Katie Geerdes

Conditions in the Gulf and Atlantic are currently guiding the paths of systems/storms/hurricanes. The Bermuda high continues to be out of position, sitting further NE in the Atlantic than normal. That allows hurricanes to veer off north before they reach the Gulf or US coast. The one that made it into the Gulf hit western Florida and then scooted up the East coast. It hit landfall as a cat3+ hurricane because hot Gulf water temps fueled it. These conditions serve to pull hurricanes away from the central/western Gulf. The high-pressure ridge now dominating the heartland is also a barrier to western hurricane landfall. This blocks gulf moisture from reaching up into the nation’s midsection where drought continues. Most everything tropical is being pushed eastward this year.   This is the last day here of what was another brutal 4 day stretch of extremely stressful crop conditions. Heat and wind sucked the life out of plants. Temps now cool but rain is still absent. 45% of the country’s corn and 40% of its soybeans remain in drought. That also says that 55% of corn and 60% of soybeans were not being harmed by drought. However, the stress is not static. The…

Guest Editorial by Eric Relph CommStock Investments Broker   It seems that one of the recent hot button topics on major news channels and beyond is the US providing massive amounts of aid to Ukraine in their war against Russia. The overwhelming majority of people that I speak with feel that we are doing/providing/spending entirely too much money to assist them in their efforts. While continuing to stack up government debt isn’t the best solution to any problem, I feel that I carry a perspective that few recognize when they make these complaints. My son is a Sergeant in the US Army.   Having just returned from South Korea in June, we found out that he will likely be deployed to Romania in April. This comes as the US is mounting an expanded military presence in Poland and Romania to deter Putin from exercising his aggression outside the borders of Ukraine. As a father, I certainly don’t get a warm and fuzzy feeling about the likelihood of him moving straight toward the heart of the hornet’s nest while receiving continued reports of escalating tensions between the two countries.   Prior to Russia fumbling through their invasion of Ukraine, the US…

NEW FEED RECCO FOR CORN DAY 2: Past advice had you covered on 50% of corn needs through yearend. Hedge the remaining half on this latest break in futures.   On the Grains: Markets are steady to firm in overnight trade as we go to press to start September. Ahead of a 3-day weekend today’s trade will be influenced by traders positioning for what might unfold. Those heavily short are more likely to be nervous about a hot, dry forecast than those who are long. The latest Drought Monitor out yesterday showed drought conditions have only intensified in parts of Iowa, Minnesota, Wisconsin, and Illinois. (Even CoBank Research was out yesterday with a report warning of likely further declines for soybean yields.)   Yesterday’s trade started out with solid weekly export sales as rising prices for South American supplies are helping U.S. corn and beans become more competitive while drought worries return for Argentine wheat. At just under 992,000 tonnes corn exports were near the upper end of expectations that ranged from 400K to 1.1 million. Ditto for soybean sales. At 1.12 million tonnes they were well into the upper half of expectations from 600K to 1.4 million.   Wheat…

As interest rates have climbed at a record rate of trajectory propelled by the Fed, we have been anticipating that at some point the impact would show up in weakening assets values. Yet both home and farmland values have remained doggedly inflated resisting pressure despite the abrupt change in the cost of money. Our neighborhood realtor says that it finally caught up to our house market. He says that the expensive home values on the lake’s shore-line, $1.5 million or so, have remaining strong as those buyers are not borrowing money. CD interest now competes for cash however and mortgage or no, the value of cash will factor into home values eventually. It has just taken some time. He also said that a reduced number of listings also served to support values. With one sale pending, there is nothing else for sale here in our enclave. He now sees a change taking place in the more average price home transactions where the buyers are younger folks with families who require a mortgage. He says that they hung in there up to 6.5% but when the mortgage rate recently surged further to 7.25%, that phycology of these buyers broke and sellers…

One surprise to me during the recent GOP presidential primary debate was when Vivek Ramaswamy called climate change “a hoax”, some in the roomful of GOP supporters booed him. He has been trying to become the previous president’s mini-me on these issues. His plan has been to ingratiate himself with Trump supporters and position to take the bulk of them if the pending criminal trials go badly for the former president. This significant change in GOP sentiment, represented by a GOP audience booing candidates who spin climate change off as a hoax, has been showing up in polls. Particularly, republican young people have accepted made-made climate change is real and not a hoax. Mathematicians and Physicists have proven man-made climate change by the numbers. There is no ideological solution, instead requiring science-based policy actions. Considering how taboo the subject of man-made climate change has been in the past with the core GOP, many were surprised that the question would even be asked at the debate. Asked by the moderator of the debate, “How will you as both president of the United States and leader of the Republican Party calm fears that the Republican Party doesn’t care about climate change?” None…

They are finally rounding up a fleet of F-16s to send to Ukraine and are training their pilots to fly them. During WWII there were a number of American, Canadian and even Polish pilots that flew for the British. I would think that there would be a number of pilots of various nationalities who know F-16s that would be willing to fly for them. Several of our allies are switching from F-16s to the F-35 making retiring F-16 aircraft available. Ukraine’s Mig 29s are not equal to a number of more advanced Russian fighter aircraft. They cannot look out as far as Russian fighters becoming targeted before they can gain situational awareness and acquire their enemy. The F-16s solve that weakness. F-16s are a varied mission aircraft able to do most anything they need done. One of the things is to protect advancing ground forces from Russian aircraft. Ukraine has air defense weapons but that is not enough for air supremacy over the battlefield. This lack of air superiority is one of the primary reasons for only limited success of their counter-offensive. Another Biden mistake was the root of this bad decision. These F-16’s will not give Ukraine air dominance…

There have been numbers circulating that I have found interesting. The low in December corn thus far has been 4.73. The previous record for a crop insurance indemnity between the spring and fall price was 1.26. The spring price this year was 5.91 so to date the largest potential indemnity was 1.18 at the 4.73 low. We had a significant number of farmers lock in their indemnity on recent market weakness.   Irrigators are running overtime this year. Many farmers say that they have never pumped so much water on their crops before. Yet yield checks of irrigated acres are not finding record yields as a result. We have heard of farmers pumping nearly a years’ worth of annual rainfall trying to keep up with the drought. The highest number that we have heard was in TX at 44 inches. A TX cotton grower told me that they had pumped 32 inches of water on their crops and it cost them $10 per acre an inch. He said they will get enough yield to still produce a profit. I doubt that these high levels of water consumption are sustainable. I guess that means that the 11 inches of subsoil moisture…

With the fall harvest approaching quickly to prompt sell-or-store decisions, it is a good time of the year for farmers to compare where crop prices are relative to seasonal expectations and against where they were at this time last year. Seasonally speaking, corn and wheat futures have been tracking lower within a normal pattern of weakness that often finds a bottom during the month of September. Soybeans have held up better relative to seasonal expectations, but history shows a pattern of sharper decline from late August to early October. Knowing that the soybean seasonal points to a low later than corn can be considered alongside the fact that soybean futures are slightly above where they were a year ago while December corn futures are down almost 20 percent, which could possibly encourage taking advantage of the soybean strength sooner and selling soybeans as a type of hedge against further patience on corn.   For wheat, the Chicago contracts are down about 23 percent from their year-ago values and have been cut nearly in half from where they peaked out following the Russian invasion of Ukraine last year. Now that the hedge funds have rebuilt a considerable net-short position in Chicago…

Here is a state-by-state comparison of current condition ratings and Pro Farmer yield estimates compared to a year ago for the states completed.   OH crop condition ratings were 74% gd/ex this week versus 60% a year ago. The tour found 183.9 bpa versus 174.2 last year.   SD crop condition ratings were 56% gd/ex this week versus 48% a year ago. The tour found 157.4 bpa versus 118.4 last year.   IN crop condition ratings were 66% gd/ex this week versus 54% a year ago. The tour found 157.2 bpa versus 158.2 last year.   IL crop condition ratings were 64% gd/ex this week versus 70% a year ago. The tur found 193.72 versus 190.71 last year   NE crop condition ratings were 61% gd/ex this week versus 42% a year ago. The tour found 180.9 bpa versus 177.9 last year.   IA crop condition ratings were 60% gd/ex this week versus 66% a year ago. They had completed 3 western districts and will finish with NE IA today. They were disappointed in what they had checked and NE IA was the donut hole for lack of rain this year, opposite of a year ago.   MN crop condition…

David Kruse and Matthew Kruse   We have been to Lahaina on Maui and can relate somewhat to their recent wildfire catastrophe.  Most people cannot fathom how quickly a wildfire can spread and neither could the people living there.  Many people incorrectly assume they can outrun it. There were reports of the fire jumping at roughly 1 mile each minute.  An Olympic runner could not do that on their best day.   We maintain a jar of burnt cotton in the office as a solemn reminder of what may rank as the worst day of our lives. It is a painful remembrance of the charred result of a wildfire in Bahia, Brazil back in 2010. We had just finished harvesting what was a successful cotton crop that was being processed through our gin on the farm designated as Iowa III. Cotton was compressed into modules at that time instead of the bales seen more prevalently used today. As is standard procedure, some modules were still in the fields where they were made but many had been assembled into a large group of modules in close proximity to the gin site so would be handy to move into the gin. Cotton…