BASIC & RECENT MARKET INFO

S&P Futures We have often mentioned that selling cash corn, beans, or wheat and replacing it with a futures or options position of that same commodity often is not the best strategy at the time.       The reason to re-own a commodity is to make money. Often, the best opportunity, the best risk/reward ratio to make money with futures or options is with a different commodity than the commodity just sold.   We have clients who bought cocoa puts in the spring, wheat puts in May,

Highlights The USDA lowered old corn carryout 120 million bushels below the lowest estimate by increasing feed use and exports both by 75 million bushels each. Old crop corn imports were increased by 5 million so the carryout was lowered by 145 million to 1,877 million bushels.   New crop corn feed demand was also increased by 75 million bushels and exports were increased 25 million. The new crop production increase of 240 million bushels from additional corn acres was more t

Highlights Dr. Cordonnier left his yield and production estimates unchanged for US corn and beans.   French Ag ministry first production estimate of the year say's France's wheat production will be 15% less than a year ago due to poor weather.   Federal Reserve Chairman Jerome Powell said in remarks to Congress yesterday the U.S. is "no longer an overheated economy" as the job market has cooled and in many ways is back where it was before the health crisis.   Powell told the

Highlights Eduardo Vanin reported Sunday grain export traders in Brazil are planning to extend the soybean export program through July, and possibly into August because farmers are selling very little corn, but they are selling enough soybeans to load some ships. Kory Melby expects Brazil will soon be out of beans.   Argentine farmers’ soybean sales stalled in June, the head of the country’s crushing and export chamber (CIARA-CEC) told Reuters, down 45% from May’s sales as a

Analysis of Friday’s Carnage Benson Quinn Commodities said the biggest surprise on Friday was USDA apparently delaying release with no warning. If the report was delayed and no one knew the numbers, why was corn down 19¢ and beans up 7¢ when the report was released?   As we reported yesterday, the USDA said there were 3.36 million acres of corn and 12.767 million acres of beans left to be planted when USDA completed their survey. What we did not see was a note in the fine pri

Highlights The USDA reports were to be released at 11 AM Central Time yesterday. That was when corn started going down and beans began moving higher. Traffic on the USDA website at report release time is so heavy, us peons must wait a few minutes to access the report. Yesterday, we waited 10 to 12 minutes as corn continued to fall. That is when the USDA issued a statement on its website that technical difficulties led to a delay in the report being released.   What did that m

Highlights Yesterday morning, CONAB reduced their Brazilian soybean crop estimate 330,000 mts to 147.35 mil. (USDA at 153, down 1 mil.), but increased Brazil’s corn production by 2.5 mil. mts to 114.14 mil. mts (USDA at 122, unchanged).   Cash grain export trader for Agrinvest, Eduardo Vanin, said Thursday: The Brazil corn program is significantly smaller than last year. The corn program last year experienced a significant (export)  surge during JAS  (July, August, September)

Highlights If you have soft red winter wheat to deliver this summer, you need to set the basis about three weeks before harvest starts in your area. Historically, that is when the basis is as firm as it will get.     Soft red winter July wheat ended Friday at a one month low of $6.27½. All SRW wheat trading volume was a one month high of 280,935 contracts, with July seeing a heavy 131,164 contracts traded. Heavy trading volume on a down day for prices is an indication of stro

Highlights Yesterday, OPEC+ extended its “voluntary” production cuts through 2025 with the exception of the UAE. Thus, the UAE will increase production by 300,000 barrels per day from January 2025 and all OPEC+ quota will be 39.725 million barrels per day. The increase will be carried out in stages, from January 2025 and until the end of September 2025.   Multiple countries in Asia will report today their manufacturing purchasing managers index (PMI) for the continent's bigge

Highlights The USA GDP for the first quarter was reported at 1.3% versus 1.2% estimate. Jobless claims were 219,000 to 218,000 expected with the previous week revised up to 216,000. Goods trade balance was deficit $99.4 billion vs. $91.8 billion estimate. Goods and services combined balance is a bit better, but consistently negative since the 90s, meaning US imports more than it exports, and that is one of the reasons the national debt is ever rising. A Federal Reserve “chit-

Highlights We had good news about the US economy yesterday morning. S&P Global (an independent agency) reported yesterday morning that its U.S. Composite PMI Output Index, which tracks both the manufacturing and services sectors, jumped to 54.4 this month. That is the highest level since April 2022 and well above 51.3 in April 2024.   A reading above 50 indicates economic expansion. Economists polled by Reuters had forecast the index little changed at 51.1. The sharp increase

Highlights Between October and January are the traditional months the U.S. dominates sourcing soybeans to China. However, this marketing year, 46% were from Brazil, up from 29% two years earlier. The two primary reasons are Brazil’s soybean production and storage capacity is growing faster than Chinese demand for soybeans and the U.S. and China trade and political relationships have been in down-trend ever since Biden refused to reduce or remove Trump’s tariffs on most Chines

Fees As prices have firmed since February 26th, many of our clients have had conversations with merchandisers about marketing tools. From Nebraska to Upstate New York, there has been a big move to add or increase fees to initiate HTA contracts. For many years, some merchandisers had a service fee of 1 to 4¢ per bushel for HTA contracts. Many merchandisers who never charged HTA fees in the past are now and many of those who had been charging HTA fees upped the fees to as much

Highlights The Fed left rates unchanged at 5.5%. Fed Chair Jerome Powell said an interest rate hike was "unlikely" and that his baseline scenario is still for inflation to cool and pave the way for lower interest rates. There will be some “quantitative easing” starting in June, meaning some movement to increase the money supply. As we expected, the Fed will not make a serious effort to get inflation lower in the Presidential election year.         The USDA crush report for Ma

Highlights The Commerce Department said yesterday morning the US economy’s gross domestic product increased at a 1.6% annualized rate in the first quarter of 2024, less than half the growth rate of the 4th quarter of 2023. The market expected a 2.4% growth rate.     The first quarter growth's pace was below what the Federal Reserve regards as non-inflationary growth rate of 1.8%.  It was the poorest GDP since the recession ended after the first two quarters of 2022. This GDP

Highlights Water rationing is becoming more frequent in the Corn Belt. On Friday, the Poweshiek Water Association, one county west of Iowa City, issued that crop sprayers cannot be filled from its rural water system until further notice. Thanks Josh for this.   https://www.poweshiekwater.com    There is a rising tide of protectionism threatening to become a full-blown trade war between China and Europe, the head of a European business lobby group warned Friday.   Biden’s thre

Highlights The dollar index traded to 106.57 on Tuesday. Last Friday, the dollar index was at 104.30. In the world of exchange rates and commodity prices, that 2.27 point move in two days is a minor earthquake and it did damage to your operation.   The first week of January, the dollar index was 101.38 and it took 4.85 Brazilian Real to buy a US dollar. If soybeans were $11 a bushel, a Brazilian farmer would be paid 53.35 Reals per bushel. On April 9th, the same $11 beans wou

Wheat Market Comments We have often quoted Kevin Duling, a market advisor and wheat producer from Maupin, Oregon, who has the best perspective of the US wheat markets and probably the best perspective for the world wheat market. He would welcome your questions and information about his service at Oregon (kdinvestors at gmail.com, 541 980 4554). Here is information he sent his clients after Thursday’s USDA reports (spelling retained):    Annual sales timing history:   I went t

Highlights The US stock markets took a thumping yesterday as JPMorgan and Wells Fargo both reported net interest income well below analysts’ estimates. JPMorgan interest income was less than the previous quarter for the first time in almost three years and its shares had the largest decline since 2020.   Two weeks ago, the Buenos Aires Grain Exchange (BAGE) reduced their Argentine corn production estimate by 2 mil. mts. Yesterday, BAGE whacked another 2.5 mil. mts, down to 49

Tidbits Yesterday morning, the US Bureau of Labor Statistics reported inflation at the wholesale level in March was up 0.2%; the market was expecting the Producer Price Index (PPI) to be up 0.3%. However, there is a credibility problem.   What would you say gasoline prices did in March? Yep, the American Automobile Association (Triple A) reported the price of gasoline in March increased 6.3%. However, the gasoline component of the government’s PPI reported the "seasonally adj