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Author Archives: Doug Redenius

AgriFinance Market Update 8/16/19

Today’s positive price action was a good way to end a rotten week.  Prices found strength on a technically oversold market and bottom picking.   Results of a digital crop survey and anticipation of the Pro Farmer tour also supported prices.  Nearby corn finished the day 10 cents higher.  Soybean futures closed 9 cents higher.  Chicago wheat settled 2 cents higher, and KC and MPLS futures finished up 3-4 cents.  The weekly scorecard wasn’t so pretty.   December corn lost 37 cents on the week. November soybean prices fell 12 cents for the week.   Livestock prices also took a beating.   We are glad to lay this week to rest.  Time to move forward.

The outside markets had a wild week between falling bond yields and concerns over the US-China trade war.     The DJIA closed up +306 points today, but is still lower on the week.  The dollar index was slightly higher.  Oil [ ]

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AgriFinance Market Update 7-12-19

Is the party just warming up or is it about over?  No one can give a correct answer at this point because there are too many variables to play out.   But, someone is nervous because December corn is less than 14 cents from contract highs.  November soybean futures are roughly 40 cents away from contract highs.  If there is a flip-flop in the weather forecasts over the weekend, expect strong downside pressure on prices as early as Sunday night.

Corn futures put in a spectacular day and week despite the bearish report yesterday.   Corn closed a dime higher, with futures up 15-17 cents on the week.  Soybean futures put in an impressive week technically.  Soybeans finished up 14 cents today, with a 34-37 cent weekly gain.   Wheat also had a great week despite harvest pressure.   Not a lot of action today with Chicago and MPLS futures finishing a penny higher and [ ]

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AgriFinance Market Update 6-28-19

The USDA threw the market for a loop today.   It didn’t end well for corn and wheat futures.  Some would describe the report as fake news, and that is being “nice”.   Real nice. The USDA released a negative corn acreage figure and friendly soybean number.  Wheat acreage was neutral.   Stocks came in under the trade guess,  but didn’t mean much given the bearishness of the corn acreage estimate. The market reaction was wild.  High frequency trading pushed corn prices up double digits and then down double digits in a blink of an eye.   We couldn’t pull the report up fast enough to see if it was bullish or bearish.  For a second, it was both!  We will give the Bears this inning, but the game is far from over.

By the closing bell, the damage was done.  Corn futures finished the day 20 cents lower, but off session lows by 4-5 [ ]

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AgriFinance Market Update 6-27-19

Farmer selling and fund liquidation ahead of potential fireworks were the features in the marketplace today.  FC Stone reported fund selling at 70 million bushels of corn, 40 million bushels of beans and 15 million bushels of wheat on the day.  Of course, the 4th of July is a week away, but tomorrow’s USDA reports and this weekend’s US/China trade talks should provide for a very interesting couple of days of trade activity!

July wheat was up more than a dime at the high today.  A brutal heat wave sweeping across Europe (including Russia) right now is impacting their crops.  Temperatures in the 90s and 100s are prevalent across the area.  Much of their wheat is in the heading stages and vulnerable.  The EU is expected to produce 5.65 billion bushels of wheat this year (about 3 times what we grow).  Throw in the Russian crop estimated at 2.9 billion and [ ]

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AgriFinance Market Update 6-20-19

Corn Hits A Five-Year High Before Slight Dip, Soybean Numbers At Concerning Level

Planting season is off to an interesting start. Excessive rain this spring has lead to lower than average planting numbers, especially for soybeans. While corn yield expectations continue to fall by the week the market pushes toward $5 corn, hitting a five-year high this week.

Planting Progress Remains Well Below Average

Earlier this week, the USDA released their planting progress numbers for corn. There is still an unprecedented number of acres that remain unplanted – 7.4 million acres in mid-June. In South Dakota alone, it is likely that up to 1.3 million acres will not get planted this season.

Soybean numbers are alarming too. A completion rate of 77% means that 19.5 million acres are yet to be planted. Based on price action, it seems the trade has turned their attention to soybean acres. Producers in IA, southern WI, northern [ ]

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What’s Your Target?

What’s Your Target?

When was the last time you played darts? OK, when was the last time you played darts blindfolded? The second game is a little more challenging because you may have no idea where your target is. But it’s a lot like the game some farmers play of trying to sell their crops into a market rally without knowing where profit resides for their operation. It’s difficult to know when to pull the trigger during the growing season if you don’t know where you will be able to profit.

I’ve heard some bankers say 80% of the farmers they work with don’t have a solid cost of production or a marketing plan. So if you’re ready to go with that, you’re in the minority.

In a recent webinar offered by Penton Agriculture, Purdue University Professor of Agricultural Economics, Michael Boehlje asked attendees about their cost of production for the upcoming growing [ ]

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Profit Watch Commentary – January 3, 2014

We will finish the first week of 2014 with a double whammy – a plunge in prices and a plunge in temperatures. Records are expected to fall across the country as frigid temperatures move in from Canada. Northern Minnesota may see wind chills of -75 degrees on Sunday morning. Wind chills colder than 50 below can cause exposed flesh to freeze in only 5-10 minutes. This weekend is expected to be the longest sub-zero period in 18 years. Bundle up!
The snowstorm in Chicago and out East coupled with the holidays have affected trading volume this week. Hopefully next week everyone will be back to work.
Believe it or not, the big January Crop report is only one week away. Early next week, the trade will be releasing private trade guesses on production and carryout. Informa got ahead of the game, and released their best guess today. As per usual, their production [ ]

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Profit Watch Commentary – Dec. 13, 2013

TGIF.  The rally we had going to start the week got side-tracked.  March corn futures faded about 14 cents from yesterday’s high.  From Monday’s high to today’s low, March beans dropped 36 cents.  Old crop soybeans still managed small net gains on the week.  All corn and wheat contracts lost ground on the week.

Soybeans managed a respectable comeback into the closing bell today led by meal.  The spot basis levels for outbound meal have been rising rather significantly in recent weeks.  Slow farmer movement of beans into processors along with an anticipated uptick in demand were the bullish features in the soya complex this week.  Potential trouble ahead for DDG exports has the soybean trade thinking more meal may have to get into that pipeline.

Of course, the trouble we’re referring to is China having issues with a particular unapproved GMO trait showing up in boats at their ports. The issue [ ]

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Profit Watch Commentary – Nov. 22, 2013

The soybean market caught on fire today. January soybeans closed up 28 cents at $13.195, matching the previous high this month. New crop was up nearly 8 cents at $11.67. Unfortunately, corn and wheat failed to show up to the party. December corn settled slightly lower at $4.22. New crop corn was unchanged at $4.5775. December wheat closed slightly higher at $6.495. July wheat (vs Chicago) closed up 3 cents at $6.59.

Something really strange happened in the grain market this week – grain prices didn’t get beat up! Perhaps we have put in the seasonal low? Soybeans put in the best performance of the week with January futures gaining 39 cents. Wheat got in on the action, but with much smaller gains of a nickel. December corn futures were sharply unchanged.

Wall Street didn’t have a problem with gains this week, or for the past seven straight weeks if you care [ ]

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Profit Watch Commentary – Nov. 15, 2013

Ouch!  Soybeans got smacked today.  A disappointing weekly sales figure from USDA for soybeans and soybean oil greeted the trade first thing this morning.  Then, Informa reminded the world that U.S. producers are likely to plant a record number of soybean acres next year.  Finally, the EPA rolled out some negative news late in the session.  A proposed cut in the RFS mandate for bio-diesel hit the soybean market hard in the closing minutes.  The January bean contract was down more than 35 cents at the low of the day.  March corn was down 6 1/2 cents at the low as the news was bearish for ethanol as well.

Rumors have been swirling for at least a week that the EPA was going to make a major announcement about the Renewable Fuels Standard.  They did in fact roll out a proposal about 15 minutes before the session ended that (if approved) [ ]

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