Category: Agriculture

  • JTM Capital Management – Major Factors Affecting Agriculture

    | | Agriculture

    Following up on last month’s commentary, July featured lower than average rainfall and higher than average temperatures across most of the US’s primary growing regions. Interestingly enough these results were quite different than the NOAA long-range forecasts issued for the month. Specifically, most of the Corn Belt experienced maximum temperatures that averaged 2-4 degrees (F) above normal. As you can see on the left even with this year’s extremely wet spring, drought conditions are expected to develop in key growing regions of IA, IL, and IN. This is definitely something to keep an eye on as near perfect conditions will be needed to substantially increase row crop yields at this point … Read more JTM Capital Management – Major Factors Affecting Agriculture
  • Third Street AG July Commentary

    | | Agriculture

    U.S. farmers planted the final eight million acres of corn and soybeans in July. While that is a record and clearly the lead story for the agricultural markets, it was also the lead story in May and June. As most of the U.S. experienced better than expected weather in July, the markets appeared to grow weary of the “Record Slow Planting” story as the month went on. The futures markets for corn, wheat and soybeans all followed the same path: putting in their highs mid-month and then closing the month on their lows. All three markets were helped higher by the bullish wheat surprise in the July 11th WASDE report. The USDA cut their production estimate for our five major exporting competitors by a combined 10 million metric tons (MMT). Chicago wheat futures quickly rallied 25 cents and the other markets followed … Read more Third Street AG July Commentary
  • Call Option on Weather Shocks Through Agricultural Managed Futures Managers

    | | Agriculture

    There is the potential for a major agricultural price dislocation if a strong La Nina effect lasts through the summer. It is unclear whether the current La Nina effects will continue, and current expectations are that it will dissipate in the spring, but history suggests that ENSO effects can disrupt many major commodity prices including corn, soybeans, wheat, coffee, and sugar. So how can investors take advantage of this uncertain opportunity? … Read more Call Option on Weather Shocks Through Agricultural Managed Futures Managers
  • Kottke Commodities – Little U.S. Business in Wake of Flood Rally

    | | Agriculture, Commodity Trading Advisor, Grains

    Between late June and end-July, U.S. agricultural prices traced an extraordinarily wide and rapid boom-and-bust, wild even for futures markets. The managers felt well-positioned in corn bullspreads, which did little despite the sharp changes in expectations for supply tightness; apparently it all occurred so fast that the commercial grain business was too frozen to assess and re-position. As December corn rose 90c per bushel in reaction to widespread flooding east of the Mississippi River, and then, après deluge, abruptly fell back 75c, the December-March spread narrowed only a scant 2c and then reversed by as much. The result was a crummy month for us … Read more Kottke Commodities – Little U.S. Business in Wake of Flood Rally