CommStock Reports

After all of the bearishness of the last month, grain futures are only back close to where they started the year at. If the grain prices continue to move lower like they did through February and the first few days of March, they will join other major markets that have taken on weaker stances so far in 2025, including crude oil, equities, and a couple of the soft commodities that have come down toward earth after flying high the past few years – cocoa and orange juice.   Orange juice futures round out the bottom of the list for commodity performance since the start of the year, having dropped 45 percent. The decline follows a long rally that saw OJ prices surge over 600 percent from their 2020 low. Cocoa futures are similar to orange juice in that they have both fallen sharply from all-time highs made last year, but also in that cocoa and orange juice both still remain elevated compared to before the big rallies started in 2020. Coffee is a third soft commodity that received attention for making news highs in 2024, but coffee continued to strengthen so that it still holds a year-to-date gain of about 20 percent.   Grain futures are not coming down from record highs, so they probably should not be expected to find guidance from the soft commodities, but the cattle market could possibly share similarities to coffee, cocoa, and orange juice.  Cattle futures have similarly just reached new all-time highs, in part due to bullishness ...

On the Grains Finally, Friday. What a week it’s been for row crop futures, as it has been a mentally exhausting market to trade. Now, we can look forward to a break this weekend. President Trump continues to hold firm on his EU tariff talks, which most ag markets didn’t appreciate. Only time will tell what develops over the weekend. Fundamentally, corn still has an underlying story for the old crop, with export sales and shipments well ahead of last year's pace. This week, the USDA reported sales of 38.1 MBU, while slightly off the previous two weeks' pace, it still leaves us 25% ahead of the 23/24 crop. I get the USDA slow-playing it with all the tariff news, yet I just don’t see how we don’t adjust that number higher. CONAB came out with an increase in Brazilian corn, raising yields from 122 to 122.8 MMT, which is still 3.2 MMT behind the USDA’s estimates. The point here is that they can have some great weather and still not exceed what the USDA has on the balance sheet.  

PLEASE REFER TO THE BROKER COMMENTARY PAGE FOR UPDATES!! I asked AI; “How much can a turtle see with its head pulled into its shell?” I do not know what pronoun to use when referring to AI but I got this answer;“When a turtle retracts its head into its shell, its field of vision is significantly reduced, but not completely obstructed, as the eyes are still able to move and compensate for the obstructed view. Here's a more detailed explanation: Reduced Peripheral Vision: Pulling the head into the shell blocks the turtle's peripheral vision, which is typical of many lower vertebrates. Eye Muscle Adaptation: Some turtles have developed a way to compensate for this obstructed view by using their eye muscles differently, allowing them to view the world both laterally and forward. Superior Oblique Muscle: A nerve that moves one of the pond turtle's eye muscles, the superior oblique muscle, is active when the turtle moves its head from side to side, suggesting a role in compensating for the obstructed view.” I took that to mean that we can see quite a little without our necks being stuck out. Here is more of my turtle view: DOGE is a necessary evil that will produce pain. Cover from criticism has always been what is primarily important to president Trump. Elon Musk gets the privilege of wearing a t-shirt to the oval office. Elon Musk, leading the president's DOGE jobs slashing campaign, has been absorbing most arrows directed at the administration. He is often his own worst enemy. The president gave Musk a degree of ...

On the Grains Grains bulls are starving for helpful news after the mild rebound attempt. Tariffs are here to stay as a day-by-day, hour-by-hour influence, whether they are announced or withdrawn or delayed or extended or exempted or whatever else is changing for tariffs against different products and different countries. Tariffs are linked to the sharp break in the stock market that has signaled concern about the economy and recession. Goldman Sachs reportedly downgraded their U.S. GDP growth forecast from 2.4 to 1.7 percent on the assumption of an average tariff rate increase of 10 percent across the board. The major stock indexes are in the headlines for quickly falling into 'correction' territory by the definition of being down more than 10 percent from their highs. A flip into 'bear market' status is considered to follow a 20 percent drop.

I am back in Brazil once again this week. Things are much drier than when I was last here just six weeks ago, which is odd for this time of year. March is historically a high rainfall month and is needed to help fill late season beans, but also help to get second crop corn off to a good start. It is not all bad though, as it has helped facilitate the soybean harvest. As most of our soybean crop is destined for seed, a dry harvest helps elevate quality levels which is just as important to us as yield.   Weather looks to stay dry in the eastern regions of Brazil through roughly March 20th before we see rainfall of substance coming back. Large pockets of Southern Brazil will see steady rainfall, especially in Parana where second crop corn is flourishing. However, most of the rain will skip RGDS and large regions of Argentina. We see rainfall building in Northern Brazil towards the end of March, especially in Mato Grosso. But dryness still lingers in the South. RGDS has had a tough season, and it doesn't look like it is going to get much better. While some later planted beans could get clipped in RGDS or eastern Brazil, the Center West region hardly experienced any stress during the whole season, and therefore Brazil will have another record crop.   Soybean harvest should reach close to 70% complete overall this weekend. Second crop corn planting is nearly 90% complete. Overall, the second crop corn ...

On the Grain Good morning. Even the DOW and crude oil are finding some footing, but it isn’t helping row crops this morning. Yesterday’s report turned into a big nothing sandwich, which is what I figured, yet it still managed to disappoint. USDA chose to kick the can down the road, as they often do, until a later report, I guess they are nervous about tariffs too. The only small changes were the reduction imports by 2 MMT of corn to China, 2 MMT reduction in Brazil exports, and 1 MMT in South American production. This left us with world-ending stocks at 288.9 MMT, the lowest in 10 years, proving it's all about the weather from here on out. The Safrinha crop is reported at 92% planted, up 12% from last week.        

Today's crop report was not supposed to be huge market mover, but grain futures were already enough on edge that we knew it would not take much to trip more volatility. Price reactions ultimately proved to be generally muted as USDA made very few adjustments this month. One of the biggest questions heading into the report was how the government would approach tariffs, and it was on the first page that USDA noted:   U.S. Tariffs on Canada and Mexico have been suspended until April 2 for all products covered under USMCA, which include most agricultural products in the WASDE. Reciprocal tariffs are also scheduled to begin on April 2. However, until these are in effect, WASDE does not incorporate them into commodity forecasts. Despite U.S. tariffs being suspended, Canada’s retaliatory tariffs remain in place. These are accounted for in WASDE estimates and are assumed to continue. U.S. tariffs on China and China’s retaliatory tariffs on the U.S. are assumed to remain in place.   Tariffs were the likely excuse for USDA to not raise the corn usage estimates. The government is again left looking too pessimistic as cumulative corn export sales are up about 26 percent from a year ago compared to the USDA target for growth of only 7 percent. Similarly, most analysts see the ethanol usage target as being set too low, although lately corn grind may have slipped behind the needed pace due to factors including weak ethanol margins, higher ethanol yields, and more substitution of sorghum as a feedstock.   One ...

On the Grains Welcome to the first of the two significant reports for March. While the trade isn’t looking for drastic changes, there is always a certain amount of anxiety ahead of these reports. The overnight markets have fared well, and DOW, NASDAQ, and S&P are all rebounding- possibly overdoing it yesterday. Today’s report will consider current trade policies as part of the global forecast, more on that later. For the month of February, Brazil exported 6.43 MMT of soybeans vs last year's 6.61 MMT, corn totals came in at 1.43 MMT vs. last year's 1.71 MMT. The reduced corn number is not much of a surprise as stocks to use are extremely tight in Brazil now on corn, and the US is the only game in town, as noted by a flash sale yesterday of 126,000 MT of corn to Japan. Premiums have risen sharply for South American and Ukrainian corn. Several analysts have Brazil in need of importing corn to bridge the gap until the safrinha corn crop is available in late June. With the Mato Grosso, basically, planted, it's all about the rain. While we don’t expect much for adjustments in today's report, that could be the outlier that moves the market.   

My turtle will stick his head out of his shell to see if everything is all clear and his eyes will immediately fix on the acrimonious exchanges of tariffs. That will cause him to pull it back in and squeeze his eyes shut hoping to avoid contact. President Trump has called himself "Tariff Man" suggesting tariffs are the salvation of the US economy and means to retain his perception of American greatness. So far, his tariff declarations have been on-off-pause-on again-paused again and so on. That scrambled who-knows- what is coming next uncertainty may be worse than just setting firm on a policy as at least business could adjust to a known set of rules. This uncertainty harms US businesses and damages US consumer confidence. This will be more than just a little disruption. It is the path to a recession.   Those upon which tariffs have been imposed are responding in different ways. Canada is insulted by being reduced to a junior partner in our North American alliance. They believe that they have stood with the US through thick and thin for a century and this is what they get for it. Whatever argument they make for fair treatment appears to fall on deaf ears as president Trump initiates a tariff trade war against them. It appears to be personal for him. Trump wants Trudeau to exit before considering any accommodations. He cites the border and fentanyl as reasons but they are excuses that most do not see as worthy of ...

On the Grains Ethanol received some difficult news at the end of last week. First, the Governor of South Dakota, Larry Rhoden, signed the bill banning eminent domain use for the carbon pipeline. I sit on both sides of the fence on this one, as a corn farmer and a landowner. I strongly support the idea that the public would benefit from a pipeline. I also do not tell somebody else how to manage their land. The sins of past pipeline projects are coming back to haunt this project. I am not implying that Summit Carbon was guilty of these sins, as most of them were in the late 1990s and early 2000s, where they said they would go 4 feet deep in Northeast Iowa, and a fair chunk ended up being 18-24 inches, ruining tile along the way. Ethanol has made multimillionaires out of just about anybody who owned ground and single-handedly saved countless rural towns by providing high-paying jobs, let alone the property taxes to local schools. As a resident of Minnesota getting Twin Cities ideals crammed down my throat, I can appreciate the autonomy of South Dakota yet feel like we may be hitching our horse to the wrong wagon. I know that billionaires rarely give up on an investment, and I imagine they have a contingency plan. All it would take to get farmers to sign up in Minnesota is Governor Walt’s opposing it, and it would be a flood of willing landowners to sign up. If ...

Grains are called fractionally mixed in a quiet open that would require nothing substantial popping up in the news before markets start trading again. Grain traders are likely to look for guidance from whether stock futures and crude oil show signs of regaining stability. In the Headlines Tariffs dominated as the top focus of traders last week in a timeline that led to the latest headline about President Trump pulling back the new 25 percent import charges on goods covered by the U.S.-Mexico-Canada Agreement, including the early carve outs for U.S. automakers and agricultural products. There were no apparent exemptions or changes for the fresh tariffs levied on China. The response from China last week included retaliatory tariffs against U.S. exports that ranged from 10 percent on sorghum, soybeans, meat, and diary to 15 percent on wheat, corn, and cotton. Newly developing over the weekend was that China place tariffs against Canadian agriculture, with new taxes of 100 percent on Canola and 25 percent on pork. House Republicans released a bill on Saturday that would extend funding to the government until September, with this Friday being the next shutdown deadline. Other weekend headlines include about the advancement of a Russian military offensive against Ukraine in the Kursk region, as well as related stories about the U.S. freezing military funding to Ukraine and also pausing the sharing of military intelligence. President Trump suggested that he was considering new sanctions and tariffs against Russia to try to motivate ceasefire negotiations. Trader Positions The Commitments of Traders report had hedge ...

Blizzard conditions arrived in parts of the Midwest earlier this week and reminded us that winter is not over yet. Now meteoroligists are also signaling the alarm about a new weather risk that could raise the likelihood of a late season freeze. The sudden stratospheric warming event currently underway is being called out as the strongest of its kind in nearly 75 years. Warming of the stratosphere can break down the polar vortex and push around the jet stream so that it allows cold Artic air to come down into the United States. The aftereffects of sudden stratospheric warming can influence weather for up to a month or more after the initial collapse of the polar vortex. Lingering winter conditions may serve as a threat to developing wheat crops and could be a source of disruption for the early spring planting season.   If not for the sudden stratospheric warming threat, the two-week outlook would otherwise look like the beginning of a normal transition into spring. Warmer temperatures are in the forecast along with calls for wetter than normal conditions that most farmers will welcome. A look at precipitation rankings since January 1st shows how dry the middle of the country has been. Central Illinois has had one of its 10 driest stretches of the last 133 years. Parts of Kentucky and Mid-South have just had some of their wettest couple of months on record. The regional precipitation contrast depicts how there have recently been low-water level problems on the Mississippi and ...

Above you will find today's installment of Morning Market Talk. Can Corn Reach Any Higher? You can click on the picture above to take you to this morning's episode. Above you will find today's installment of Morning Market Talk. Can Corn Reach Any Higher? You can click on the picture above to take you to this morning's episode. On the Grains Good morning. What we know and what we don’t know. Yesterday’s news of President Trump coming to terms with Mexico and kicking the tariff can down the road instantly rebounded the market for corn, soybeans, and hogs higher. I believe this is the theme of this administration and expect it to remain this way for some time. The question is, how do we market in this current environment? Next week, the WASDE and the Prospected Plantings report at the end of the month will set the tone for summer, as always. One could make the case for slight adjustments on the corn balance sheet with exports running 26% above last year, but this will likely be pushed down the line, especially given the current tariff-on and tariff-off talks.The weather will move into focus. It’s dry, but that can be remedied quickly if we get those April showers. I am not an amateur or professional meteorologist. I have a much more accurate way of predicting the weather: I ask my wife, and she tells me what it will be. She is 100% right all the time (kind of kidding). When we first got married, she asked what ...

I tried to put a phone call through to Dr. Elwynn Taylor that his wife took. We have shared some time together over the years. She told us that he was no longer following events or the news as he had the onset of Alzheimer's. That is regrettable news. All that we can do is keep him in our thoughts. Taylor was highly respected by the farm community. He had a down to earth demeanor and conversation that some academics struggle to master. For many years Dr. Taylor would bring up his forecast based upon the 89-year drought cycle to peak around 2025. He said that he confirmed his drought cycle with studies of tree rings and pond sentiment. Now, because of this disease, he will be unaware of whether it comes true. He would say that if it didn't happen it would be the first time in 600 years. Due to bearish charts and tariff wars, I am not ready to position for weather in the market yet. Maybe climate change will interfere but there is a lot of weird stuff going on weather-wise in the world. I would define 'weird' as events outside of the range of expectations that people had come to expect for weather parameters. Weather events are setting all kinds of records. January for example, was the hottest ever recorded. The arctic is reportedly having its warmest winter on record. Until this week the lack of snow here in NW IA is ominous. The deep diving jet stream had ...

On the Grains I am back in the saddle this morning after a fantastic trip to Commodity Classic. Thank you to all who stopped by the booth to say hello. This was my third Commodity Classic, and each year brings a different tone from producers. This year’s was surprising, most farmers said they would not change acres and chase the market. So, did we buy 94 million acres like the USDA forum said? Did they not want to acknowledge that they were chasing corn, or were they on the fence yet? I would guess a mixture of both. While the $4.70 crop insurance price looks head and shoulders better than the $10.54 soybean guarantee, the margin at $4.70 isn’t wildly higher than last year. There will be trader positioning heading into the end of the month planting intentions.

Thank you to everyone who caught our panel at the Commodity Classic on Tuesday! A special thank you to my co-panelists Karen Braun and Eric Snodgrass!   We have harvested nearly 25% of our soybean crop already on our family farm in Minas Gerais, Brazil. We have never harvested so many beans this early before. Yields appear to be in line with our APH so far (60+ bpa), but there is a long way to go. The forecast shows below average rainfall for large portions of March. This is both good and bad. It is good for our soybeans as a wet harvest for us usually has a negative impact on the germination quality, which is very important for us because our crop is sold as seed. On the other hand, some precipitation is required to help germinate the "safrinha" corn which is being planted now.     Brazil's soybean harvest has reached 55% overall this week, catching back up to the historical average and then some. The harvest started off in Mato Grosso which will already be near completion next week. Some places like RGDS, have barely even begun. South America overall soybean production is seen at 236 MMT, up roughly 15 MMT from last year. Despite continued weather issues in Southern Brazil and Argentina, we should still see record production coming from the Southern Hemisphere.     Tariff talk has put a swift end to our winter rally, seeing prices give back in eight trading sessions what took almost three months to obtain. While the pre-season ...

On the Grains On Tuesday, the middle of the country had blizzard warnings, winter storm warnings, and high wind warnings, while the South had tornado, thunderstorm, flood, and red flag warnings in place. There were many areas where the moisture was more than welcomed, but dark skies added to the ominous feelings stirred up by the market selloff. The situation was looking panicky as the Dow Jones was down around 800 points mid-morning. It was no doubt helpful that stocks trimmed their losses considerably starting at around 10:30 am, which allowed May corn futures to finish 9 cents off their low and soybeans 8 cents better than their low.

Out of Time Part 3 of many A Fox News princess claimed that president Trump was playing 4-dimentional chess while others were playing checkers. I do not know that I would take it that far but I get her point. There is the main thrust of the administration headed by Elon Musk and DOGE that is forging ahead attempting to get in front of what is a budget crisis. And then there are many subsidiary battles going on advancing his larger agenda. It is hard to tell sometimes which is the main attack and which is the diversion in the others. Much of it is intertwined. For example, Trumps trade, immigration and tax policies all run either parallel or are integrated into the budget emergency.   The US has a near $2 trillion shortfall between revenue and spending. Some of that was the result of the 2017 Trump tax cuts. Technically he is responsible for a share of the fiscal mess. I don’t think that anyone wants to let the tax cuts in place sunset as they are scheduled to do. I think doing so would mean immediate recession. They are now baked in. “The Congressional Budget Office (CBO) estimated in 2018 that the 2017 law would cost $1.9 trillion over ten years, and recent estimates show that making the law’s temporary individual income and estate tax cuts permanent would cost another roughly $400 billion a year.” Yet, during the campaign, Trump promised yet another $300 bln annually in additional tax cuts. I do not ...

On the Grains Corn futures were lower for a seventh session in a row before overnight selling threatened to make it eight straight. The adage is that prices take the stairs up but the elevator down. It is now only nine sessions since the May corn contract made a new one-year high at $5.18 3/4. Prices have already retraced more than two-thirds of the run up from the August 26 low at $4.14 1/4. Soybeans were breaking below $10 after having just marked out a high on February 5th at $10.92 1/2.

The turtle looks bewildered, thinking… "Here I am. How did I get here? What is going on? What should I be doing next?" These are all pertinent questions that farmers are asking themselves. I think that we have entered a swirling vortex of developing new reality so that none of us are comfortable enough to think that we know all the answers to the questions. I think that for now we should all adopt the turtle strategy until extremely unpredictable events sort themselves out. Whatever the size of your shell, I have previously advised getting smaller. The strategy is to reduce risk and marshal resources for future commitment when opportunity presents itself. The level of current uncertainty of fundamentals has inflated the degree of risk to where I find it intolerable. I am not un-brave and when I have a level of confidence, subscribers know that I have been willing to stick my neck out from a position of strength and accept risk. I do not see this as one of those times. I believe that we are walking by the graveyard and something is going to jump out of the dark at us. I do not feel that most people have a clue as to what the elevated level of risk may entail. I do not profess to know what is coming next. My risk sensory alarm has been going off for some time. My best example of the turtle strategy would be how Warren Buffett has pulled in ...

Above you will find today's installment of Morning Market Talk. No More $2 Cattle You can click on the picture above to take you to this morning's episode. On the Grains Most of the Monday morning headlines are covering the Friday blowup with Volodymyr Zelensky in the Oval Office and his weekend meetings with European allies. President Trump said Zelensky "is not ready for peace," but the Europeans gave him a warmer reception that followed with the U.K. and France floating a ceasefire proposal. Watch crude oil for guidance on how traders feel the situation is developing. Oil prices have dropped about $10 a barrel over the last month and half with some of that pressure coming from traders thinking that a resolution of the war in Ukraine would release more Russian oil into the market. Lower oil and political uncertainty involving U.S. biofuel policies have combined as a headwind for grains lately. Trade policy is the other big source of uncertainty and if the leading headlines do not involve Russia/Ukraine this morning, they are about tariffs. New import charges are still on course for coming into effect against Mexico, Canada, and China starting tomorrow. It is also still thought possible that an 11th hour deal could be struck with our neighbors to the north and south that would allow the tariffs to either be reduced or delayed. Markets may have priced in the stronger likelihood of the tariffs going into effect as planned, but the rest of the week would hang on the responses ...

Tariff concerns again point to a softer open for the grains, but the situation is fluid and new developments could arise throughout Sunday afternoon. Look for bearishness to ease eventually as the stock market stabilizes along with crude oil and the dollar. In the Headlines Tariffs were again the major source of headlines last week, with markets expressing nervousness over news that President Trump would move forward with new import charges on Mexico, Canada, and China starting this Tuesday. There had been some relief earlier in the week on reports that the tariffs on Mexico and Canada would be delayed another month, but that now seems not the case. The only new development over the weekend was that the U.S. Commerce Secretary indicated that there was still a possibility of Trump receiving additional concessions and reducing tariff rates below the original threat of 25 percent. Grain futures had a volatile close to the week on Friday after starting mostly stronger and finishing sharply lower. There was a rebound attempt mid-session that was stifled by the bearishness linked to President Trump's visit with Ukraine's Volodymyr Zelenskyy. Investors were spooked out of the stock market and more risk-off pressure spilled over into the commodity space. Grain futures finished trading before the stock market eventually rallied strongly into its close. The direction of stocks, oil, and the dollar index should have a strong bearing on whether grains and livestock can find support at the start of the new week. South America's weather outlook as flipped recently to ...

It was easy to point at the USDA Outlook Forum estimates as the reason for grain futures sliding sharply on Thursday, but that was not the only point of bearish input for the market. Also conspiring against the grains were technical selling pressures, negative tariffs news, and the related risk-off sentiment prevailing over outside financial markets. That grain prices had a minor rebound overnight seemed to be a result of stock index futures making a tentative recovery while the dollar index was holding flat, but it was not all systems go for the commodity space because gold and oil were showing steep losses. Tariff worries were eventually too much ahead of the weekend and grains continued their slide lower. The big risk for commodities is going to be that a bearish shift in macroeconomic views causes hedge funds and investors to pull money out of all markets, grains and livestock included.   Today being first notice day for March grain futures was another item on the list of negative influences. The opening of the delivery period puts focus on the wide spread between the March and May contracts, which is the market's way of saying that the grain is not needed now but there is a carry premium for you to store it for later. Bearish action in the spreads has been a response to farmers having recently sold significant portions of the last crop so that grain buyers are not having to scramble for coverage on current usage or to execute ...

On the Grains Welcome to the Friday edition of the Commstock report. If you happen to be attending the Commodity Classic in Denver, swing by booth #1821 and say hello. Also, on March 4th at 10 a.m., we will have our learning session in the Mile High Ballroom. See what Mathew Kruse, Karen Braun, and Eric Snodgrass say about the South American Crop, current events, and the upcoming growing season. Commodity Classic always excites me because I feel like winter is over after we return from that, and it's time to plant some crops.   

Part 2 of Many The idea that we have to put our trust in a crazy/brilliant oligarch named Elon Musk to audit and lead the country out of an otherwise unavoidable default of fiscal rationality is nuts to me. The idea that it was the idea of our eccentric President who put the crazy/brilliant oligarch in charge and that I would accept it is just as nuts. I have to because I believe that the general order of fiscal governance has failed as have all other alternatives leaving us stuck with no other choice so we are forced to try this one. DOGE is going to do some of what appears to be bad things, make poor judgments, make big mistakes and operate outside lines of traditional governance in order to get the country’s fiscal house put back on track to sustainability. That is just how it is going to be allowed to work. Who would stop it anyway?  I will point out issues of DOGE overreach to test how much transparency that the administration is willing to accept. My bet is that acceptance of criticism stops at the point where it is directed at the White House. Elon will serve as a foil as well as a sword. Elon is touting transparency claiming to invite oversight. He will get it. He admits that mistakes will be made as this is a fast process. We are out of time. I will take him at his word. I think that there are ...