BASIC & RECENT MARKET INFO

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

Market Comment The USDA will issue its April S&D today at 10 AM Mountain time. Given the March inventory of corn, we already know feed use this past winter was stronger than USDA expected. We already know from weekly numbers that the corn for ethanol crush and corn exports are running stronger than USDA projected for the year. But will USDA reduce the corn carryover below 2 billion bushels, as they should, based on the numbers we already know? Probably not.   The average esti

Carbon Cycle, Credits & Intensity Sharon asked Roger to share his thoughts on carbon credits.   From the time I was in elementary science class through soil science courses at Colorado State and Ohio State, I was taught there is a carbon cycle. Every living thing contains carbon. Organic matter is anything that is alive or was alive.   Animals and humans release carbon into the atmosphere when they exhale their breath and pass gas. By the way, there were more buffalo passing

Tidbits Last night’s 6 to 10 day NOAA weather forecast is calling for above and much above normal temperatures in the Corn Belt spreading east on the 8 to 14 day forecast. Both forecasts are predicting above normal rainfall for the Corn Belt with much above normal rainfall in the Western Corn Belt.   The Commerce Department reported on Friday that consumer spending in February was rising by the fastest rate in just over a year. The United States economy continues to outperfor

Tidbits March U.S. manufacturing PMI (purchasing managers index) was better than expected at 52.5, services PMI was below expectation at 51.7, values above 50 imply expansion. Existing home sales were better than expected at 4.38 million. Jobless claims at 210k were less than expected.   Iowa is facing drought for the 4th year in a row. Today's drought monitor showed at least abnormally dry conditions with 23% for corn and 19% for beans. Seasonal outlooks, released by NOAA to

Highlights Presidential elections have begun in Russia, voting will last 3 days. There are 4 candidates running in the election. According to the latest data, the level of support for Putin before the election was 82%. Tidbits Allendale’s farmer survey has US plantings of: Corn at 93.5 mil acres, down 1.2% from 2023 (USDA 91.0) Soybeans at 85.8 mil acres, up 2.7% (USDA 87.5) Wheat at 47.6 mil acres, down 3.9% (USDA 47.0)   The Producer Price Index (PPI), the measure of inflat

First notice day for deliveries on March CBOT contracts is this Thursday, which is usually an up day for markets after (usually) a down day the previous day as all the holders of long positions in the March futures are liquidating to avoid being assigned bushels. Translation: Your futures broker and your merchandiser want you to price or roll all March long positions before the close tomorrow. Highlights More scuttlebutt Monday about the possibility of more corn exports to Ch

Tomorrow begins the third year of the Russian/Ukraine war and Russia is gaining momentum.   When the Japanese attacked the US Pacific Fleet at Pearl Harbor in 1941, the US not only lost half its navy, but it was woefully unprepared for a war whereas the Japanese military had been expanding its empire throughout China and Southeast Asia since 1931. It took the USA 3 years and 8 months to destroy the Japanese Empire despite placing a priority on the defeat of Nazi Germany ahead

Highlights European corn and wheat made new lows yesterday. Corn $4.29¼ per bushel and milling wheat $5.30 per bushel.   Yesterday afternoon, 247AG predicted Brazil will have a dry April; Eric Snodgrass said the same thing on 8 February. A dry April will be hard on the safrinha corn.         Eduardo Vanin with Agrinvest Marketing of Brazil shared these main points from a conference call discussion yesterday (19 Feb) with 78 Brazilian producers, agronomists, and input dealers

The CBOT will reopen Monday evening instead of Sunday evening  in observance of Presidents’ Day. Tidbits NOPA soybean crush in January 2024 was 185.78 mil bu of soybeans, a record large crush for any January and 3.8% more than a year ago. The market expected 189.928 mil bu.   Soy oil stocks at the end of January were 1.507 bil lbs, the largest end-month supply in six months and above market expectations of 1.409 bil lbs. However, and more importantly, the bean oil inventory w

Tidbits The S&P 500 finished above 5,000 for the first time yesterday. The S&P 500 was up 14 of the past 15 weeks and up more than 20% the past 15 weeks. That has never happened before with any stock index.   Weather guru Eric Snodgrass said Thursday his work indicates Brazil’s dry season will start in April this year instead of May as it normally does. This is in the area where the safrinha (second) corn crop is grown.        Eduardo Vanin, cash grain export trader in Brazil

Highlights Yesterday morning, old crop corn and beans did  make new lows for 2024, extending the down trend since the spring 21 months ago. New crop corn (Dec) and beans (Nov) did not  make new lows.   March corn and March soybeans made key reversals yesterday, which is a respected technical trend indicator. A key reversal occurs when a commodity (or stock) makes a new low, but the settlement price is higher than the previous day’s high. Before you mortgage your house and buy