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May 10, 2019 | |

Lower yields expected for May WASDE, are they right??

Look for the full report in the IAG Interactive Masters

On Friday, May 10th the World Board (WAOB) will publish the first corn and soybean balance sheets for the 2019/2020 crop year. Based on the weather model employed by the USDA, I estimate the initial USDA yield for corn will be around 173 bushels per acre, 3 bushels per acre (bpa) below the trendline yield of 176. The model calls for a reduction of around 2.89 bpa for every 10% the US planting progress lags the average on 5/15. The average planting pace for May 15th in their model is near 80%. Some interpolation/extrapolation will be required. Our analog year is 2013. Planting progress went from 28 to 71% complete from May 12th to the 19th. The corn yield in the May 2013 WASDE was 158, 5.6 bpa below the trendline of 163.6 published at the 2013 USDA Forum. The Westcott‐Jewison model is used for guidance on WASDE yields for May – August reports. The surveyed yields will not begin until September this year. The yield adjustment will likely keep USDA 19/20 corn end stocks around 2.1 billion bushels. The lower yield estimate will keep balance sheets artificially low this summer.

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IAG Blog Archives:

April 16, 2019 | |

ASF = The Biggest Threat to World Animal Agriculture in 2019, and Beyond

ASF = Bullish Pork
ASF = Bearish Soybeans
ASF = African Swine Fever

If you wanted to create the highest negative impact to world animal agriculture, with the least effort, Chinese pork would be your target. It seems African Swine Fever, knowingly or not, has made that decision.

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March 4, 2019 | |

What Does $30 Billion Dollars Look Like?

China has apparently offered to purchase an additional $30 billion of US agricultural products as part of the new trade agreement. That sounds amazing! The additional purchases would apparently encompass ten commodities. I say apparently, because like much of the China trade news, it lacks any detail and substance and leaves us guessing the impact. The impact could be that China is "buying off" the US trade negotiators. "Buying off" is a term used this week by Secretary of Agriculture – Sonny Perdue. So, we ask the question: what does it look like? Would it mean China is buying US corn or wheat? Does it mean China is consuming more – that's what's important – will it be new demand?

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December 16, 2018 | |

Want To Make Better Commodity Buying or Selling Decisions? Think like Ted Williams.

At the risk of wearing out sports analogies…

There is a saying in basketball: “The only important shot you take is the next one.”  The same is true when making decisions about commodity markets. Here at IAG, we know decisions about markets can be frustrating. There is always doubt when reaching a decision. There is never a black/white decision. Decisions need to be made with incomplete data.  Anyone can do it successfully if you think like a top shooter in basketball or a top hitter in baseball. Stephen Curry is one of the best shooters in basketball; he believes every shot he takes will go in – never a doubt, but he misses almost as many as he makes. What does it take to be a great shooter? A short memory and countless hours on the court. It’s the same with commodity buying and selling decisions. The decision maker must accept they will be wrong when measured against the market, but the decision maker can’t let “misses” paralyze their decision making.

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December 3, 2018 | |

Farmers Need To Be Traders

Here at IAG, we know farmers wake up with a market position every day. Most traders have a choice whether to take a position. Farmers do not have that choice. They have a position that needs attention and management. It doesn’t mean they have to be active traders. It requires them to be active managers, and proactive managers.  I believe most farmers inherently understand the position, but they choose to deal with the position in a myriad of methods. That myriad creates the vast difference in marketing results experienced by the farm population. Results can be improved if they approach the position similar to a money manager or professional trader and follow these basic rules:

  1. Manage the money
  2. Design a Plan B before a Plan A
  3. Monitor continuously.
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