Ag Market Outlook, With Duane Lowry

Today's reports were bullish corn and soybeans, but that statement is not enough to properly determine price expectations for the next several weeks. Demand reduction was already set in motion by pre-report price levels. And, there was certainly a universal bullish expectation going into today's reports.

Today's podcast attempts to shift focus towards how producers should view demand implications from today's USDA data, and how that perspective may or may not conclude that current values offer sales opportunities. 

Prices are notably off their highs and it doesn't take much weakness to trigger liquidation pressures. South American weather is favorable/acceptable/improving. Conab is still projecting Brazil's soybean production potential to be similar to what it was at the beginning of the growing season. China is well supplied and their domestic prices and crush margins support that statement. China's negotiating stance with a new Biden administration might be strengthened with a slow purchase pace of US ag goods from here forward. A look at 2012 into 2013 is a sobering reminder to producers and speculators that supply-driven bull markets can end much earlier than participants expect. Lots to discuss today. Today is a must listen for producers who have become complacent with a "no sales" stance. 

South American weather remains the key fundamental focus and some concerns do exist. That said, there is a LOT of moisture in the 2-week outlook. As the forecasts begin to reach the Dec 15 timeframe, the marketplace tends to build confidence in South American production potential. IF the current 2-week moisture outlook verifies, traders will build confidence in overall production potential that will be very similar to pre-season expectations.

Downside risk in many commodity markets is very significant and deserves much more respect than most are currently willing to consider. Seasonal tendencies, near record overall spec ag market length, global economic concerns and unwinding of inflation bets could exert a lot of downward pressure on ag prices during the next 90 days. A key for this to occur will be whether or not today's moisture forecasts verify for South America during the next two weeks. If you bet with history, you should bet that the rains will arrive and overall South American production will be favorable. 

This week Duane discusses Election 2020, the Nov 10 USDA report and how we should react to last week's price weakness. The next 10 days offer lots of potential for uncertainty and market volatility. Let's take a step-back view and see if we can identify what should be the big picture theme of the next several weeks. 

Technical conditions warn of an imminent price correction and the potential that this could be a long-lasting price peak. Producers have ample reasons to make sales with confidence. Do you really want to pass up what is offered? It's time for a serious self-examination. Have a listen!

Duane discusses current prices with a focus on post-election possibilities and the risk to prices that all farmers need to respect.  This is a must-listen edition of our podcast!

Prices have been firm into mid-Oct. During the past 12 years, you can only find 2 examples where "not selling" in mid-Oct proved to be the correct approach. In many years, this time frame proved to be the highest values seen through mid-December. 

Traders who are the most bullish now, were the most bearish all summer. The upside leader in the soy-complex rally trend from May forward was soyoil. Soyoil topped 9-18-20 and has not been back to those levels. Soybeans topped 9-18-20, declined sharply, then returned to new highs, but can those highs be expected to hold if those that were long the leader of the complex, have exited? 

Producers need to seriously look at current prices through the lens of total revenue available for 2020, including gov't payments. And especially view today's opportunities from the perspective of what was feared/expected during the April to early Aug window. 

Producers also need to seriously evaluate opportunities currently being presented for 2021.

We cover a lot of items this week. Have a listen!

These are difficult times and every decision has a downside risk. In today's podcast I discuss yesterday's crash in ethanol plant corn basis bids and how to proceed from here forward. 

CPA Paul Neiffer, who is fully engaged in agricultural policy, discusses Prevent Plant payment deferments and how other aid programs tie into this whole thing.

This podcast has high quality information that you will struggle to find elsewhere.

Duane

Jeff Cole, with Pioneer in northwest Indiana, offers insights into producers' decisions and planting progress. 

Duane Lowry and Chris Barron discuss the scope of large acreage that remains to be planted, with many of them to be planted after June 1st, or not at all.

North Dakota farmer Zane Erickson and Ag View Soltuions' Shay Foulk discuss Zane's multiple years' experience with Prevent Plant decisions. 

USDA announced a $14.5 bil direct payment to farmers. Duane and Chris discuss possible implications towards acreage and Prevent Plant decisions, as well as possible market influence.

Duane and Chris discuss current market conditions, Prevent Plant and most importantly, producer marketing decisions.

Chris Barron of AgViewSolutions.com and Adam Brinker (Strategic Account Manager with Pioneer in southern IA) discuss agronomy conditions and implications towards pollination dates and yield potential.

Prevent Plant possibilities are becoming closer to reality with each passing day and continued wet weather forecasts. Duane and Chris try to balance market outlook and management decisions in the current environment.