Category: Ag Markets Update

FOR FRIDAY: (9/23) Not much really happened on Thursday to give us many new clues but we should continue to stay below highs put in on Wednesday and at some point a harvest break will come. Usually the Sept. stocks report is not very important and can’t think that the trade will be sideways a week waiting for it.

Downpours and flash flooding were reported in parts of northern Iowa and southern Minnesota overnight and more rain is due there the next few days. Clear skies east of there likely had combines in the fields. The seven-day and 6- to 10-day forecasts are wet for Iowa and Minnesota. This still may be too small an area to worry about. Trade waiting now for COF reports and quarterly hog and pig report on Sept. 30 so not much action coming there. Cold storage on Friday after the close may also release pent up energy. (For details and recommendations see our full Timer.)

FOR THURSDAY: (9/22) By Thursday we have a number of forces that should finally create a strong harvest reversal. Continue to accumulate shorts. Cattle could hold up 1 more days but feeders are struggling and we won’t sell Dec. hogs without a price completion. Rain continues to hinder the Midwest corn and soybean harvests with severe storms in Iowa and eastern Nebraska today and rain lingering there through Friday. The seven-day and 6- to 10-day are wet for the Midwest with the 6- to 10-day also showing above-normal temperatures there.

Outside markets were a little supportive with equities and crude oil higher and the dollar lower. The Federal Reserve said a rate increase was likely by the end of the year. It said the U.S. economy and job market are doing well. Crude oil got a lift from a weekly government report showing a drop in U.S. supplies.  (For details and recommendations see our full timer.)

FOR WEDNESDAY: (9/21) Grains could hold up one more day and rarely fall strongly on Wednesday. By Thursday we have a number of forces that should finally create a strong harvest reversal. Continue to accumulate shorts. Cattle should hold up 1-2 more days but feeders are struggling and not selling Dec. hogs without a price completion.

FOR TUESDAY: (9/20) Storms over the weekend focused on the southern half of the growing region, while rains early in the week return to the upper Midwest before another front moves in from the west. Maps for the next seven days keep the eastern Corn Belt mostly dry. Official 6- to 10 and 8- to 14-day forecasts out yesterday remain wet with a cooling trend in the west though the latest updates this morning are warmer for the period. Grain patterns to the upside would still look more complete if 342 on Dec. corn, 993 on Nov. beans at 416-8 on Dec. wheat came in. If you need to sell or hedge, we will hold out the next few days for those areas. Cattle should hold up a few more days and then congest into the COF report. Waiting for higher hog prices to be selling and that may take a few more days.

FOR MONDAY: (9/19) Corn and soybeans closed higher on Friday and wheat followed as a steady parade of rain showers in the Midwest raised concerns about harvest delays. The corn and soybeans still finished lower for the week as the market continues to price in the big crops that USDA had forecast on Monday. Short covering was likely in play ahead of the weekend and after the post-report losses. Rain moves across the Midwest the next few days. Both the seven-day outlook and the latest 6- to 10-day outlook favor rain for the Midwest, with the 6- to 10-day also showing above-normal temperatures. We expect short-covering to continue for a few more days and set up more sales and hedges. Cattle looks higher next week and hogs should be higher 1-2 more days and set up a sale.

FOR FRIDAY: (9/16) We did more cycle work and more likely to see grains lower on Friday and recovering Sunday/Monday and then generally lower much of next week. Given seasonals and harvest pressure, hard to see much of a rally coming the next few weeks. We would continue to favor shorts there. Rain moves across the Midwest this week with severe storms expected today in Nebraska. The seven-day outlook puts rain in the Midwest and the latest 6- to 10-day outlook favors hot weather there then and above-normal chances for rain.

FOR THURSDAY: (9/15) Rain this week may slow harvest and one forecast puts moderate rain amounts in the next week from Iowa to Indiana. USDA late on Monday said the national harvest was 5% done, with Illinois’ at 3% and Iowa’s at 1%. Illinois crop sources on Tuesday, said harvest should gain traction this week if fields stay dry. Winter wheat markets closed a few cents higher helped by the lower dollar. Forecasts keep rain in the central Plains this week, which should help the winter wheat that will be planted this fall. USDA on Monday said 6% of the winter wheat was planted as of Sunday, compared with 7% a year ago and the 7% average. Thursdays are often weak for grains and we should easily see 323 for Dec. corn.

FOR WEDNESDAY: (9/14) Deflation cycles are still at work this week for grains until at least Thursday with some short-covering possible on Friday. Hogs with new lows are in trouble for a few more days and we don’t think cattle are weak enough to get caught too short and will wait for an oversold condition to buy.

FOR TUESDAY: (9/13) Rain is moving across the Midwest this week with severe storms forecast for Nebraska and Iowa today. Concerns are that such weather could hurt the mature corn and soybeans. The 6- to 10-day outlook (Sept 17-21) favors rain in eastern half of the Midwest and dry conditions for the west. We generally favor lower grains into at least Thursday and aren’t in a rush to be buying until they are very oversold and now we are dealing with harvest pressure. Cattle look lower a few days and in case more happens, we should get short a bit and hogs look higher on Tuesday but then be in trouble.

FOR MONDAY: (9/12) Grains continued to short-cover before USDA report and are setting up a sale, as even a surprise report would lead to sell the overbought condition going into Sept. hedges. Continue to use strength to get rid of cash and hedge, as this market could quickly fall apart and now is getting a bit overbought. Cattle continue their volatile ways but think that Friday’s rally was a fake-out.