Updated: November 9th, 2018
 
Closing Prices:
DEC. 2018 CORN $3.69
NOV. 2019 SOYBEANS $ 9.35
JULY 2019 KC WHEAT $ 5.33
Weekly Change: Corn finished down 2 cents for the week, Soybeans finished 2 higher, and Wheat finished 15 lower for the week.. 
 
 

 

 

 

 

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Harvest Progress

 

 

Highlights From The November WASDE Reports

(full report data at the end of this week’s commentary)

 

CORN:

 

SOYBEANS:

 

WHEAT:

 

Table Is Nearly Set

 

There is still potential for surprises in the January “Final” WASDE reports, but by and large, the 2018 crops are big and excess inventories of corn, beans and wheat remain large/burdensome leading into the 2019 crop year. With harvest winding to a close, it is time to have marketing plans in place on the balance of your 2018 crop and have at least the front end of your 2019 plans developed and in motion. As bleak as the markets may seem, there are a few positives that should not be ignored…

 

 

So, you may ask, how does one develop a plan for the balance of the unpriced 2018 crop while facing such lousy prices? It makes no difference how much you have left to price, here are a few tips to jump start the process...

 

 

Keep this quote in mind when thinking about your unpriced old crop… The universe doesn’t give you what you ask for with your thoughts; it gives you what you demand with your actions.” Dr. Steve Maraboli.

 

In other words, make decisions and PUT THE PLAN INTO ACTION!

 

Political Relief

 

With the mid-term elections behind us, watching our favorite programs on TV (short the barrage of political ads) will be welcome. In somewhat of a split decision, Democrats will take majority control of the House and Republicans expanded their majority in the Senate. It was far from a mandate against the Trump administration as far fewer House seats were lost to the opposing party in his first mid-term election than was the case for former Presidents Bill Clinton and Barack Obama, who lost 54 and 63 seats respectively. Add that a couple of Senate seats were gained and both parties can stake claim to victories. 

 

With the House and Senate split between parties, an argument for two years of gridlock could be made. Until that proves out, let us be hopeful that folks can start reaching across the aisle and get some bipartisan things accomplished. By and large, the public is ready to see more compromise and less party-line allegiance. Success by our Washington Representatives will take some bold mavericks who are willing to break from their party colleagues and lead by example…an example of tolerance and understanding. Anything more important coming from Washington would be hard to imagine.        

 

How Long Can The Bean Market Suffer?

 

The obvious key to this question is when will the trade issues with China be resolved. Will it be soon now that the mid-term elections are passed, or could this drag out deep into 2019? Don’t we wish we knew! So what do we know, or think we know, about the soybean market:

 

 

Consider these points, along with crunching your own numbers, to determine if corn or beans are more profitable for your operation.  Odds are that the answer, from a purely economic stance, will be to skip beans in 2019. That, of course, doesn’t work for rotational purposes, but odds certainly favor some shift from soybeans to corn. The USDA provided early baseline projections last week and they anticipate soybean acreage to be 82.5 million, down a whopping 6.6 million acres. They are forecasting nearly three million of those acres going to corn in 2019. 

 

Whatever your planting decisions will be in 2019, keep in mind that a big shift away from beans to corn could create quite a mess for the corn market. This is all the more reason for one to keep in mind that 2019 December corn is trading above last year’s price at this time, and is on the verge of providing significant pricing opportunities. Developing a 2019 soybean plan is going to be challenging, to put it mildly, but developing your 2019 corn plan will be fairly straightforward. IF NOT ALREADY DONE, IT SHOULD BE DONE SOON!

Cattle Technicals Turn Negative

 

Demand has been strong, and although there is some slipping as of late, feedlots have remained fairly current. The packer continues to enjoy hefty margins and based on this week’s price weakness, the packer seems to have a strong upper hand. Recent technical damage in futures has bulls on the run. Seasonal odds favor some strength leading into the holidays, but the first chore is to stabilize the current price slide. 

 

For those with put hedges in place, talk with your broker and have appropriate roll-down orders working. 

 

 

  Have a great week!

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. THERE IS SUBSTANTIAL RISK OF LOSS INVOLVED IN TRADING FUTURES AND OPTIONS WHICH MAY NOT BE SUITABLE FOR EVERYONE. HOWEVER, THE RISK INVOLVED WITH PURCHASING OPTIONS IS LIMITED TO THE PREMIUM PAID PLUS TRANSACTION COSTS. THIS MATERIAL HAS BEEN PREPARED BY A SALES OR TRADING EMPLOYEE OR AGENT OF AGWEST AND IS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION. THIS MATERIAL IS NOT A RESEARCH REPORT PREPARED BY AGWEST. IF YOU ARE NOT AN EXPERIENCED USER OF THE DERIVATIVES MARKETS, CAPABLE OF MAKING INDEPENDENT TRADING DECISIONS, THEN YOU SHOULD NOT RELY SOLELY ON THIS COMMUNICATION IN MAKING TRADING DECISIONS.