Commodity Blog

Jun 25 2021

Webinar Recap: Grain Market Outlook, plus the latest updates from cmdty by Barchart

Yesterday we hosted an exciting live webinar with Barchart’s Head of Commodities, Michael Browne, and grain market expert, Darin Newsom.  If you attended, we hope you enjoyed the webinar! If you weren’t able to attend, we’ll fill you in now!

Darin Newsom kicked off the webinar with an overview of the corn and soybean markets.  According to the meteorological calendar,  we are one month into Summer, the busiest quarter of the year. As Darin explains, he believes that ag futures are weather derivatives, meaning weather forecasts drive how ag futures move - from grains and oilseeds to livestock, anything in production ag is dependent on the weather.  Darin points out a key point to keep in mind is that investment traders set the trend of futures markets, and we see the investment come in on weather forecasts.  A trending market will stay in the trend until acted upon by an outside force.  For the futures market, that outside force is usually non-commercial or investment activity.  

For example, the image below is a screenshot of a geospatial weather map in cmdtyView from this past weekend’s weather.  

Looking at this map on Sunday night, Darin knew with this amount of rain the overnight session was going to see a lot of selling interest.  He explains that while it can be argued that some places didn't get as much rain as the map shows, when this sort of data is fed into an algorithm, it triggers a sell.  

Darin then explained how Barchart’s Grain Price and Basis Indexes are the “hammer and pliers of any toolbox”.   While these indexes can be used in many different ways, one way Darin uses them to see exactly what supply and demand is.  We can tell this by looking at what the marketing year average is.  The lower the number, the more bullish.  The higher the number the more bearish.  Darin recalls that we’ve been bearish in 2016, 2017, 2018, and 2019.  The USDA was overestimating corn stocks, and the cash market knew it.  Darin reiterated that fundamentals win in the end.

Darin then explored soybean fundamentals.  Taking the Soybean market out over time, there’s 0.2% stocks to use, which is an incredibly tight situation.  This explains why traders have not been as aggressive as they have been in their selling.  Darin predicts that the USDA is overestimating soybean stocks, which was the case in the 2013/2014 year.  It wasn’t until the very end that the USDA dropped the old crop below 100 million bushels.  Fundamentally there is significantly less wiggle room in new-crop soybeans than in new-crop corn.

After analyzing corn and soybean fundamentals, Darin then passed it over to Michael Browne, for the second part of the webinar. Michael started with an overview of Barchart’s services for agribusinesses, which includes cmdtyView, our award-winning commodities trading platform,  Marketplace Apps which are elevator-branded mobile apps that connect merchandisers to producers and our content management solutions which provide powerful distribution tools for grain merchandising.  

Michael then dove a little deeper into our product offering, starting with cmdtyView.  cmdtyView is the new standard for grain professionals - and connects our entire content and workflow ecosystem.  cmdtyView users can access global exchange data, physical commodity prices, futures execution, excel tools, commodity news, crop production and yield forecasts, ag weather data and advanced analytics delivered in one powerful solution.


 


 

Marketplace connects grain elevators and agribusinesses to their farmers through branded apps, offer management, and instant messaging.  With our new eSign feature, grain buyers can save time and money by issuing legally binding grain contracts right from their phone!  As the demo video Michael displayed to attendees explains, to issue a contract for signature, simply select “Request Signature” in the eSign module within cmdtyView, select the farmer you want to issue the contract to, upload your contract, and then send directly to their Marketplace app via push notification.  See for yourself!  Watch our eSign demo video here.  

Michael then dove deeper into our Marketplace ERP Data integrations, explaining that with contract data from your accounting provider, your producers will know exactly where they stand.  In addition, easy-to-understand scale ticket information is delivered directly to your app, giving your producers information they can use to manage their business more effectively. Your producers can also keep track of their balances and settlements in one place - directly from their phone.  With balances, producers can feel confident, knowing where they stand with their deals and payments.


 


 

Michael and Darin then opened it up to questions from the viewers, which provided insight into USDA prices, how South American soybean production impacts the forward curve, what happened in the market over the past couple of years to get us today’s corn and soybean prices, and more!  This recap only scratches the surface, so make sure to watch the full livestream here! To learn more about the solutions available from cmdty, please visit our website.



 

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