The Commstock Report

This morning's CommStock Report teed up the day's major market inputs involving growing conflict in the Middle East and anticipation for biofuel policy decisions. Both items continued to dominate trading through the last session of the week and here is where we stand heading into the weekend. Israel's attack on Iran put the focus on energy markets while grain traders were already paying attention because of the government's announcement of biofuel blending volumes being scheduled for today. A rally for crude oil futures that reached over $5 per barrel coincided with bean oil futures being up the daily trading limit. There looks to be no doubt that Israel's military operations will continue over the weekend, leaving the question of Iran's response and the degree of U.S. involvement to determine how markets will look when they open again Sunday night. There will also be further digestion of the new biofuel requirements and renewed positioning for what is next regarding the 45Z clean fuel credits being considered within the Congressional budget.   The biofuel back and forth has involved another round of trying to determine which news source is right, Reuters or Bloomberg. The Reuters vs. Bloomberg discrepancy was previously on display…

On the Grains The good old days of margin calls, before the ACH stuff, when it was “checks in the mail” waiting for the market to turn (go ahead and laugh if you have heard or used that one). Israel just sent one to Iran overnight, and you can bet your tail that Iran will cash it. Israel claims that it struck dozens of targets in Iran amid nuclear tensions, which Secretary of State Marco Rubio says the US was not involved in. Yet, after the news, crude oil futures jumped—almost $4.00 to $71 per barrel, as much as 20% of the world’s crude travels through the Strait of Hormuz. Israel has declared a state of emergency, anticipating a drone and missile attack in retaliation. According to the Israelis, Iran was within days of having enough material to make 15 nuclear bombs. I would guess that the US-Iranian talks scheduled for Sunday in Oman will be canceled. More on that below. This content is for members only.Register Already a member? Log in here

Historical Footnote: It is lamentable about how the only thing bipartisan these days is the politicization of everything. This weekend the nation commemorates the 250th anniversary of the creation of the US Army. There will be a military parade in DC. My late-father served with the 4rth Infantry Division in Germany in 1952-53 so did not see me until I was one year old. His uniform hangs in my closet. Ironically, CommStock Chief Broker, Eric Relph's son Ethan, serves with the 4th Infantry Division today and has been stationed in Germany/Poland and before that South Korea. He is in a unit of Bradley Fighting Vehicles that is participating in the parade later this week. I am going to focus on what the US Army, my father and Ethan have done and are doing for us. I Thank Them for Their Service!   Livestock Producers Take Note! The Livestock Markets are on Thin ICE! Earlier this week ICE immigration authorities raided the Glenn Valley Foods poultry plant in Omaha NE reportedly taking dozens of workers into custody. Protests developed. The next day the Nebraska Rural Radio Livestock market podcast said that worker absenteeism in other plants was 25%. Will these raids widen in…

On the Grains In memory of Brian Wilson, the chief songwriter of the Beach Boys, who passed away yesterday, we’re thinking of “Good Vibrations” ahead of today’s USDA report. For younger readers, The Beach Boys were a popular band long before color photos were invented. For those who remember him, you are welcome, the rest of the day, you will be humming “I’m thinking of good vibrations” as we attempt to get some positive news from this USDA report. The key item will be what the USDA does with exports. I have been in the grain business for 21 years now, and it feels like 18 years have passed since exports have been monitored this closely. The first order of business today will be the weekly export sales. Estimates are for corn to be 700-1400 KMT, compared to last week’s 1102 KMT and the previous week’s 582 KMT. Soybean estimates are 100-600 KMT, compared to last week’s 197 KMT and two weeks ago, 178 KMT. This content is for members only.Register Already a member? Log in here

PLEASE REFER TO THE BROKER COMMENTARY PAGE FOR UPDATES!! Driving through Central and Western Iowa last week it was easy to see that crops as a whole are off to a great start. (Knock on wood) If I could choose one word to describe them, it would be: consistent. Crops looked consistently even across fields and regions where one plant on one side of the field was of identical height and development to any plant on the other side. Of course, we have a long way to go, and this crop has yet to be tested. Snodgrass says risk of Corn Belt drought has dropped 15% (originally at 60%), moving us away from a broader moisture deficiency. The 15-day weather anomaly shows that above average rains through the month of June are fairly widespread. Longer term forecasts through July still suggest a drying pattern in the Western Corn Belt. This week, the European model looks for more rain in the Northern Grain Belt and Southern Grain Belt of 1" – 3", keeping those regions wet. It is important to note that the GFS is much less generous, showing zero precipitation precisely where the European model provides 3". Time will tell which forecast…

On the Grains During those perfect weekend mornings on the lakes in Minnesota, I have often thrown a rock into the glassy water. The size of the ripple is proportional to the size of the rock I throw. Currently, the ICE raids are a significant issue, the extent of which is yet to be determined, but could be substantial, affecting not only livestock production but also the demand for grains in the upcoming months if this problem is not resolved, which does not appear likely at this time. This is not only a livestock issue but also a concern for construction, hospitality, and many other businesses in the long term. I’m not here to talk policy, just report the news, more on the ICE raids later. This content is for members only.Register Already a member? Log in here

On the Grains Yesterday’s planting progress showed that we are currently 97% planted on corn and 90% planted on soybeans, representing a 4% and 6% increase, respectively. The real question is, what happens to the 3% unplanted? The bulk of that is in Ohio, Kentucky, and Tennessee. Tennessee must get planted; we can’t have the distilleries running out of product—talk about riots. Will those acres be turned in as prevented-plant corn acres? Only time will tell. Yesterday, fund liquidation began in wheat and has since moved to corn. A major wire service is now predicting that the crop will be 50% silking by July 15th. While the math may come to that, it’s hard to believe when temperatures have been in the 50s at night—great sleeping weather but poor corn-growing weather. The forecast is for nationwide Growing Degree Days (GDD) to accumulate at a rate of 94-110% of normal. Good to excellent ratings increased 2% to 71% nationally, down slightly from last year’s 74%. Take Iowa (+12%), Minnesota (+3%), Missouri (+6%), and Wisconsin (+5%) out of the mix, it’s hard to find a state that grows meaningful corn acres that is better than last year. I would not get bullish…

I think that any betting man would have given odds that "The Big Beautiful Budget Bill" would have somehow worked its way through the Senate's gauntlet and reconciliation with the House to become law later this summer…but now, given the association of Elon Musk with opposition to the bill, that outcome is even more assured. Musk's opposition, leading to his fallout with the president, will actually cause some to not oppose the bill so aggressively who otherwise may have done so. The opposition has now become a personal offense to president Trump that he can link to Elon and there are now many republicans that will cower.   What is wrong with the bill? It is very regressive but that is not my focus. Primarily it is that it will increase the debt $5 trillion over the next decade instead of the $2.4 trillion touted because the tax cuts in this bill sunset in 4 years when we all know that, just like with the 2017 tax cuts, they will be extended. Then there are the unexpected events that are actually expected but that are difficult to incorporate into the forecast that will impact the debt. Interest rates may be…

New Recco Day 3: Cover 20% of new crop buying short-dated September $4.40 puts at 20 cents or better.  This would take total new crop coverage to 50%. Planting is nearing completion and has been planted in optimal conditions.  The short-term weather outlook is favorable. It provides coverage through late August, getting us through the June acreage report and the bulk of the critical growing season.  Contact your broker about potentially selling calls to reduce costs. Filled on 6/5/2025 at 16 ½ cents. Above you will find today's installment of Morning Market Talk. Quiet Start to the Week You can click on the picture above to take you to this morning's episode. On the Grains The Big Short was a 2015 movie based on Michael Lewis's book, The Big Short: Inside the Doomsday Machine. While based on the events of the subprime mortgage debacle, it focused on investors who saw the impending collapse of the housing market and profited significantly. The Commitment of Traders report contains some interesting data on how funds are currently betting. For example, the funds were sellers of 54,283 corn contracts, putting them net short 154,043. In the housing market, a few bet against the herd mentality and won. Yet, in grains,…

Grains look toward a firmer open in follow up from a positive finish on Friday. Possible disruptions could come from any major changes in the situation with President Trump deploying the National Guard as immigration policy protests erupt in Los Angeles. Traders will otherwise have some optimism over the trade meeting with China. Positions will be prepared for the Thursday crop report. In the Headlines Trade negotiations with China resume on Monday with a meeting in London. The U.S. side will include the Treasury Secretary, Commerce Secretary, and the Trade Representative Ambassador, with China represented by its Vice Premier. This group was previously reported to have reached an impasse, but talks were advanced by a phone call between President Trump and Xi Jingping last week. Trump indicated that the phone call included Xi's assurance that imports of rare earth materials and magnets could continue. It was another record week for the cattle market last week, with futures working up toward fresh all-time highs in the cash trade again. Monday opens up the delivery period for June live cattle futures, which still have the rest of the month to converge with the price. Cash deals jumped by as much as $10…