Katie Geerdes

Soybean futures have trended weaker since the start of December following a rally of more than $1 over the previous two months. Bullish sentiment was tested by a string of days that produced no new reports of soybean exports sold to China. Finally, a flash sale popped up on Friday for soybeans to China, but selling pressure seemed to suggest the business was too little, too late. The soybean board fell right back into a test of the bearish head-and-shoulders pattern that coincides with important psychological support at $11-even. The reaction fit with a market that has bought the rumor and now sold the fact of disappointment with China, although verification of the technical breakdown waits for Sunday and Monday to see if bears seize the opportunity.   Farmers were observed to be more aggressive sellers of soybeans in November, many likely with the motivation of rewarding the rally while knowing that crop sales were a hedge against Chinese demand being a letdown. Some may now flip from being skeptical about Chinese trade follow-through to being bullish about that business picking up from here. If Chinese demand materializes in a bigger way, farmers should start to see firmer local basis…

Some have been surprised by the weakness seen in the crude oil market. Traders have unsuccessfully attempted to pick bottoms. I would wait until they have become exhausted and broke. No one in the oil business has cried "uncle" yet. That may take a while. Production is estimated to exceed consumption by 4 mln barrels per day which will not improve if the economy slows. The real economy is slowing. A global slowdown could take a barrel of crude oil to the $30's. President Trump says he wants gas prices at $2 a gallon. It appears to be on its way there. I filled with E-30 locally this week for $2.29 a gallon, the lowest price in my memory. Actually, not true…the lowest price in my memory was 19 cents a gallon in 1972 at Kerr Megee and you also got stamps to collect for glassware but that was a different time.   Oil market weakness is the result of sustained global production driven by cash flow needs of major producers while consumption is declining. 60% of new vehicles sold in China are EVs this year. They want to export their cost of production advantage and expanding global EV market…

Brazil's 25/26 soybean planting season is on the final stretch, with remaining areas in RGDS and the Northeast expected to finish in the next ten days. Meanwhile, earlier planted soybeans in parts of Mato Grosso and Parana are already beginning to set their pods. Rainfall will be critical in the month of December for grain fill in these areas. The northern tier of Brazil continues to receive abundant rainfall covering Mato Grosso, Goiás, Minas Gerais and the MAPITOBA region. Mato Grosso do Sul and Parana have been receiving scattered showers from 0" to 2". The forecast shows general precipitation filling in any remaining dry pockets, but it has been showing that for a couple of weeks only for it to continue to remain in the "scattered shower mode".   The dry pattern in Southern Brazil has been well telegraphed at this point. We do see a weather front bringing in a couple of inches mid-December from Argentina over portions of RGDS. This will be important but may not be enough to prevent yield loss. Dry weather anomalies stick to Southern Brazil until the end of the year. If they last much longer than that, rapid yield loss may occur. Overall,…

There is a huge difference between having pride and being arrogant. I have pride in the US military. I appreciate and thank Veterans for their service. My dad's old uniform with his 4rth Infantry Division insignia hangs in my open closet where I can see it every day. An uncle who served 28 years in the US AirForce was my childhood idol. Nothing wrong with pride. Nothing wrong with self-confidence that accompanies pride. Arrogance is dangerous. The arrogant tend to be careless and their judgement clouded by hubris. Being arrogant is not a good thing for a Commander-in-Chief, Secretary of Defense or of War, or General or Admiral to be. War Department Secretary Pete Hegseth's recent speech to the Command Officers at Quantico was generally well received by some whose opinions that I respect and I defer to them. The speech being noted, they also hold many serious misgivings relative to the Secretary's job performance overall. They did not have the same tolerance, however, of the president's rambling address. The president's message to the command assembled was essentially "do whatever I say or there is the door". The command 4-star Admiral in charge of Southern Command overseeing the Caribbean and…

By most measures of sentiment and value the stock market is in an AI blowoff of irrational exuberance that will not be different this time in how it ends. Inevitably, it ends with exhaustion and a precipitous fall back to reality. Reality could be a brutal awakening. Warren Buffett is not the only investment icon that is moving to cash. Carl Ichan, Scott Galloway, Ray Dalio, and others have reportedly moved from equities to cash or gold. "Big Short" famed Micheal Burrey is reportedly active shorting AI with put options. Even the "whales" in Bitcoin are reportedly now selling to cash out their tulip bulbs before they wither. A founding owner of Bitcoin reportedly became a real billionaire as he liquidated his holdings near the high-water mark. The crypto mania is cracking (first break). "Rat-shit on poison" is how the late Charlie Munger defined the crypto market. President Trump, initially skeptical of crypto, took his family all in when he discovered what being on the money side of the scam could do for him to evade any constraint of conflict of interest. Confidants can enrich him by investing in his coins. His stablecoin may be his best investment ever. Central…

  On The Grains:   I hope everyone had a restful Thanksgiving yesterday with family and friends. Though I won't ever cheer for the Cowboys, I am never sad to see the Chiefs lose. Back to the grains, this week was not the quiet holiday week that many expected, with impressive gains in both corn and soybeans posted Wednesday. As we mentioned in the broker comments Wednesday, the market was anticipating large export sales, and those sales were confirmed today by the USDA with 312,000 metric tons of soybeans to China and 273,000 metric tons of corn to unknown destinations. Though much of this was traded Wednesday, we did see follow through today in both the corn and soybeans, which is positive for both charts from a technical perspective as we close out the week. South American weather looks mostly favorable with moderate temperatures and rainfall scattered across much of the growing region, meanwhile storms are set to bring heavy snow and cold temperatures to much of the Midwest over the next several days.   December Corn:       435'2  +3'4 January Beans:      1137'2  +5'6 December Oats:       294'6  -9'2   December Spring Wheat:      579'2  -0'4 December Chicago Wheat:     531'0  +2'0 December…

Brazil's rainfall pattern this week did not appear to materialize as far South as originally predicted. Most of Mato Grosso, Goiás and MABITOBA received 1" to 4" this week but Mato Grosso do Sul, Parana and parts of Minas Gerais were left with nothing. The forecast continues to show that this dry pattern is short term, bringing heavy volumes of precipitation to start out the month of December. RGDS will be the only state that appears void of precipitation to start the month along with neighboring Argentina. These regions have been well saturated and so this will provide a strong buffer going into a potential "veranico". Our concern is that these regions will now accelerate planting, with limited rainfall on the horizon to help seeds germinate.   As predicted, planting pace seems to have accelerated last week, reaching 82% overall. A big portion of the areas that remain to be planted are those in RGDS which are shifting drier. This brings planting pace back closer to its historical pace. We don't see planting pace as being a material issue as farmers have time to replant. It does however shorten the window (and yield potential) for second crop corn that follows.…

One of Shakespeare's most famous quotes was, "First thing we do is kill all of the lawyers." I do not have that level of animosity toward the legal profession but, as I now understand it, what lawyers have to fear most is AI. CNBCs Andrew Ross Sorkin related a story of how when working on a contract he asked AI to summarize it for him and highlight points in it that he should be concerned over. He said that it did a great job and made revisions that Sorkin then requested. He used the document then without ever consulting a lawyer. Chase bank CEO Jamie Dimon said that the bank saved over $2 bln last year by using AI mostly on contracts. There are a whole lot of things that lawyers now do that AI can replace them for. Someone thinking about going to law school should consider this. They might want to become a plumber or electrician instead. I do not think that AI is going to fix my toilet. That is where the real money is. AI might give more honest answers than some people do. It will often say that it cannot answer your question or that…

How deep into an Ag Crisis farmers think they have fallen depends on a number of things. First off would be how long they have been draining equity and their depletion of working capital. For a slice of farmers it has already gone on too long and has cut too deep. They have not made money and are bleeding equity. Their operations are in a terminal stage and they can see buzzards circling overhead. USDA financial aid will save some but not all. They have structural problems that either they cannot or will not make the changes necessary to overcome them. There was really no good crop choice this year even in places where they have more choices about what to plant than we do here in NW IA. Loss projections for Ag crops in general show they were all losers. Our critics often say we lose money because we just grow corn/soybeans. They cannot make suggestions however of alternative crops because nothing has been profitable and if there was a profitable niche, its margin too would be quickly crushed when enough farmers shifted to it. The solution is not so simple as to just grow different crops. I have…

Market disparities always exist across the country based on crop production, storage capacity, and the strength of local demand, but this year has seemingly stretched the regional differences to a more extreme degree. Basis, which is a function of the regional supply and demand balance, currently shows cash grain prices starkly firmer in the East versus weaker the West. Watch for signs that the basis gap is narrowing because the crop has been put away in the Western Corn Belt as better export demand develops from shippers in the Pacific Northwest.   A bumper crop will pad stocks in the Western Corn Belt for a long time to come, but returning Chinese soybean demand out of the Pacific Northwest ports would have to compete with a corn export program that is running hotter than ever. PNW export inspections of corn during the last reporting week totaled over 1 million metric tons versus 191,000 mt a year ago. Soybean shipments from the PNW were only 40,000 mt for the week compared to 584,000 mt at this point last year.   Soybean processors in the West have faced considerably less competition from the export market so far this season and the only…