eric Snodgrass says that "we need to be watching the West Coast sea surface temperatures closely." The risk of drought in the Midwest is elevated if these Pacific coastal waters continue to turn colder, although Snodgrass cautions that the effect could be minimal or even entirely offset if an El Nino takes over as the dominant influence of weather patterns this summer.   On the other side of the country, Florida is still feeling the effects of Hurricane Ian with an orange crop that could fall to a 90-year low this season (recently driving orange juice futures to all-time highs). Florida has been on a drier, warmer trend as of late, so now ...

Grains are poised in overnight trade to open on a firm note as hopes build that bank crisis contagion will be held in check by rescue plans among global central banks. But it's a nervous confidence that needs to get through the weekend without new crises developing at other banks. Stocks had a decent bounce yesterday and crude oil is up again in overnight trade.   Yesterday provided the 3rd straight day of big flash corn sales to China. And in what has become a near weekly event, the Buenos Aires Grain Exchange has lowered its estimate for Argentina's soybean crop sharply yet again. Yesterday it pegged the crop at only 25 MMT, down another 4 million from its last estimate. That's now 8 million below last week's USDA WASDE estimate of 33 million and down 42% from last year's 43.3 million.   In other headline news this morning, Chinese leader Xi Jinping visits Russia's Putin in Moscow next week. China has already urged Putin to continue the Safe Corridor deal that automatically renews this weekend unless he stops it. That's likely a done deal since Xi's trip is at Putin's invitation and being billed by both sides as "showcasing the deepening relationship between Beijing and Moscow" by discussing further "strategic cooperation" through planned signing of "several bilateral documents."   The relevance for markets has no end in sight to geopolitical turmoil. As if to underscore that, Poland has announced it will send four Soviet-era Russian-built MiG-29 jet fighters to Ukraine in coming days. It puts ...

The media has gone to great lengths to ensure that everyone knows about the impending decline in cattle numbers and subsequent expected drop in beef production. Is the material herd liquidation a good thing or a bad thing? I am going to be a contrarian here and say that it is the latter. The futures market is attempting to price in this historical decline in cattle numbers. Feeder cattle futures have soared to levels that will be problematic for the feeding industry. Keeping a pen full of feeders on feed would have an interest cost of over $130-140 head per turn for just the animal itself if you have the cash equity for everything else. The cattle industry is highly capital intensive and high leverage is going to be the demise of some feedlots who will not survive the credit crunch coming at them. The price of feeder cattle will become a rationing process to determine which of those who want to continue feeding cattle can afford the investment and risk. Feeder cattle producers are being offered an enormous profit potential opportunity. Will futures prices materialize? We would suggest Livestock Risk Protection (LRP) insurance policies (talk to Eric Relph 712-227-1110 for the particulars). These policies have been significantly improved and appear to be very appropriate risk management vehicles for the current fundamental conditions. The ante is being raised significantly for those in the cattle industry who want to call the raise thus holding their hands to see if they win ...

Overnight trade is mixed with corn and beans on the plus side but wheat soft as we go to press. The safe corridor deal for Ukraine we likely renew without incident despite Russian complaints and threats. Why? Because now China has weighed in favor of extension and with continued China support critical to Putin he's unlikely to buck them.   The latest 2-week precipitation outlook came out yesterday. It leans favorable for the whole country except for parts of HRW country in the Southern Plains and potentially excessive in much of the E. Corn Belt and threatening fieldwork delays.   Today we get another batch of weekly export sales. Another big flash sale of corn to China yesterday of 667,000 tonnes has raised hopes for more and expectations for this morning's weekly sales of corn range from 700,000 to 1.5 million tonnes. Expectations for soybeans and wheat range from very low to robust; as low as 50K for beans to as high as 700K and as low as 75K for wheat to as high as 500K. Another issue making headlines is a new outbreak of African Swine Fever (ASF) in China. It's not seen as threatening as the 2019 disaster but could threaten up to 10% of China's hog production. That could dampen soybean meal demand but enhance U.S. pork export potential.   Yesterday's PM report laid out the "bombshell" CFTC dropped with another "catch-up" release of the Commitments of Traders report showing fund positions as of Feb. 28. It showed breathtaking fund liquidation of nearly ...

Recently, I have come to feel like it is harder to get clients to act upon our market recommendations than it has been to call the market. Up until August 2020 we had been very bearish the corn market. I recognized an upside chart gap as a breakaway gap that would lead to an extended gain. It was tough getting subscribers to make the change as they get psychologically locked into a mindset, which we had fed, and I repeatedly advised "time to change horses" as the trend turned higher. Since August 2020 we were very bullish until last December. I am going to walk through the chart and try to give you more clarity as to how I make these determinations. While I do grasp fundamentals believing them important, most of my major decisions are derived from technical chart analysis. As this is my 50-year crop anniversary I have learned a little something along the way. I have been looking at Elliot Wave chart patterns for a few decades now. I can't tell you what the wave count for every market is all of the time but every so often something in the pattern does stand out and has been very useful in my decision making. I am not what many call a "trader". I am an investor. For example, when natural gas declines so that I can see 5 waves down and has lost near 80% of its value from the high it is time to invest in ...

On the Grains: Grains are firm in overnight trade as fund long liquidation finally subsides a bit in corn and beans while short-covering in wheat continues. Crude oil is soft and still below the $72/barrel threshold where President Biden said last October the U.S. would begin to replenish the Strategic Petroleum Reserve. Not a peep about that lately, but it does act as a potential "floor" at this level. The Dow is down hard again as this goes to press. Uncertainty in the wake of the unfolding banking crisis; what the Fed will do on interest rates and what Congress will do on banking regulations still abounds.   Funds had actually doubled-down on their short bets against Chicago wheat and found themselves still short nearly 100,000 contracts with crop condition ratings actually worsening for HRW country and heavy snowpack up north threatening fieldwork prep for spring wheat. As a result we saw double-digit gains in wheat actually leading the way higher for a change instead of a dragging corn back like a ball-and-chain.   Yesterday's highlight for corn was the 675,000 old-crop sale to China. It finally confirmed rumors we'd been hearing for weeks that China was going to take advantage of this price break to source corn out of the PNW. Hopefully we'll see some more since corn is still over $10 per bu. in China. Speaking of that, we've got good sources telling us USDA's ending stocks numbers for China are little more than propaganda USDA is buying. They have those stocks at ...