Charts of the Day – August 16, 2019

Chicago Wheat

Afternoon Market Commentary – August 16, 2019

by: Chris Betz

Corn Soybean Wheat
Old Crop (futures month, change, settle price) CU9 10’2 371’0 SU9 9’2 867’2 WU9 1’6 470’6
New Crop (futures month, change, settle price) CZ9 9’6 380’6 SX9 9’0 879’6 WN0 4’0 495’0

All three completed lower weeks despite some recovery on Friday heading into the weekend. Corn weighed on Ag commodities after an extremely bearish WASDE report on Monday. Outside markets also weighed on trade after a wild ride for equities throughout the week. Equities lent support Friday as the DJIA is up over 250 points late Friday afternoon.

China has said they will not buy more U.S. Ag products in response to President Trump’s additional 10% tariffs now set to go into effect in December, but there have been U.S. export sales to unknown destinations of late, which has lent some optimism. However, negotiations continue to be tenuous of late, which will lend volatility to equities and ag commodities alike.

Technical Thoughts – August 15, 2019

By: Ken Lake

In the hours following Monday’s USDA report, I searched for some clarity attempting to reconcile the numbers.  The best resource I found was Chip Flory’s AgriTalk session where he interviewed Lance Honig, Crop Branch Chief at NASS (link here).

In that interview, Chip reviewed the numbers from the March Prospective Planting report in which USDA reported prospects of 92.8 million corn and 84.6 million soybean acres for a total of 177.4 million acres.  When compared to the past couple of years where a total corn/soybean acreage had been closer to 180 million acres we knew in March that there was a risk that we were missing 3 to 5 million acres.

On Monday USDA reported that 90 million corn and 76.7 million soybean acres had been planted for a total of 166.7 million.  If you add the 15 million prevent plant corn and soybean acres you get a total of 182.2 million acres which is pretty close to the spring intentions plus the 3 to 5 million acres that some believed were missing from the March report.  This seems to reconcile the difference that some felt we had regarding planting intentions and final planted/prevent-plant acres.

Additionally, Honig pointed out in the interview that if you look at all acres planted to all crops and add the 20 million acres of prevent-plant of all crops you get a total planted acres/prevent-plant number that is in line with total planted acres for the past 5 years, again reconciling USDA’s report from August 12th.

These numbers are not set in stone, of course.  USDA will revise the numbers, if needed, in the October report.  One could expect the percent of harvested acres to go down and an adjustment in yield to be made.  We will likely not know the true outcome until harvest is over and USDA report the final production number in January.

Technically this market if very oversold and sales should be avoided.  Support in December corn is the contract low, 363.  Fortunately, all the bearishness is in corn, soybean acreage numbers are actually pretty friendly.  Support in November soybeans is 874 then 854.

Fertilizer Update – May 1, 2019

By: Emily Calderone

Urea has taken some significant jumps lately. It looks like this is partly due to anticipated demand now that spring is upon us, but also due to the barges that have been unable to move up from the gulf, leading to some areas having short supply. The hope is that prices may come down slightly once movement is happening on the river again.

UAN is slowly creeping up after taking a tumble from the high price we saw last fall – it isn’t uncommon for us to see prices ticking up as applications start happening in the spring but it also looks like CF has pulled their tons off the market again, which is what caused the price spike we saw last summer. There is no word on then they plan to re-enter the marketplace, and there is a good chance that prices will continue to climb as spring continues

Dry phosphate prices have taken a fall at the gulf, and these prices are finally getting passed on to retail purchases as the high dollar supply from last fall is being used up after sitting in storage all winter. If you have an empty storage or a field that needs to be spread, now would be a great time to book some tons.

P (continued):
10-34-00 prices haven’t made much movement lately but as always, supply has potential to be tight, so if you need some to get rolling on your spring planting it would be wise to get things bought. Fertilizer always seems to be harder to find the further into planting we get, but no major price hikes are anticipated due to the dry phosphate market being so low right now.

Potash prices have been stable since January and we likely will see current prices hold through spring. Prices are still not unfavorable in terms of current corn prices and nutrient removals, so if you’re looking to fill up your storage or catch up on the spreading that didn’t happen last fall, it might be wise to get it spread this spring. You will lose some plant available K this season vs if you applied last fall… but you’ll save yourself a headache and keep K levels right if this upcoming fall is as wet as the last one was.

Opening Calls – December 3, 2018 at 7:12 AM

Beans are up double digits after Saturday’s announcement that the U.S. and China have reached a trade truce, and either side will not levy additional tariffs on the other. More work needs to be done to reach a firm resolution to the trade dispute, but the tone should be much more positive moving forward. Beans were up as much as 29 cents at the open of the overnight session Sunday, and currently up 16 ½ cents. Corn and wheat tagging along with corn up 4 ¼ and wheat up 5 ¼.