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  • 07/21/2024 Sunday Market Preview
    Grains are called steady to slightly firmer at the open. Traders will monitor the forecasts while waiting for the Crop Progress report and the various updates on demand. In the Headlines September corn futures fell 9 1/2 cents last week. August beans were down 7 3/4. September Chicago wheat futures dropped 4 3/4 cents. Sep KC wheat futures were up 2 1/4 cents. August live cattle closed the week up 72 cents while August feeders were down $3.05. August lean hogs were up $3.12 for the week. Weak economic data from China spooked the stock market at the end of last week, but the major indexes are not far from fresh all-time highs. Stocks will be tested by the ongoing corporate earnings season that features reports this week from companies including Google, Tesla, UPS, General Electric, Ford, General Motors, and Union Pacific. The personal consumption expenditure report will also be issued on Friday morning to provide what is known as the Federal Reserve Bank's "preferred" measure of inflation. The rate is expected down slightly on the month to an annualized 2.5 percent. Stocks and other financial markets were also made nervous by the cyber outage at the end of the week. A software update from the security company CrowdStrike took down certain Microsoft systems, including within networks used by airlines and hospitals. There was general relief shown on Friday morning that the glitch was not the product of a cyber-attack, although hackers reportedly attempted to use the outage to commit various computer crimes. Conflict in ...
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  • 07/19/24 AFternoon CommStock Report – Grains Lag Other Commodities in 2024
    We are now about one month into the summer season and one month into the second half of the calendar year. It is a good time of the year to check on grain and livestock prices and for seeing what the recent performance of other commodities might say about the market outlook going forward. Corn and soybeans can be found near the bottom of the performance list for all commodities since January 1st. December corn, down almost 20 percent, has just exceeded the 16 percent year-to-date loss for November beans. Spring wheat futures are off 17 percent, Chicago wheat down 16 percent, and Kansas City lower by 12 percent.   One of the few commodities down as much as corn for the year is natural gas. Bearish talking points have lately included that U.S. natural gas inventories are near record highs and could swell further if an election victory for President Trump leads to expansion of oil drilling and fracking.   Consideration of hedging natural gas needs for the fall has been discussed because of natural gas prices being down some 20 percent since the start of the year with nearby futures that are only one-fifth of what they were trading at when they made their recent highs in 2022.   There was a sharp selloff early on Friday for gold, which put a dent in the metal's gains for the year. Still up almost 13 percent, gold's upside has not fully matched the 18 percent rally for silver. Both metals have benefitted from shifting interest rate ...
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  • 07/19/2024 Cattle on Feed Friday
    Justin McKinney in for Dan Manternach who is on vacation On the Grains The row crop complex is slightly higher overnight in light of outside markets getting rocked. Gold down 41, Platinum down 22 and Silver working down 85 cents on profit taking. Crude Oil also off 25t cents this morning, which isn’t nearly as bad as I thought it would be after last night’s Republican nomination speech by former President Trump. Chinese economic problems continue to weigh on demand. On the wheat, Minneapolis continues to grind higher and support the SRW and the KC contracts as we do have some less than ideal weather creeping in Ukraine and Argentina coupled with robust export sales from the United States. Yesterday’s report had us with another 518,000 MT sold. On the Hogs: Yesterday’s Hog trade was encouraging, while we didn’t set any records, and closed slightly lower in the front month it was positive to see that, fingers crossed, we see a higher weekly close on the charts. Anything of positive news in the pork complex is welcomed as the last year of equity burns. Here are Thursday's stats: Thursday Carcass-based Hog Prices AMS range rptd: $74 to $88.00 (steady to $1 higher) * AMS Natl avg:   $85.39 (+0.31) * IA/MN avg:      $86.16 (+1.14) * W. Corn Belt:   $85.76 (+0.40) * E. Corn Belt:   NA ($83.34 Wed.) Thursday Daily Hog Slaughter * 07/18/24: 475,000 HD * Week ago: 475,000 HD * Year ago: 476,000 HD Thursday Cutout Values * Midday Report:  $99.27 (+1.16) * AMS Closing:    $99.16 (+1.05) * Aug futures     $91.37 (-0.37) * Oct futures:    $74.02 (+0.35) Thursday Packer Margin Index ...
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  • 07/18/24 Afternoon CommStock Report – Not Happy About How China is Treating Us on Trade
    I was not thrilled when Syngenta sold out to China through ChemChina for $43 bln in 2017. Syngenta is a Swiss company that is a major pesticide and seed supplier to US and global farmers. China wanted to extend its reach into biotech and must have come to the conclusion that one way, other than stealing seed technology, was to buy it by buying a company like Syngenta. Frankly I am not a protectionist, but if there was a comparable alternative, I told my agronomists to avoid Syngenta if possible. I would rather do business with US companies.   Syngenta owns about 1500 acres of farmland in the US which they use for research and regulatory trials. That conflicts with resistance to foreign interests owning US land. They appear ready to force the sale of TikTok due to Chinese ownership. Smithfield Foods is also owned by Chinese interests. The hog market is not doing well and China has threatened retaliatory reduction of US pork purchases if more tariffs are enacted between the trade partners. We already have a trade deal, Phase II, but China failed to adhere to it.  The US meat industry would like a better trade agreement with China that means something to both parties. Syngenta falls into the same category. We drive by a Syngenta facility in Spencer every day on our way to work so the Chinese pretense here gets brought to mind on each trip. Syngenta, partnering with Pivot Point, took over the old but still serviceable ...
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  • 07/18/2024 Tar Spot on The Move
    On the Grains As of this time, 4:30 am, we have the overnight markets softer, corn down 3 and soybeans off 6-7, lacking conviction to follow yesterday’s gains. Corn traders have already put the +180 bpa corn in the bin and have disregarded the balance of the growing season. However, it may not all be done just yet, Tar Spot reports continue to come in from Illinois with the April planted corn being affected now. The yield reductions are well documented on Tar Spot with some reports of 60 bpa in severely affected areas. With its arrival being this early more than one application of fungicide may be needed to control or at least salvage the yield. So here were are, how many trips, how much money are we willing to put into this crop? I’d say in Illinois and east they will treat aggressively- west of the Mississippi River might be another story. Last year Iowa cranked out an impressive drought-stricken 201 bpa, Minnesota came in at 185, which was off 10 from 2022 and that seems like a stretch at this point for both states. Yesterday’s EIA ethanol report supported corn as we had a production of 1,106 mbd vs last week at 1,054 and mean while a stocks draw down of 443,000 barrels. Crude oil also saw solid gains after the release of the report, a drawdown of 4 million barrels. November soybeans continue to take the brunt of the selling pressure as we have only had two positive days ...
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  • 07/17/24 Afternoon CommStock Report – Brazil’s production area averages 5.4% year over year growth
    CONAB's July update left Brazil's 23/24 soybean crop estimate virtually unchanged.  Digging deeper into the numbers the total production acres continue to increase, however, they were offset by modest reductions to yield.  Soybean acres were set at 113.7 million compared to the US 24/25 season at 86.1 million.  Brazil's start to their planting season is still 2 months away, but we have already seen private estimates putting planted area at 117 million for their upcoming crop.  This would be a 2.9% boost over last season's production area and could potentially put Brazil soybean crop at 170 MMT.     While everyone seems to agree that land area growth in Brazil will be more modest going forward due to plunging commodity prices, the market will debate for some time by how much.  Since the year 2000, year over year growth for the Brazil soybean area has averaged 5.4%.  Production area rarely drops, with the last time being in the 2006/2007 season, falling 9.1% from the prior year.  That year, soybean prices fell from a high of $10.50 per bushel the year prior to $5.50.  We see a more modest increase in soybean acres from 1% to 2%, however we would point out that that 2% still amounts to a significant increase of 2.2 million acres as it is on top of twice as many acres as twenty years ago.   Most of the focus in the CONAB report fell on the corn production estimates as the harvest of the second crop of corn is on the ...
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  • 07/17/2024 Dow Sets Record
    Justin McKinney is in for Dan Manternach who is on vacation On the Grains Good morning subscribers, I have some huge shoes to fill while Dan and David are both off the rest of the week- I will do my best. As of this morning overnight markets are slightly higher on row crops and Wheat. Tuesday’s markets were on the rebound after some damaging Midwest storms. Finally, Chicago takes notice of what the Western Belt has been dealing with all year, hail, flooding, and several tornados running from central Iowa to Indiana. West of the Mississippi corn basis has been surprisingly firm and many processors are continuing to improve basis to encourage grain to move. While it serves no purpose to dispute the USDA stocks numbers, producers with grain that must move before fall should seriously be looking at putting offers in and taking advantage of those opportunities. Old crop soybeans are finally getting a shot in the arm as we saw bull spreading take place on Tuesday. As of writing this, it’s estimated that the US gulf is 25 cents per bushel cheaper on FOB values than Brazil. With the favorable currency exchange rate it’s quite possible that the Brazilians have sold what they want to move for now. FOB values are the truest form of what actually was produced and often a leading indicator of futures direction long before government agencies make adjustments to the supply side of the balance sheet. It’s now or never on soybean exports- awaiting for ...
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  • 07/16/24 Afternoon CommStock Report – Working Hard Toward Reaching Breakeven
    Remnants of hurricane Beryl picked a very fortuitous route up into the heartland watering IL and much of IN. Some SE OH farmers were mostly still left out but rain chances continue. It was a timely rain for the many who got it who needed it. It is mid-season with no threat to corn pollination with many in the trade thinking the USDA may increase corn and soybean yields in future reports. The flooded NW CB is drying out but the damage has been done as wet conditions prolonged to make much water damage done to crops irreversible. A lot of new drainage tile was buried in this flood region following 1993 that served well until the record flood of 2024. Two months of all-time record rainfall was just too much and field drainage systems were overwhelmed. Rivers have to go down before tile systems can fully work. Hail damage done recently to SE NE was a large enough area to show up on satellite maps. I would trade them a flood for hail as my hail insurance coverage adds up to more dollars. We had a record hail storm here but it came before crops had been planted. We have a new roof and skylights on the Royal Iowa office.   There are still areas in the NW and WCB where corn stocks have been tight and given another short crop will remain tight into 2025. The surplus will be east of the Mississippi positioned to supply exports when exports suck. ...
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  • 07/16/2024 CBOT Commodities are Leading Deflation
    David Kruse in for Dan Manternach who is on vacation CBOT markets are higher in the overnight session for a turnaround Tuesday after getting hammered Monday. The Japanese Central Bank has intervened to support the yen with not much to show for it as the dollar remains strong. China failed to reach its annual 5.1% growth target at 4.7% last quarter with deflation evidenced. The poor Chinese economic performance weighed on crude oil. J.D. Vance, added to the GOP ticket, is considered to be hard on China. There is that 6 letter dirty word weather event again…’Derecho’! This time it blew across extreme E IA, S WI, N IL and NW IN with some 100 mph winds. It is not the best way to get rain as Derechos subtract more than add to production. On the Grains It would appear that grain and soybean markets are making an overweight contribution to reducing inflation. Fed Chairman Jerome Powell is very pleased with the FED policy results trying to land inflation, now 2.5%, without tanking the economy. Can cattle, crude oil and cotton buck the deflationary commodity trend?  The funds are piling on with CBOT shorts as yet undeterred by their record short position. Farmers are caught long in the bin and the trade perception is that there will be forced sales eventually as farmers need the bins for new crop. We sold out of corn but still have soybeans. Looks like they will have to sink below underwater below $10 before they can buoy back ...
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  • 07/15/24 Afternoon CommStock Report – Ernie Sends His Warning!
    Creighton University Economist Ernie Goss is bearish…just about everything. Consumer spending drives US economic growth and Goss believes that we have reached a tipping point where US consumer spending is beginning a contraction. The $trillions in fiscal stimulus of Covid Aid and Inflation Reduction Act has about ran its course. He said that after being adjusted for inflation that spending growth was not as strong as it appeared. He tracks a 10 State Main Street and Ag economic bankers, small business and manufacturing survey that we regularly share in this report and he sees the regional economy slowing. He thinks that growth for the rest of the country is slowing too and that a recession lies ahead. He is not in the camp for a soft landing. Commercial real estate is in recession. Goss says that falling home prices in Florida and other bellwether real estate markets are showing weakness that will expand to the general home real estate market soon. He says that in this key bell-whether market, home offerings are increasing and prices are weakening (15%). Goss says that it was taking 40-45% of consumer incomes to service mortgages and that property taxes, upkeep and rising insurance costs was making new homes unaffordable. At current home prices and today's interest rates, 40% of US homeowners could not afford to buy the home they live in if buying today. Goss said that the farmland market had stalled and flattened and expected weakness lies ahead.   I think that the jobs report ...
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  • 07/15/2024 2023 Old Crop Corn Sales Wrapped Up
    On the Grains Remember that the corn market bounced high a few times the summer/fall of 1993 nut did not trend higher until the November reports. Commercials still want to steal old crop and they have had funds helping them.   Valero pushed their cash corn bid here to $4.50 last Friday for delivery by July 31 which coincided with our sales recco. We had clients sweep the bin. Their bid fell back to 4.44 at Fridays close. WCB basis is much better than ECB for corn but it is the opposite for soybeans. I expect that is going to continue into 2025 as WCB crops are weather impaired and ECB crop are not. Economist Scott Irwin told the Commstock Channel that the IL crops are the best that he has ever seen. Central Iowa is pretty fantastic too. If USDA is to be believed, basis is good because of tight farmer holding. That will last until end-users buy that last bushel that they think gets them to new crop. Remember that we had 2-3 agronomically timed different crops here this year because of extended planting windows. That will drag out pollination of this crop accordingly. The corn planted in April will be the early one of the harvests, giving end-users new crop supply. Corn planted in June needs an extended first frost date.
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  • 07/14/2024 Sunday Market Preview
    Grains are called steady to slightly firmer at the open. Traders will have a full session to continue digesting the crop reports from Friday. In the Headlines September corn futures fell 8 1/2 cents last week. August beans were down 61 1/4. September Chicago wheat futures dropped 21 1/2 cents. Sep KC wheat futures were lower by 31 1/4 cents. August live cattle closed the week down by $4.05 while August feeders were down $2.82. August lean hogs were down 72 cents. Traders were preparing to react to the weekend news about the assassination attempt against President Trump, with markets expected to price in higher odds of a Trump election win while also reflecting elevated global security risks. The dollar fell sharply against the Japanese yen last week following data on U.S. inflation that made investors more confident that the Federal Reserve will cut interest rates in September. Japanese policymakers saw the shift in U.S. interest rate expectations and jumped in to buy the yen, spending an estimated $20 billion. The yen was previously trading at an almost four-decade low against the dollar. A stronger yen/weaker dollar relationship could support U.S. grain export potential. Japan has already imported about 43 percent more U.S. corn this year than a year ago. Last week's export sales report showed the first Chinese purchase of U.S. soybeans for new-crop delivery. Old-crop sales to China are down sharply this year, but China still accounts for about 58 percent of all U.S. soybean exports through the last 10 months of the ...
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  • 07/12/24 Afternoon CommStock Report – Crop Reports Lean Bullish Corn, Neutral Beans, Bearish Wheat
    The bullish report surprise was that the old-crop corn carryout estimate dropped back below 2 billion bushels. Coming in about 9 percent below the average trade guess, 2024 corn ending stocks were cut against upward revisions made for exports and the feed-and-residual component. The residual was widely expected to fall in order to absorb the higher stocks found on the June report, so the usage increase could be any combination of influences from better than anticipated feed use to the quarterly stocks being counted too high.   It was unfortunately no surprise that the corn and soybean yield estimates were left untouched. The contention with the USDA not changing yields this month is that it seems to be based on discretion rather than statistics. Notes on the USDA balance sheets say that the yield is a "weather-adjusted trend" that assumes "normal summer growing season weather and planting progress." Does that imply the view that weather and planting progress has been "normal" enough this season to not even trigger a fractional change in the output of the statistical model? Last year in July the USDA analysts dropped corn yield "to reflect extreme dryness during June," so we know that they had the framework to incorporate recent weather issues into the production estimates.   The lower than expected old-crop corn carryout helped offset higher acreage that came from the June 28 report. New-crop corn ending stocks were also pulled down by better usage forecasts for exports and the feed-and-residual. 2025 corn ending stocks of 2.097 billion ...
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  • 07/12/2024 Morning Trade Will Be Mostly Positioning for Major Reports from USDA at 11AM
    On the Grains: Grains are giving back yesterday's gains in weaker overnight trade as of 6am. Wheat was the leader yesterday on a mixture of drivers. Production estimates for the EU continue to fall, Argentine wheat is under stress and there was a report that Ukraine had seized a vessel carrying grain Russia had "looted" from Ukraine. That's been an ongoing story but this was the first time Ukraine had actually seized a ship carrying pilfered grain and immediately led to worries Russia would somehow step up disruption of Ukraine's grain shipments.   The big news today, of course will be release of the July Crop Report and WASDE updates at 11am. We had more detail on trade expectations in yesterday's AM report but this morning will focus only on the most market-sensitive numbers: Changes in estimated ending stocks. That's the first number everybody looks at as the balance sheets come out. For U.S. ending stocks, the trade is expecting corn stocks to rise 177 million bu. to 2.279 but the range of guesses is huge, from as low as 2 billion to as high as 2.454.
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  • Afternoon CommStock Report 07/11/2024 Key-Fob and Other Illusions
    Key-Fob and Other Illusions   I am going to call this a novel as while the story is true some of the specifics rhyme with the actual events to protect anonymity and confidentiality. It is a story about testing out how good your insurance is. It is a story about how vulnerable that we have become to technology when used as a criminal art. It is a story about how we think ourselves and our property to be safe when that can be an illusion.   Let’s dive in. There are a lot of folks in the Midwest who every winter earn the moniker of being “snowbirds” who move south for the cold months migrating back to their Midwest home in the spring. Many are farmers who move back and forth with the seasons. A couple of these snowbirds spent the winter in Arizona. They bring their home computers with them and do their farms records during their winter solstice down South. They started home this spring as usual and took a route through Texas. They decided to split up the drive and spend a night in a motel in San Antonio. After a day’s driving they both got out of their vehicle to stretch their legs to check into the motel. They drive a nice SUV and locked the doors with their key FOB when going into the motel office. When they came back out their SUV was gone. Dumbfounded as to how that could happen so quickly and brazenly in the short ...
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  • 07/11/2024 Today’s Trade Largely “Positioning” in Light of Wide Ranging Estimates for Friday WASDE
    On the Grains Grains are firmer in overnight trade as of 6am. It may well be the heavy pounding they've taken so far this week has adequately discounted the improved weather spun off by Hurricane Beryl and so today we'll have some "evening up" in trade ahead of tomorrow's big reports. The market obviously thinks yield losses tied to flooding in the upper Corn Belt have been overplayed, but ethanol refiners don't. We've seen the national average corn basis climb a penny a day for three straight days and at a Valero plant in Hartley, IA basis jumped 7 cents yesterday alone.   Speaking of board risk, we have the averages and ranges of trade estimates for key metrics in tomorrow's WASDE. Looking first at trade thinking on corn production, the average trade estimate for yield is actually down 6/10ths of a bushel from June, and they range from unchanged to down 3 bushels. However, the higher-than-expected June 1 stocks and June acreage still have production rising by an average guesstimate of 156 million bushels compared to June.
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  • 07/10/24 Afternoon CommStock Report – Yield Adjustment Necessary But Could Take USDA Months
    The acreage report scenario made for a much more challenging argument to a change in market sentiment.  By using the most recent acres for corn, we could see USDA report on July 12th come with ending stocks somewhere in the neighborhood of 2.35 billion bushels.  While we believe a reduction in yield is warranted, we don't believe the USDA will respond that quickly.  If the USDA were to leave harvested acres at 83.4 million and yield at 181 bpa, sub $4 corn will likely stick around for a while.   We believe a reduction in harvested acres is warranted considering all the flooding taking place in the upper Northwest Corn Belt.  We have seen estimates as high as 1 million acres have been flooded out.  There will be a lot of fields with 200+ bpa APH that yield 150 bpa or less this year as well.  While a strong performance from the Eastern half of the Corn Belt will go a long way to offset this, we still have a hard time believing we are destined for a new record yield.  By reducing yield to last year's record of 177.3 bpa, and taking into account flooded acres, that brings ending stocks down to 2 billion bushels, not far from where we were a couple of weeks ago before the acreage report.  This isn't great, but it is a better scenario than the one currently facing us.  It would provide support for corn to stay above $4.   We are aware that that in itself ...
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  • 07/10/2024 Spinoff Rains from Hurricane Beryl Blowing Away Weather Worries for ECB
    On the Grains Grain prices are steady to mixed as of 6am as we await trade estimates for Friday's crop reports and WASDE updates. We'll have them by tomorrow. As highlighted in yesterday's chat with Nutrien Ag Solution's top meteorologist Eric Snodgrass by Commstock Channel host Marlin Bohling, Hurricane Beryl has proven somewhat of a "Black Swan" event. It has disrupted prior forecasts, spinning off more than expected rainfall sweeping NE from Texas through Missouri, the mid-South and much of the Eastern Corn Belt that welcomed it.   While we could still see conditions suddenly turn hot and dry for beans in August, as currently forecasted by CPC, it looks like key corn pollination season from now through the end of the month is going to be just fine. Market sentiment based on strong crop condition ratings is that there's no chance USDA will trim its yield estimates in Friday's report despite all the soggy ground woes in the northern Corn Belt. While we still think harvested acreage will drop by a million to 1.5 million acres "eventually", that won't show up until after FSA acreage certification in August at the earliest. That's also when we'll get the first crop estimates based on actual field checks to ascertain yield.
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  • 07/09/24 Afternoon CommStock Report – Spencer’s Character is Being Tested by a Flood
    Flood waters are slowly going down in this region and people are starting to get back into their homes to access the damage. The media reports that 2500 homes have been damaged and 1000 homes in Spencer Iowa have been examined and deemed inhabitable by authorities due to their structural damage. There are many things that folks have learned the hard way about how to handle flooding. One lesson is to not pump the water out too fast. There is pressure inside and outside of the basement walls when flooded and when they pump the water out too quickly that pressure does not have time to equalize and the foundation caves in. I am going to assume that some of these homes may yet be repairable but without insurance coverage the owner will have to pay for it. I have no idea how much that FEMA may help with such a cost. Some of these families who have lost homes will just move away. If the water in the basement came as a result of the sewer backing up there should be less structural damage and homeowners' insurance may then pay for it. There are some real sad stories of some young families with mortgages losing both autos and their homes who are not insured. Others who may have had their homes paid for may have to pay for it again if repairable. Then there are the few that lost both their businesses and their homes. Demographics play into decisions. ...
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  • 07/09/2024 Grains Steady Overnight Despite Slightly Better Than Expected Crop Ratings
    On the Grains Grains are mildly mixed in overnight trade as of 6am. Yesterday traders pretty much ignored the phenomenal weekly export inspections for corn that were up sharply from the week before because last week's new export sales didn't even make the low end of expectations.  They also ignored last week's new wheat sales that exceeded the top end of expectations.   The bogeymen were the holiday delayed Commitments of Traders reports showing funds still very aggressive sellers, adding to an already large net short positions, particularly in corn. They sold nearly 59,000 more contracts through last Tuesday, taking the collective short position to the biggest of the year just shy of 337,000 contracts. The only exception was soybean oil. There, they actually reduced their huge net short position by more than 46,000 contracts and were still short nearly 62,000 contracts through last Tuesday. Given that sky-rocket move in SBO last week, they surely contributed with more short-covering.  
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  • 07/08/24 Afternoon CommStock Report – Why it Takes USDA so Long to Become Bullish
    Many in the trade are still using a trendline corn yield of 181 bpa or higher and will do so until the USDA tells them different.  They will also use the 91.5 mln planted acres from the June Planted Acreage report, up 1.5 mln from March intentions. They will also add 100 mln bushels or so found in the quarterly stocks report to the carry in as well. More acres and more stocks will have created an additional 300 mln bushels more supply that is likely to get reflected in the July WASDE report making it unlikely to do anything other than confirm the bearishness. Cheaper prices help demand so they should adjust for some improvement in consumption but nowhere near enough to offset the increased supply. Their projected carryover will be likely to increase by 200 mln bushels. It is also very likely that most of the 1.5 mln acres that USDA added to US corn production in their June acreage report, if planted, were washed away in our 2024 flooding but USDA will add them to their July WASDE balance sheet calculation first and it may take until November for them to be subtracted again. That is as soon as they typically adjust acres. Some corn acres may have been deleted by the lateness of the planting season and the other downward adjustment will come in harvested versus planted acres to account for the flooded acres that will not be harvested. The 1.5 mln added planted acres will ...
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  • 07/08/2024 Wild Weekend Weather, But July Outlook Now Seen More Helpful than Harmful
    On the Grains Grains are lower across the board in overnight trade. Weekend weather included nasty hailstorms over much of the western Corn Belt and the Gulf hurricane hitting landfall in Texas this morning is raising some threat to cotton and rice but mostly welcome spinoff rainfall across the south and eastern Corn Belt.   Meanwhile, warmer and drier weather is expected for the soggy northern Corn Belt and the trade is reading the net outlook as bearish. I was struck by how much of the end-of-week commentary credited "tight farmer holding" of remaining old crop and firming basis for last week's strength. The harsh reality is that it's mid-July and the window for moving those stocks to meet cash flow needs and make room for new crop is closing.
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  • 07/07/2024
    Grains look to follow through on a strong finish last week, with activity likely to increase this week following Monday releases of the Crop Progress report and traders positions data, and leading into the Friday crop production and WASDE reports. In the Headlines September corn futures held onto a gain of 3 cents last week. August beans were up 32 3/4. September Chicago wheat futures were up 17 cents. Sep KC wheat futures were higher by 12 3/4 cents. August live cattle closed the week higher by $1 while August feeders were up $2.17. August lean hogs were down 32 cents. The short holiday week was very lightly traded. Friday's total corn volume was about 230,000 contracts versus almost 862,000 contracts traded on the June 28 report day. This week's volume should grow approaching the next crop report coming on Friday. Open interest has been relatively flat over the last month or so while it is being watched for what changes in open interest say about items like the attitude of the speculator and the flows of farmer selling. July 12 will feature the next crop production and WASDE reports. The crop production update will provide new yield estimates for each wheat class. The WASDE report will incorporate the stocks and acreage estimates from June 28. There are no yield surveys conducted for corn and soybeans, but the trend yield estimates can change based on planting delays and extreme weather anomalies in June. South American production estimates will attract attention again on this next crop ...
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  • 07/05/24 Afternoon CommStock Report – How Does Current Midwest Flooding Compare to 1993?
    There have been many comparisons to the historical flooding taking place in the Northwest Corn Belt and how it compares to the infamous flooding in 1993. I am old enough to remember the flood damage it caused, but I had to rely on some of the CommStock analysts with "grey hair" to provide more context. 1993 flooding was worse in that it was more widespread. It extended from Kansas all the way over to Southern Illinois. CommStock Channel host Marlin Bohling, who farmed in Kansas at that time, said he never forgot how the temperature never got above 90 degrees all season in a region known for triple digit heat. He said the state seemed to be in a perpetual state of fog. The lack of sunlight and subsequent photosynthesis effected yields.   On the other side of the Corn Belt, heavy rain stressed dam infrastructure. One story that resonated with me was how the levee in Saint Genevieve, IL along the Mississippi River was built 50 feet high, more than was deemed necessary at the time of construction. When the flooding was over, water levels reached 49.5 feet, narrowly avoiding disaster by a mere six inches.   While the overall crop impacts this year might not be as bad as 93, I believe it is worse for those areas that fall in the epicenter. Yield potential has increased greatly since 1993 where losing 20% of your yield meant losing 30 bpa…today it is more like 50 bpa or more. I don't recall cities ...
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  • 07/05/2024 Little Weather Threat in New 6-10 Day Forecasts Likely to Keep Grains on the Defensive
    On the Grains With no overnight trading due to the holiday, markets will just pick up where they left off at Wednesday's close. They will likely start off on the defensive since it's still first and foremost a "weather market" and yesterday's 6-10 day outlook appears to offer both extremes for corn and soybeans what they most need, warmer and drier for the upper Corn Belt trying desperately to dry out so that soggy soils can "breathe" again while offering normal to better-than-normal rain for the Eastern Corn Belt and the southern half of the country from Texas to the Atlantic coast. It's less favorable for the Northern Plains to the Pacific. It will be both hot and dry so irrigation rigs will need to run full tilt and dryland corn and beans could be stressed. It's particularly ominous for spring wheat country so that could help lend support to the wheat complex today. Globally-speaking, the weather outlook varies. Heat and dryness are expanding again through eastern Ukraine and southern Russia over the next 10 days, but early yield reports from Russia keep coming in "better than expected" with nebulous meaning because nobody really knows "what was expected." There are still dryness problems for Argentina's new wheat crop trying to get established, but showers continue to improve the outlook for Australia and one of our private contacts there has raised their own estimate to a million tonnes above USDA's last estimate. We should get weekly export sales today, but due to the holiday our ...
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