A Bearish Tone in the Grain Markets

[] the ripple effect of falling grain prices on your shopping cart [] [] [] [] Last week, we talked a bit about [the big events happening this week]( and today I want to dive into what's going on in the grain markets following the World Ag Index release. Right now, farmers are offloading their old crop soybeans and corn at any price they can get because they’re not profitable anymore. We're looking at a record crop this year, but unfortunately, that comes with a bearish tone as producers are betting on prices to fall further. Soybeans are now trading below $10, a level we haven’t seen since before COVID. On a somewhat “positive” note for U.S. and other farmers, France just had its worst wheat harvest in 40 years. They've had a ton of protests, so that probably didn't help their harvest much. For countries that have managed a good wheat harvest, this creates a chance to step in and meet the global demand, possibly fetching better prices. What Does This Mean for Us? The big picture here is that China, the world's largest importer of oil and grain, hasn’t placed new crop orders yet. With a bumper crop and no new demand from China, prices will likely continue to drop. Ideally, this should lead to lower prices in stores and restaurants, but there’s a risk businesses might keep prices high to balance the rising costs of beef. Here's how it usually goes: when corn prices are low, beef prices go up because you're getting better quality, corn-fed beef. On the flip side, when corn prices are high, beef prices tend to go down because you're getting lower-quality, grass-fed beef. Just a year and a half ago, corn was trading at $8, and now it's at $4. Wheat went from $11 to $5.40. Soybeans are the only ones not cut in half yet, but if they drop another $1.50, they will be. Grains led the way up during the commodity rally, and now they're pointing the way down. So, what does this mean for the future? If these trends keep up, we might see some changes in the market dynamics. Keep an eye on grain prices, as they can impact other sectors, too. Tomorrow morning, one of the bigger pieces of news for this week comes out: Producer Price Index (PPI) hits at 8:30am Eastern. With markets still lacking a clear direction after last week’s chaos, keep your eye on that release and how markets react after. Then it’s Home Depot (HD) earnings at 9am Eastern. As a major retailer in the Consumer Discretionary sector, it’ll tell us a lot about the state of the American consumer. Stay tuned! — Geof Smith P.S. Forget red states. Forget blue states. In August of an election year, this one ticker has an eerie track record of pointing to green. [Register your spot here to see what I’m hinting at](. [] [] Last week, we talked a bit about [the big events happening this week]( and today I want to dive into what's going on in the grain markets following the World Ag Index release. Right now, farmers are offloading their old crop soybeans and corn at any price they can get because they’re not profitable anymore. We're looking at a record crop this year, but unfortunately, that comes with a bearish tone as producers are betting on prices to fall further. Soybeans are now trading below $10, a level we haven’t seen since before COVID. On a somewhat “positive” note for U.S. and other farmers, France just had its worst wheat harvest in 40 years. They've had a ton of protests, so that probably didn't help their harvest much. For countries that have managed a good wheat harvest, this creates a chance to step in and meet the global demand, possibly fetching better prices. What Does This Mean for Us? The big picture here is that China, the world's largest importer of oil and grain, hasn’t placed new crop orders yet. With a bumper crop and no new demand from China, prices will likely continue to drop. Ideally, this should lead to lower prices in stores and restaurants, but there’s a risk businesses might keep prices high to balance the rising costs of beef. Here's how it usually goes: when corn prices are low, beef prices go up because you're getting better quality, corn-fed beef. On the flip side, when corn prices are high, beef prices tend to go down because you're getting lower-quality, grass-fed beef. Just a year and a half ago, corn was trading at $8, and now it's at $4. Wheat went from $11 to $5.40. Soybeans are the only ones not cut in half yet, but if they drop another $1.50, they will be. Grains led the way up during the commodity rally, and now they're pointing the way down. So, what does this mean for the future? If these trends keep up, we might see some changes in the market dynamics. Keep an eye on grain prices, as they can impact other sectors, too. Tomorrow morning, one of the bigger pieces of news for this week comes out: Producer Price Index (PPI) hits at 8:30am Eastern. With markets still lacking a clear direction after last week’s chaos, keep your eye on that release and how markets react after. Then it’s Home Depot (HD) earnings at 9am Eastern. As a major retailer in the Consumer Discretionary sector, it’ll tell us a lot about the state of the American consumer. Stay tuned! — Geof Smith P.S. Forget red states. Forget blue states. In August of an election year, this one ticker has an eerie track record of pointing to green. [Register your spot here to see what I’m hinting at](. [] ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Prosperity Pub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Prosperity Pub are for your informational purposes only. Neither Prosperity Pub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. Prosperity Pub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit [( for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by Prosperity Pub 101 Marketside Ave, Suite 404 PMB 318, Ponte Vedra, Florida 32081, United States [Prosperity Pub]( [] ABOUT US: We believe that the opportunity for financial literacy and freedom belongs to all people, not just those who already have years of investing experience. Prosperity Pub provides an array of educational services and products that will help you navigate the markets and become a better investor. Trading is made simple through our online forum full of trading techniques to give you the best tools to kick-start your investing journey. We offer collaborative webinars and training; we love to teach. No matter the opportunity, we bring together a strong community of like-minded traders to focus on analyzing market news as it’s presented each day. DISCLAIMER: FOR INFORMATION PURPOSES ONLY. The materials presented from Prosperity Pub are for your informational purposes only. Neither Prosperity Pub nor its employees offer investment, legal or tax advice of any kind, and the analysis displayed with various tools does not constitute investment, legal or tax advice and should not be interpreted as such. Using the data and analysis contained in the materials for reasons other than the informational purposes intended is at the user’s own risk. DISCLAIMER: TRADE AT YOUR OWN RISK; TRADING INVOLVES RISK OF LOSS; SEEK PROFESSIONAL ADVICE. Prosperity Pub is not responsible for any losses that may occur from transactions effected based upon information or analysis contained in the presented. To the extent that you make use of the concepts with the presentation material, you are solely responsible for the applicable trading or investment decision. Trading activity, including options transactions, can involve the risk of loss, so use caution when entering any option transaction. You trade at your own risk, and it is recommended you consult with a financial advisor for investment, legal or tax advice relating to options transactions. Please visit [( for our full Terms and Conditions. [Unsubscribe]( This email was sent to {EMAIL} by Prosperity Pub 101 Marketside Ave, Suite 404 PMB 318, Ponte Vedra, Florida 32081, United States [Prosperity Pub](