GRAINS MIXED BUT WELL OF LOWS
Overview
Overnight we saw some strength following yesterday's limit up action in the wheat. But then we eventually saw prices take a breather, as we didn’t get any further headlines or attacks on Ukraine which calmed the market down.
The lower prices was essentially a turnaround Tuesday to go along with some profit taking following yesterday's rally.
However, prices did bounce nicely off their early lows. As Chicago wheat bounced 24 cents off it's lows and managed to close green. Corn ended down just 3 cents and 11 cents off it's lows. Soybeans were taking it on the chin early, down 20 cents at one point, but rallied to close the day down just 4 1/2 cents. So ultimately not a terrible close. Although corn and beans did both fail to make new highs. Will have to see if we can carry that late strength into tomorrow.
Weather is still hot and dry for the most part, so that continues to look supportive.
We included this in yesterday's write up, the crop progress yesterday was on the friendly side of things. With corn being left unchanged. The trade estimates thought we would see improvement. Beans came in 1% lower than last week as well as the trade estimates. Spring wheat came 2% below last week and the estimates. Winter wheat harvest came in at 68% complete. This is behind our average pace of 77% and the 2nd slowest for this date only behind 1993. Will this have any impact on double crop bean acres?
With the current weather situation, I'd have to imagine we see these numbers come in slightly lower next week as well. We would love to see what you guys feel the hot weather is doing to your crop. Please email or text us with pictures and include your area.
We will have to see if the funds look to cover some of their shorts in corn and wheat. Unless we get some grain moving out of Ukraine or an improvement in the forecasts, I think we should be well supported.
Expect some heavy volatility with everything going on. Weather and war markets create emotional markets.
Recommendations?
The volatility has created a lot of opportunities to buy low and sell high. Lots of guys day trading are making 30 to 40 cents buying low and selling high. That is why we like having hedge accounts open. If you would like to open one, click here or give us a call (605)295-3100.
There is nothing wrong with putting in a floor and spending a little bit of money to get comfortable. We don't mind scaling into puts.
Over the last few days, I noticed some highly respected advisors such as VanTrump and Roach Ag have been making sales. So bottom line, several popular advisors have jumped on the bandwagon of making sales or buying puts. We prefer everybody be comfortable. We are more on the bullish bandwagon. But for guys that aren’t comfortable, here is an example of what we did for a client of ours that joined a few weeks ago to help tailor his situation to his needs.
Example:
We had this customer who wanted to make sales a couple weeks ago and was nervous that the market would keep going down, we talked him out of making sales and we bought 25% of his production in puts today with a plan on following up the next several days depending what mother nature and war does. So he raised his minimum price and put in a floor.
We are dealing with weather and war and the emotion that goes along with both of them. Do what makes you comfortable.
Sunflowers
With the Russia & Ukraine situation development, Banghart Properties has buyers starting to look for new crop sunflower offers. If you have any, please give Jeremey a call at (605)295-3100 or Wade at (605)870-0091
Today's Main Takeaways
Corn
Corn ends a volatility filled day down just 3 cents, after trading 14 cents lower at one point. As mentioned, mostly profit taking following the rally, as the market was somewhat disappointed that we didn’t get further escalations to the war overnight like some thought we could.
Corn is still up 84 cents from our lows just a few weeks ago even with the minor losses today.
There are two factors in the market right now with he potential to drive prices higher. War is the main factor driving wheat. Weather in the corn belt is the main factor driving soybeans. Both of these factors are driving corn.
Do the funds really want to step in here and add to their short position with the potential war lurking over their heads? As well as weather. One wouldn't think so, but it didn't stop them from pushing wheat into the ground the past year.
As mentioned, crop conditions yesterday came in unchanged. While getting worse in 11 of the top 18 corn producing states. When these numbers are plugged into Pro Farmer's Crop Index, this current crop is still 2.3% worse than last year. Yet the USDA still has corn yield 4.5 bushels an acre higher than last year. If we took this 2.3% off our last year's corn yield just for an example, that would bring us to 169 bushels an acre this year……
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Scroll to check out past updates you missed
INCLUDED TODAY
Where is corn yield at?
Should you be selling new crop under $6?
$15 dollar beans and managing risk
Is more upside in wheat still in the cards?
Recommendations for corn, beans, and wheat
Check Out Past Updates
7/24/23 - Market Update & Audio
WAR, WEATHER, & WHEAT LIMIT UP
Read More
7/24/23 - Audio
WAR & WEATHER SURGE GRAINS
7/23/23 - Weekly Grain Newsletter
ARE THE HIGHS IN?
7/21/23 - Market Update
RALLY TAKES A BREATHER
7/20/23 - Audio
BEING COMFORTABLE NO MATTER HOW THIS SHAKES OUT
7/19/23 - Market Update & Audio
THE RALLY CONTINUES
7/18/23 - Audio
WEATHER & WAR
7/17/23 - Market Update
RUSSIA EXITS GRAIN DEAL. BUY THE RUMOR SELL THE FACT
7/16/23 - Weekly Grain Newsletter
MANAGING THESE VOLATILE MARKETS
7/14/23 - Market Update