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03/01/2024 County Yield Estimates Prompt Review of Last Season and Consideration of Potential in 2024

By The Commstock Report
February is finally over, so we now have the crop insurance prices set, with base averages of $4.66 for December corn futures and $11.55 for November soybeans. The price averages are down 21 percent from last year for corn and down 16 percent for soybeans. With protection levels determined and insurance signup deadlines coming up on March 15th, this is a period that marks a shift of the focus toward spring and the new growing season ahead. Still, the influences surrounding last year's crops are not set to disappear any time soon. There was renewed attention on crop size over the last several days after the USDA just released the 2023 yield results broken down by county. Here are some of the highlights: County corn yields were recorded in a range from 46.9 bushels per acre in Elbert County, Colorado to 248.4 for the average of several counties in Washington state. Dawson County, Nebraska was near the top with a corn yield of 234.5, ahead of Clinton County, Indiana at 234.4, Stark County, Illinois at 234.1, and Boone County, Iowa at 226.5 bushels per acre. McLean County, in central Illinois, was the top grower of corn again this year, contributing…
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03/01/2024 Cash Basis Improvement Confirms Farm Selling Binge Likely Over

By The Commstock Report
On the Grains Overnight trade was mixed as of 6 am, with corn mostly steady, beans higher and wheat on the weak side. As expected, farmer selling has quickly dissipated with the arrival of March and selling "forced" by cash flow needs now done. The national average basis for corn actually improved by 2 cents yesterday and soybean basis held steady. In wheat, basis slipped a penny for HRW but rose 2 cents in SRW and by 5 cents in HRS. Weekly export sales weren't bad for corn. At 1.08 million tonnes, they were in the upper half of the expected range and YTD sales are up 30.4% compared to USDA's forecast for only a 26.4% gain. Wheat sales were towards the lower end of expectations, but still up 6% YTD versus USDA's forecast for a 4.5% decline for the year. Beans are a sorry case, however. At just under 160,000 tonnes they were three times the horrendously low figure of the prior week, but still near the low end of the range of estimates. YTD sales are still down nearly 20% versus USDA's forecast for a 13.7% decline. It explains why although corn scored a fourth straight higher close…
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02/29/24 What’s Initiative Got to Do with It?

By The Commstock Report
According to Nepoleon, Grant, Patton and most successful military leaders, initiative is everything. Either you have it or your enemy does and whoever has it is winning. Having the initiative is essentially making your opposition respond to what you do rather than being forced to respond to them. In the Ukraine war with Russia, Ukraine has lost the initiative on land with the failure of their fall counteroffensive but ironically, though lacking a navy, has won and holds the initiative in the Black Sea. Go figure. For having such a limited air force, they have also been unexpectedly effective in preventing the Russian air force from seizing superiority. Great weakness was exposed in both Russian naval and air forces.   The land counteroffensive in Ukraine failed for a number of reasons. Ukraine attacked over too wide of a front instead of concentrating on narrow breakthroughs that could then be exploited as was recommended by the Pentagon. They lacked long range weapons: artillery, ATACMs, Abrams tanks, F-16s for air support and a reserve supply of artillery ammunition. While much is being made of the current failure of Congress to authorize additional aid to Ukraine, many of the conditions lending to the…
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02/29/2024 As We “Leap” Into March, Surge in Farm Selling Likely Behind Us

By The Commstock Report
On the Grains Grains are steady-to-mixed in overnight trade as of 6 a.m., with soybeans weakest. Today being the last day of February that nagging chatter about increased selling to make Mar. 1 payments is “officially” over, even though market action suggests it happened earlier this week. In fact, national average basis for soybeans held steady and actually improved yesterday for corn and wheat.   The Biden Administration has promised to realize its final rules on what qualifies for ethanol meeting standards for Sustainable Aviation Fuel (SAF) no later than tomorrow. American Coalition for Ethanol (ACE) CEO Brian Jennings sent a letter to members of the SAF Interagency Working Group urging them to reconsider their recent moves making it more difficult for ethanol to qualify, that included a detailed scientific study showing how they overstate emissions for Land Use Change (LUC), understate corn yields, and fail to give proper credit for climate-smart practices already in place. This content is for members only.Log In Register
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02/28/24 Trespassing on the Parker Ranch Tour

By The Commstock Report
When traveling, my wife and I always include visits to farms and ranches. When on the Big Island of Hawaii, there is no bigger farm or ranch than the Parker Ranch encompassing the Northwest portion of the island. There is a huge range of diversity on the island from lava desert to rainforest but this portion of the island is lush grassland. The Parker ranch near Waimea is the 6th largest cow-calf operation in the US, running close to 15,000 cows.   The origin of the ranch goes back to 1847 when John Parker arrived as clerk of a ship from Newton Massachusetts who after disembarking in Hawaii never reboarded the ship. He had personality and impressed the King by marrying his granddaughter starting with the purchase of two acres for $10. At one time the ranch size encompassed 500,000 acres but has since pared down to 130,000 acres. The ranch once ceded 25,000 acres to the federal government to avoid condemnation so has experience with eminent domain. It also sold 20,000 acres near Waikoloa on the western shore to the Rockefeller family in 1964 for $6 million for resort development that we were told would be worth $900 mln today.…
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02/28/2024 Fund Short-Covering Evident, But Still Modest on Dearth of Bullish Triggers

By The Commstock Report
On the Grains Grains are soft in overnight trade after an encouraging start to the week with two days of gains. After yesterday’s White House meeting, leaders on both sides of Congress seemed confident a budget deal can be reached and government shutdown avoided. Light short-covering by funds was an important component of buying both Monday and yesterday, but it hasn’t yet been enough to trigger a “wave” of such short-covering that feeds on itself as fund managers wanting to cash in on big profits find a dearth of sellers willing to absorb their buyback orders. A prime source of selling these funds were counting on was farmers cashflow needs ahead of March 1 when the cash flow need bulges for payments due on land notes, equipment notes and cash rents to landlords. Normally that would be tomorrow, but being leap year there’s one more day to go. The farm selling has been there, but much has been absorbed by commercial buyers who’ve been content to buy hand-to-mouth for months. We know that because national average basis slippage has been modest in recent weeks and this final week it’s held up remarkably steady for corn, beans and wheat. This content is for…
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02/27/24 Is The Weather Normal Anywhere?

By The Commstock Report
Just returned from our sojourn to Hawaii. The travel video says that there is little wind in Hawaii but when we got there it was blowing 25-35 mph with gusts to 50 mph jerking the plane when landing. Golfers were challenged. The leaves on the palm trees were suspended horizontally. This wind event continued eastward hitting the California coast as an atmospheric river turning their drought into historic flooding. 90% of California was under the flood threat. Surging property insurance costs are making real estate even more unaffordable there. They are calling it "the year without a winter" on the mainland. Snow cover is variable but overall, accumulations are well below historical average. Less natural gas/propane is getting used. It feels very much like early April here in NW IA. Crop input suppliers are texting clients telling them to use "the amazing weather" to pick up their seed/chemicals. There is no snow melt left to inhibit early planting. Farmers here in NW IA did field-work up until Christmas and tilers continued to work in early January. Now planters are being made ready.   They have Winter Games here in the Iowa Great Lakes/Okoboji in late January that typically attract thousands…
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02/27/2024 First Signs the Bears Are Satisfied and Beginning to Cash In

By The Commstock Report
On the Grains Grains are steady to firm in overnight trade after a very encouraging turnaround yesterday, particularly for corn. Soybeans are showing the strongest gains overnight, as private estimates for Brazil’s soybean crop continue to fall. Last week noted South American consultant Michael Cordonnier dropped his estimate matching our own at 145 MMT and yesterday Brazilian consulting firm AgRural lowered theirs yet again, to 147.7 based on continued reports of disappointing yields as harvest progresses.   Yesterday’s trade got off to a good start with weekly corn export inspections at 1.242 million tonnes blowing the lid off expectations ranging from 550K to 1.150 million tonnes. Wheat loadings neared the top end of the range and soybean loadings in the top half of the range. The upside key reversal in May corn was particularly encouraging since there was considerable worry that as funds holding a record short position in March would simply roll into May. There was indeed fund buying involved yesterday, but it appears they may have begun simply taking huge profits instead and simply lightening up. This content is for members only.Log In Register
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02/26/24 An Election Year Rally Comes Next

By The Commstock Report
This report follows the one aired early last December when I forewarned of the anticipated March 1st "John Deere Low". Today's low, after turning from red to green, is good enough to qualify. I personally do not use the kind of basis contracts that have gotten farmers in trouble with the commercial grain market this month as March contracts were priced this week. I have also argued against using "price later contracts", otherwise called "no price established" contracts, which have automatic trigger pricing in August if farmers do not act first. Farmers collectively fail to act on pricing these contracts until expiration which the commercial trade is able to use to their advantage in predator fashion. That is why John Deere February and NPE expiration August lows are so common. Farmers in general fought the corn market this year storing and holding more corn than usual. With a building carryover, that is asking for trouble. Commercials know that they will eventually end up with what they need without having to bid for it, with spreads going to more than full carry in the market.   Last year the crop insurance guaranteed price was 591. That was a good price, good…
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02/26/2024 Bears Retain the Upper Hand but Bearishness Should Soon Be Dialed In

By The Commstock Report
On the Grains Grains are lower to start this final dismal week of February. Though private estimates for Brazil's crops continue to fall, the news falls on deaf ears after Friday's pitiful bean export sales and reports that poultry giant Perdue has three more cargoes of Brazilian beans headed for the U.S. east coast. Corn and wheat sales were both dismal as well, even though YTD sales remain ahead of pace to meet USDA targets. Topping it off was Friday's Commitments of Traders report showing funds selling the daylights out of corn at a record net short likely now in excess of 350,000 contracts. They were also continued big sellers in beans and both KC and Chicago wheat. Only their big net short in MGE wheat came down by a few hundred contracts. Thursday will put February out of our misery as the end of pressure related to farm selling to raise cash for Mar. 1 land and equipment payments we've described as the "John Deere low". Weather-wise, the latest 2-week outlook calls for warmer and wetter conditions for most of the country. Even that will likely be read as negative by promising an early start to spring fieldwork in…
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