This week saw a rise in grain and soybean contracts followed by a decline on ‘profit taking’ in managed money accounts. DEC Corn rose to a little over $4.70 on Monday and has traded below that level for the rest of the week. USDA Crop Progress on Monday finally had corn plantings at 92% which is still behind average planting pace, but is the first week to rise above 90% for the 2019 crop year. [Read more…] about High Plains Ag Week 6/20/19
There is plenty to discuss in the world of Texas High Plains agriculture this week. Corn contracts rose, cotton in the Texas High Plains is suffering from excess moisture, and Governor Greg Abbott signed legislation creating a state-regulated hemp industry. [Read more…] about High Plains Ag Week 6/14/19
This week saw range bound movement in most contracts of interest for the Texas High Plains. [Read more…] about High Plains Ag Week 6/7/19
Written with: David Anderson
Corn: The shortened week following Memorial day saw continued growth in grains and cotton with declines in the nearby live and feeder contracts. In the last three weeks DEC Corn ($4.326/bu) has climbed almost 20.0% on significant planting delays, particularly in the Midwest. As of May 26 the Crop Progress report has Texas at 93.0% complete in corn plantings, although I’ve heard of some delays in our northeastern counties. The Texas A&M AgriLife Extension budgets for District 1 estimate a break even price for irrigated corn of $4.01. Given the increasingly uncertain trade environment (more on the newly proposed tariffs on Mexican products later), and the stage of production for the year, this might be a good opportunity to protect production with some puts or another form of risk management. [Read more…] about High Plains Ag Week 5/31/19
This week showed near $0.50 gains in DEC Corn over continued planting delays. By the beginning of next week, expect only 50.0% of the total crop to be planted at most, with significant production states severely behind due to rainfall that will almost certainly lead to prevented plant decisions (if the new MFP announcement doesn’t distort acreage, more on that later). [Read more…] about High Plains Ag Week – 5/24/19
The week was split in to two sections; 1) Price declines from trade worries and 2) price rebounds from continued planting woes. The week started out with precipitous declines in wheat, corn, soybeans, and cotton, all trading on the previous Friday’s new tariffs from the Trump administration and the news of new and increased tariffs on U.S. goods out of Beijing. Dec Corn dropped over 2.0% from Monday open to Tuesday’s low, while wheat and soybeans dropped over the weekend. Once the new bearish news from the tariffs was priced in the fundamentals from delayed plantings and forecasts of more wet weather took hold. See the Soybean and Corn tables below for just how far behind planting is in some key states according to the 5/13/2019 Crop Progress Report. Delayed plantings mean potential for lowered supply, and therefore specs and others begin entering long positions, especially since the price was already so low on the trade spookiness. Dec Corn is showing significant strength as prices rebounded above $4.00 Thursday night. [Read more…] about High Plains Ag Week – 5/17/2019
As of Friday morning, the United States has levied 25% tariffs on nearly one-third of all Chinese products in response to President Xi Jinping of China reportedly reneging on parts of a drafted agreement presented to him post-negotiation by U.S. and Chinese officials. Tariffs and trade disputes have been front-page news for over a year now, and I get questions about them all the time. The details of how tariffs work aren’t hard to understand, but sometimes the economic consequences are. With tariffs back in the news I thought I’d take a moment to explain (written and graphically as we had to do in my graduate trade class) how these tariffs actually work. [Read more…] about ‘It Depends’ – How do all these tariffs actually work?
Lots of red in the contracts of interest section this week. Markets plunged quite a bit this week, largely in response to poor planting progress and the announcement of new reenacted/new tariffs on Chinese goods, which we’ll talk about in ‘It Depends’. Dec. Corn is down approximately 1.22% from the week opening and down 7.92% from its four-month high of $4.04/bu. on February 25. Seasonal trends have corn rising around 70% of years during this period, and slowed planting would normally support that, however high carryover and continued trade tensions seem to be dampening those fundamental signals.