The Commstock Report

Bids and offers looked to be stacking up toward a slightly firmer grain market open. Crude oil and the dollar index will again be monitored for their reactions to the latest geopolitical developments. In the Headlines Trump's tariff plans dominated headlines last week. Mexico and Canada are targeted for 25 percent tariffs while imports from China face an additional 10 percent tax on top of existing tariffs. Mexico's new president responded with a statement and later had a phone call with Trump that markets responded favorably to. Canadian Prime Minister Justin Trudeau flew to Mar-a-Lago to meet with Trump over the weekend. Chinese officials released a statement that criticized the tariff threat, but they did not go so far as to bring up retaliatory agricultural tariffs. The Brazilian real currency fell to a new all-time low against the dollar last week. Forex traders were not impressed with the Brazilian government's plan to cut spending and raise taxes. The real is also down against the Chinese yuan by about 15 percent since the start of the year, so the result is that the terms of trade have shifted further in favor of China buying from Brazil over the U.S. Tariffs and…

Hope that you all had a Great Thanksgiving! “They were eating the turkeys where we live”! We received a positive response to our recent special report…”The Wall Cloud”.  It was published over 3 days so we decided to compile it into one report and send it in its entirety today.  Have a pleasant weekend. Part 1 Originally Published 11/18/2024 I can remember standing in the doorway to our home that leads to the basement looking to the west and seeing what was in the preceding picture approaching… A Wall Cloud. There was a different smell in the air and rumble in the distance so that all of your senses were playing into what was happening. The wind went briefly still, literally becoming the calm before the storm. It could make the hair on your neck stand on end. It gave you a sense of raw power and that it was irresistible. You hoped that it would provide needed rain but there was also the possibility that wind and hail would bring it. You knew that things would look different after the storm passed than they did before and there was some angst mixed in the emotion of what could come…

Brazil's growing conditions remain ideal as we approach the end of November. While dry pockets were beginning to form in Southern Brazil last week, forecasts allow for solid precipitation of up to 4", eliminating any concern for crop stress. Argentina will see the heaviest rainfall with areas of up to 6". The northern tier of Brazil will see 1.5" to 4" falling later in the week. Temperatures look to be at or below normal. We estimate roughly 90% of the soybean crop will be planted by this weekend. The remaining 10% will fall in some of the fringe areas in northeast Brazil as well as Rio Grande do Sul. Our family farm in Minas Gerais is roughly 85% planted and should wrap up later this week.   Brazil continues to ramp up corn ethanol production. Currently, there are at least 12 "full" corn plants in Brazil in operation with another 10 "flex" plants. (Flex plants use sugarcane for feedstock half the year and then use corn the other half). According to Banco Itau, they have identified another 22 plants that are either being constructed or in the blueprint phase. This would effectively double the production capacity in Brazil. It seems…

On the Grains Good morning and happy Thanksgiving to you all. I made it from just before Labor Day to Thanksgiving as the morning Commstock report author and thank all of you for following along on the journey. My hope was that I kept you informed and if nothing else entertained along the way. One thing is for sure, no turkey dinners in the combines this year. Heck there wasn’t hardly any Halloween candy in the combines as harvest was pretty much over by the end of October. For the record, as a cattle feeder, it doesn’t hurt my feelings if we don’t have turkey at all because we all know, “Beef is what’s for dinner.” So go ahead and enjoy that beef. This content is for members only.Register Already a member? Log in here

PLEASE REFER TO THE HEDGE AND TRADE STRATEGY PAGE FOR UPDATES!! DJTs rejection of globalization and free trade policy, soon will be replaced by an “America First” trade and foreign policy, is not a threat or a negotiation ploy. It is real and about to be implemented in 2025. The world relationship as we have come to know it, post WWII, is about to undergo a material change. The opportunity that the US has given geopolitical allies to ride on our coattails as equal partners is over. The opportunity for allies to roll forward in the US orbit and be protected by the US policing the world order is over. This relationship was not one-sided as the US received great benefits as well. The US is the center of the world economy and without access to our markets or our security pledge to include trade partners under our umbrella of protection, it is about to undergo changes that will reorder the world trade-wise. It will geopolitically fragment into smaller zones of influence and self-interest. DJT is going to create an America First and foremost entity and will sell the benefits of the American alliance going forward to former and new…

On the Grains Good Tuesday morning, overnight we had the Trump tariff announcements and shockingly they look an awful lot like Trump 1.0 with an additional 10% placed on China Day 1. While China maintains that nobody will win a trade war, it looks like one is coming. It could take the number 2 economy down hard, as some are projecting a 1% slip in China’s GDP. Now on to the markets, what is surprising to me is that we had these announcements yesterday around 6 pm and the grain markets haven’t reacted negatively at all, obviously a bunch of tariffs were already priced in. Speaking of priced-in, flash export sales to Mexico of 364,791 MT for 24/25 and 89,298 MT of corn failed to produce any reaction. We continue to believe that it is frontend loading by Mexico here is a visual chart of where we are at marketing year to date.  This content is for members only.Register Already a member? Log in here

DJTs rejection of globalization and free trade policy, soon to be replaced by an "America First" trade and foreign policy, is not a threat or negotiation ploy. It is real and about to be implemented in 2025. The world relationship as we have come to know it, post WWII, is about to undergo a material change. The opportunity that the US has given geopolitical allies to ride on our coattails as equal partners is over. The opportunity for allies to roll forward in the US orbit and be protected by the US policing the world order is over. This relationship was not one-sided as the US received great benefits as well. The US is the center of the world economy and without access to our markets or our security pledge to include trade partners under our umbrella of protection, it is about to undergo changes that will reorder the world trade-wise. It will geopolitically fragment into smaller zones of influence and self-interest. DJT is going to create an America First and foremost entity and will sell the benefits of the American alliance going forward to former and new allies for a fee. Even traditionally close allies and those who share…

Above you will find today's installment of Morning Market Talk. Soybeans Hold Support You can click on the picture above to take you to this morning's episode. On the Grains Here we go off to the races for the holiday shortened week, corn continues its sideways chop, wheat grinds lower and soybeans try to mount somewhat of a recovery after last week's push to contract lows. This potentially could be one of those weeks that can be a momentum turner heading into the balance of the year. However, corn just seems to be stuck and will need something to boost it along. Eric talked on Friday in the video portion of the report about the wedge formation on December corn, the bottom side of the wedge is $4.23 and we will need to hold above that and then the 50 DMA is $4.18. The Commitment of Traders had the funds net buyers again last week of 4,639 contracts and long 114,628. If we punch the bottom side of that wedge we could see some of those longs hit the exit door. Over the weekend there were no long range attacks in Russia/Ukraine which is somewhat bearish wheat and not supportive…

Grains look set for a steady to slightly softer open as traders watch for guidance from the outside financial markets, especially the dollar index after it rallied to a new two-year high on Friday. A shortened holiday trading week includes markets closed for Thanksgiving and open for a shortened session on Friday. Interest rates, equities, energy, and metal futures will be open for trading on Thursday night. Grain futures do not have a night session on Thanksgiving; they will open at 8:30 am central on Black Friday before closing early at 12:05 pm. In the Headlines President Trump announced his selection for Secretary of Agriculture over the weekend, Brooke Rollins from Texas. Rollins was the director of the Domestic Policy Council during Trump's first term before last leading a research institute that supported Trump's 2024 campaign. She will be the voice to address how agriculture may be impacted by tariffs and changing trade policy as well as the official who would implement any changes to school lunch programs or SNAP benefits that might be pursued by the nominee for Health and Human Services, Robert F. Kennedy Jr. All of the various farm organizations have released their estimates for the price…

Friday was another session where grain traders had most of their focus locked on the continued tumble for soybean oil futures. After just testing the calendar year highs less than two weeks ago, the nearby soy oil contract has since dropped over 15 percent. Much of the soy oil loss was led by lower palm oil prices, which involved uncertainty about export demand and about the outlook for biodiesel production in Indonesia and Malaysia. There was related negativity about the potential direction of renewable fuels policies here at home as well, but that bearishness was balanced against the surprising surge in U.S. soy oil exports.   A big part of the current soybean oil story starts with the bearish outside reversal that futures suffered on November 11th. Soy oil futures reached a new six-month high early on that Monday session before traders went for the exit once they heard about President Trump selecting Lee Zeldin for head of the Environmental Protection Agency. Fast forward to this last weekend, the soy bulls were further spooked by the choice for oil company CEO Chris Wright to lead the Department of Energy. Zeldin was noted not necessarily for being against renewable fuels but…