Updated: May 17th, 2019
  
Closing Prices:
DEC. 2019 CORN $3.97
NOV. 2019 SOYBEANS $ 8.46
JULY 2019 KC WHEAT $ 4.19
 
Weekly Change: Corn finished 27 higher for the week, Soybeans finished up 14,
and Wheat finished up 33 for the week. 
 
 

 

 

 

We need help!

Do you know of someone looking for a career working with ag producers and a passion for the markets? If so, we’d like to hear from them.  AgWest is currently looking for a few good folks that can help service the growing demands from our farming partners.  Currently we have the below openings:

For more details and to submit an application, please click HERE.


Planting Progress

 

Last Monday, the USDA reported 30% of the nation’s corn was planted which was only a 7% gain from the previous Monday. Last year on that date 59% had been planted and the five-year average stood at 66% planted. Illinois continues to be at the epicenter of the problem at only 11% planted compared to the five-year average of 82%. Indiana reported 6% planted, while Ohio was at 4%. Going west from Illinois things were better with Iowa at 48% and Nebraska at 46%. Other areas of concern would be Minnesota at 21% and South Dakota at 4%.

 

Similarly, soybeans did not gain much ground in Monday’s report. Bean plantings sat at 9% complete compared to 32% last year, and 29% for the five-year average.

 

Trade Issues Trumped by Weather

 

Not only has this week’s rally provided for an attitude adjustment, it has also allowed a welcome diversion from the day-to-day China trade negotiation rhetoric. Last Monday’s planting progress numbers seem to have hit the trade with a big dose of reality. Add to that, weather forecast maps that indicate further delays on the horizon and the grain markets were able to finally catch fire. As we have said for weeks, a weather scare would be a logical catalyst to make the funds rethink their massive “short” position. Next Monday’s progress report, and each new set of weather maps, will determine the staying power this spring rally. Keep this in mind, as there is a long history behind the following statement…

 

“The majority of weather rallies last between 3 trading days and 3 weeks.”

 

When “bull” markets in grains exceed the three week window, something of significance has happened that trims a big chunk out of production. Yes, this event could end up doing exactly that, but don’t give up on the American farmer just yet. A whole lot of corn can be planted in a very short period of time. Half of May is behind us and the second half needs to see a considerable planting progress. Only time will tell.

 

The obvious message here is to not get all “bulled” up just because of a good week in the markets. The funds more than likely (won’t know this until next Friday) cleaned out a pile of their “long” position this week. Yes, they can continue buying and build a “long” position if conditions warrant, but will that actually be the case? A week ago today we would have given anything for this much of a rally. Don’t let emotions blow up your well-laid marketing plans!

 

An Enjoyable Picture For A Change

 

No one knows how long this weather rally will persist so we will take this opportunity to look at current charts that have a much happier appearance than has been the case in recent months.

More Trade War Aid

 

It now appears the government will come to the plate with a program to help offset the hardships caused by the China trade war. Earlier this week, USDA Secretary, Sonny Perdue, provided a few clues as to what is in the works. He indicated that the second installment of trade aid will be modeled after last year’s “Market Facilitation Program” and may include more direct payments and commodity purchases. The program is in the design stage and the USDA will be taking feedback from various commodity associations as the process moves forward. The idea of total program costs in the $15 to $20 billion range has been regularly discussed. There is much to be worked through, including consideration of WTO limitations. The good news is that we have gone from the administration standing firm that the 2018 “MFP” was a one-time deal to it now appears that there is little question a second round of aid is on the horizon. 

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.