The Commstock Report

For some reason, many seem to think that winning a trade war with China will be easy. After all, Treasury Secretary Bessent says that Beijing is holding a pair of twos. There is also the old adage that if you do not know who the patsy is in a poker game, don’t be surprised if it turns out to be you. Secretary Bessent says that we do not intend to decouple from China. Fine…but what if China intends to decouple from us? There are some very smart people who have great experience in China who believe that Xi has been preparing his country and the Chinese economy for Liberation Day, April 2nd, 2025 for years. When China sells us something, they are paid in dollars. Up until a few years ago, they would invest those dollars back into the US, favoring buying Treasury Bonds. Over the course of decades, they had bought US Bonds with peak holdings of $1.3 trillion in 2013. They have been receiving more dollars as their trade deficit with the US grew, yet were investing fewer of those dollars back into the US. Chinese owned US Treasuries have declined to $760 bln and they are not adding…

On the Grains As we move forward, we expect to be 90% planted by the expiration of the June short-dated options on May 23rd without weather delays, and we are protecting the downside of the corn market. If, for some reason, we end up with weather delays and the market rallies, we will have the top side open to re-evaluate at that time. If we get that 90% planted and pressure the market lower, we will exercise the 4.60 puts and have a hedge in place. Short-dated options might be relatively new to some producers, so feel free to call, and we can discuss the details. An alternative plan could be to buy the full December $4.70 put option that expires November 21st for 40 cents if you feel more comfortable covering the entire time. However, for tracking purposes, we will track the short-date options listed above in our report. We can cheapen it by selling calls if you want to discuss covering the entire calendar.  Remember that those sold calls could be marginable in a rally. In a year like this, which appears to be a year where stocks will increase, the funds will not be as willing to buy the…

Farmers got out ahead of the rain last week getting a good start to the season, planting nearly 20% of Iowa already. Going forward it appears we will be fighting scattered showers for the next week or more. Above average temperatures appear to be on our side which will help dry out wet fields and reduce any risk of potential frost. It would appear the greater part of the Corn Belt will receive an additional 1" to 2" in the next week. Looking out ahead into early May, regions that have seen heavy showers up until now, lean drier such as Central Missouri and much of the Eastern Corn belt. This will be mostly positive as it will allow field work to continue. I am hoping for my crops to get planted this week, but it will all depend on how much rain we get.   Major weather threats are absent for Brazil's Safrinha corn crop. We continue to see 1" to 3" of rainfall for most of Brazil's second crop corn production area through the end of the month. The SW region of Goías leans drier but could still see some scattered showers. Extreme climate seems to linger in…

On the Grains Good morning, ladies and gentlemen. As we turn the corner at the midway point in the week, there is limited news in the row crop markets. Soybeans stole the show yesterday, as even the least attractive row crop has its day in the spotlight. News that India is resuming palm oil imports after a five-month lull, as prices are now below soybean oil, this didn’t affect the market. Malaysia’s palm oil production continues to face challenges, with total output is expected to be below 19 million tons, the lowest in three years. U.S. soybean exports could slow down, yet at the impressive rate India has been buying, 128,000 TN this year, the USDA will likely adjust upcoming reports as current exports are at 2.10 billion pounds already, exceeding projections. While all this demand has been good, it could correct at any moment, the soybean oil chart could get toppy as we have almost a perfect double top at $48.54/55. ADM also announced that it will be closing the Kershaw, SD, crush plant due to uncertainty about biofuels. More on biofuels, Governors from seven Midwest states are calling on the EPA to issue emergency waivers for both E10…

I have found that when a Navy Seal tells me something that I can take it to the bank. 30-year veteran Navy Seal Jason Gardner, now leadership instructor with the Echelon Front, spoke at our first Family Farm Masterclass in 2022. I had breakfast with him and we discussed Afghanistan and Ukraine. There was debate at the time as to whether Putin was truly planning to invade Ukraine. Our intelligence agencies were warning that the invasion was being prepared but not even all of Ukraine's leadership in Kyiv was convinced that it would actually happen. There were many skeptics who argued that Putin would not invade as it did not make sense. What mattered was that it made sense in Putin's head. I asked Jason for his opinion. He said that he had contacts in the teams who were in Poland and they had told Gardner that the invasion was imminent. I believed him. I also acted on the advice. We bought wheat calls that turned out to be the most profitable call options that we had ever purchased in my life as a result of this chain of information. We shared that info with subscribers. It comes down to…

On the Grains As you can see, yesterday’s planting progress was released. It was only slightly higher than the average trade guess of 11%, coming in at 12%. What is surprising is how fast the great state of Iowa is throwing it in the ground. I say that light-heartedly because we know no farmers take more time to set up a planter than Iowa farmers. Yet, Iowa farmers are still 11% ahead of the 5-year average, coming in at 18%. Almost 1/5 of the intended acres are planted on or before Easter. While yields are still undetermined and there is much more to raising a crop than planting it, most importantly, the earlier planted crops fare better in a dry year. Some are calling for an additional million corn acres due to early planting. I will reserve my judgment on that till later in the spring. I am not out selling headlines, and it’s still plenty wet in the east. On the national average, UAN 28% and 32% were higher last week. 32% was up $9.39/TN while 28 % was up $7.19. Wisconsin led the charge higher as both of those products were up $22.50 and $10.89/TN. Higher fertilizer prices…

"Thank you for all the kind comments on the 40th Anniversary CommStock Report aired Good Friday" Hope that you had a pleasant Easter!   Let's catch up on the market outlook:   So far, the weakness seen from the equity market highs, while having achieved the textbook definition of being a bear market correction, is relatively minor. I trade the e-mini-S&P. Weakness seen thus far is not enough to correct a 16-year bull market. The initial decline was arrested at the first level of significant support at a 50% retracement of the final leg up. It is extremely unlikely that this weakness is over yet and we do not know how big that it will get. If and when that low is broken, then the bear market is likely to become expansive with an extended duration to it. There is potential for this bear market to have a great scale of significance. There is real risk that it can mark the beginning of the undoing of American exceptionalism.   A 38% retracement of the 16-year bull market sets a downside target of 2635. That is just one possibility of many from the opening of Pandora's Box. I decided to buy…

On the Grains Remember those stupid graphic T-shirts that everybody had to wear in the mid- to late 1990s, the No Fear ones? I remember “No Fear Biking” and “No Fear Hockey.” Whatever the slogan was, it was always “No Fear.” I don’t remember “No Fear Farming, it will work out.” However, I may print some up and give one to my banker when he asks about our cattle inventory. This content is for members only.Register Already a member? Log in here

When reminiscing about how we used to give away Carson City circulated Morgan silver dollars, minted with silver from the Comstock Lode mine, as an incentive to new subscribers, it dawned on me that that was 40 years ago. Those silver dollars are worth about five times what they cost us back then. When the company started in the early 1980’s, I was a refugee from the Ag Depression of the 1980’s, becoming a broker so that I could continue to farm. The initial owner of the company was a stockbroker, and I was the commodity broker. I was the one who came up with the name of the Company, Commstock Investments, in order to cover both investment classes. The owner, who had a family legacy in the beef packing industry, left to become CEO of a beef packing plant in Dodge City KS and subsequently he sold me Commstock Investments. In 1985 representatives of the local radio station, KICD, walked into our office. The source of commodity information that they were airing was retiring, and they needed a replacement. The initial version of the Commstock report began as a radio report on that single station. That was back when…

I was a bit surprised to see Ray Dalio as one of the quests on "Meet the Press" Sunday April 13th. I follow Dalio and he has been issuing some warnings over financial markets that I was not sure that they would air on national TV. They did. He did not hold back. He is not worried about a garden variety recession. Dalio has been in the industry for about 50 years and is a student of history. He forecasts, "The times ahead will be radically different from those we've experienced in our lifetimes, though similar to many times in history." Did you understand what he meant?  He sees current developing events as more similar to the 1930's. The following is a summary of his interview on "Meet the Press". Here is a construct of the interview: "Ray Dalio, the founder of Bridgewater Associates, delves into the critical themes of his upcoming book, "How Countries Go Broke," offering a sobering analysis of the prevailing global economic and political climate. He posits that the current tariff disputes are not isolated incidents but rather manifestations of deeper, more systemic issues rooted in five fundamental historical forces that have consistently shaped global trajectories.…