Good morning.
Ag futures markets are sharply lower coming out of the weekend, as forecasts for the broader Midwest continue to be mostly non-threatening, and as managed money fund traders continue to pile into new all-time record short positions in corn and soybean futures. Key in the corn market early this week will be whether last week’s pre-report lows can hold, while soybean futures have already made new lows to start today’s trade. The bull camp is hopeful for a seasonal short-term low, but momentum undoubtedly remains lower. Corn futures are down 5-6 cents to start this morning, soybean futures are 15-17 cents lower, and the Chicago wheat market is down 13-16 cents; all three are on their lows or right near them. Products are lower, soybean meal is down $2-3/ton, and soybean oil is down 90-100 points. Outside markets are mostly higher but have been quieter than expected following the weekend’s political headlines; crude oil futures are down 5-10 cents/bbl, the Dow Jones index is up 200 points, and the US$ index is up 5 points.
Don’t usually start in the financial markets, but biggest news coming out of the weekend was that an assassination attempt was made on former President Donald Trump Saturday at a rally in Pennsylvania.
Trump is in stable condition, as it appeared only one of several bullets fired grazed his ear. Both the shooter and an innocent spectator were killed. Stock index futures and the dollar index were both higher to start Monday, as traders felt the attempt, and the subsequent galvanization of Trump’s supporters, further increased his odds of re-election. Bond markets traded lower on ideas that Trump’s fiscal and trade policies would spur growth if re-elected. The yield on 30-year bonds this morning was above that of two-year equivalents for the first time since January. The shooting comes ahead of this week’s Republic National Convention, which kicks off today in Milwaukee.
Friday afternoon’s CFTC report for the week ending July 9th showed managed money traders set new record short positions in both corn and soybean futures, while continuing to aggressively cover soybean oil shorts.
Managed money traders in the week were sellers of 17,446 contracts of corn, sellers of 31,679 contracts of soybeans, and buyers of 4,838 contracts of wheat. Funds are now seen net-short 353,983 corn, net-short 172,605 soybeans, and net-short 69,137 Chicago wheat. This was the largest week of soybean selling since June the 4th.
In soy products, funds were buyers of 44,838 contracts of soybean oil, and sellers of 12,766 contracts of soybean meal. This makes them net-short just 17,018 contracts of soybean oil, and net-long 60,693 contracts of soybean meal. Funds have covered 91,467 contracts in soybean oil in the last two weeks.
NOPA will release soybean crush data for June this morning at 11am central time; the trade sees soybean crush in the month at 177.936 mil bu’s, which would be down 3.1% from May, but up 7.8% from June of 2023. This would also be the largest June soybean crush on record.
Soybean oil stocks as of June 30th are estimated at 1.669 bil bu’s, which would be down 3.2% from the end of May, and down just 1.2% from same month last year. If realized, the stocks number would be a five-month low.
Brazilian ag consultancy Safras y Mercado said late last week that they could see 2024/25 soybean production in Brazil at 171.54 mmt’s, which would be up 13% from this year. The group also sees planted area at 47.33 mil hectares, which would be up 1.9% from this year.
According to the Malaysian plantations and commodities ministry, Malaysia has secured more than $49.2 mil USD in palm oil trade deals with China; the four deals involve local firms and companies in mainland China.
US federally inspected beef production in the week ending July 13th was seen at 506 mil lbs., which was up 14.8% from last week. Pork production was seen at 508 mil lbs., up 16.6% from last week. YTD beef production is down 1.6% from last year, while YTD pork production is up 1.2%.
As of July 8th, just 57% of the French soft wheat crop was rated in the g/ex category, down 1% from the previous week, and down from last year’s 80% rating as of this week. Harvest was seen at 4% complete, compared to 26% last year.
Other financial market happenings on Monday include Fed Chair Powell again being scheduled to give comments, as well as San Francisco Fed President Mary Daly; the comments come following last week’s data that again had investors hopeful of two rate cuts this year beginning in September.
Chinese economic data out on Monday showed GDP in the country grew it at its worst pace in five quarters, expanding just 4.7% in Q2 this year compared to last year. This was well below the average trade guess of a 5.0% increase.
Weekend moisture was heaviest and most widespread in the northern Corn Belt according to satellite data, while the South and Southeast also saw light scattered showers. Heaviest rains of 2-4″ were seen in N IL/S WI, spilling over into N IN. The Dakota’s/MN, as well as parts of MO and IA also saw lighter precipitation of 0.5-1″.
Models see a system bringing additional moisture to the same general area Tuesday/Wednesday this week, with up to an additional 2″ seen for N IL/IN. Broader totals will likely be less.
Temps this week stay above average for one more day on Monday before low pressure again brings more mild air down from the North; temps will be average to below average for all but the West into this weekend, as highs in the Corn Belt don’t hit 90 beyond Tuesday.
And models are in better agreement coming out of the weekend on their week-two solution, with now all three of the GFS, EU and CPC models seeing above average chances at precipitation for the southern and eastern halves of the country, while the north/northwest hold in a drier bias. Week-two temps forecasts also continue to trend cooler for the Midwest.
Have a great day.
Grain Comments: 07-15-2024
Good morning.
Ag futures markets are sharply lower coming out of the weekend, as forecasts for the broader Midwest continue to be mostly non-threatening, and as managed money fund traders continue to pile into new all-time record short positions in corn and soybean futures. Key in the corn market early this week will be whether last week’s pre-report lows can hold, while soybean futures have already made new lows to start today’s trade. The bull camp is hopeful for a seasonal short-term low, but momentum undoubtedly remains lower. Corn futures are down 5-6 cents to start this morning, soybean futures are 15-17 cents lower, and the Chicago wheat market is down 13-16 cents; all three are on their lows or right near them. Products are lower, soybean meal is down $2-3/ton, and soybean oil is down 90-100 points. Outside markets are mostly higher but have been quieter than expected following the weekend’s political headlines; crude oil futures are down 5-10 cents/bbl, the Dow Jones index is up 200 points, and the US$ index is up 5 points.
Don’t usually start in the financial markets, but biggest news coming out of the weekend was that an assassination attempt was made on former President Donald Trump Saturday at a rally in Pennsylvania.
Trump is in stable condition, as it appeared only one of several bullets fired grazed his ear. Both the shooter and an innocent spectator were killed. Stock index futures and the dollar index were both higher to start Monday, as traders felt the attempt, and the subsequent galvanization of Trump’s supporters, further increased his odds of re-election. Bond markets traded lower on ideas that Trump’s fiscal and trade policies would spur growth if re-elected. The yield on 30-year bonds this morning was above that of two-year equivalents for the first time since January. The shooting comes ahead of this week’s Republic National Convention, which kicks off today in Milwaukee.
Friday afternoon’s CFTC report for the week ending July 9th showed managed money traders set new record short positions in both corn and soybean futures, while continuing to aggressively cover soybean oil shorts.
Managed money traders in the week were sellers of 17,446 contracts of corn, sellers of 31,679 contracts of soybeans, and buyers of 4,838 contracts of wheat. Funds are now seen net-short 353,983 corn, net-short 172,605 soybeans, and net-short 69,137 Chicago wheat. This was the largest week of soybean selling since June the 4th.
In soy products, funds were buyers of 44,838 contracts of soybean oil, and sellers of 12,766 contracts of soybean meal. This makes them net-short just 17,018 contracts of soybean oil, and net-long 60,693 contracts of soybean meal. Funds have covered 91,467 contracts in soybean oil in the last two weeks.
NOPA will release soybean crush data for June this morning at 11am central time; the trade sees soybean crush in the month at 177.936 mil bu’s, which would be down 3.1% from May, but up 7.8% from June of 2023. This would also be the largest June soybean crush on record.
Soybean oil stocks as of June 30th are estimated at 1.669 bil bu’s, which would be down 3.2% from the end of May, and down just 1.2% from same month last year. If realized, the stocks number would be a five-month low.
Brazilian ag consultancy Safras y Mercado said late last week that they could see 2024/25 soybean production in Brazil at 171.54 mmt’s, which would be up 13% from this year. The group also sees planted area at 47.33 mil hectares, which would be up 1.9% from this year.
According to the Malaysian plantations and commodities ministry, Malaysia has secured more than $49.2 mil USD in palm oil trade deals with China; the four deals involve local firms and companies in mainland China.
US federally inspected beef production in the week ending July 13th was seen at 506 mil lbs., which was up 14.8% from last week. Pork production was seen at 508 mil lbs., up 16.6% from last week. YTD beef production is down 1.6% from last year, while YTD pork production is up 1.2%.
As of July 8th, just 57% of the French soft wheat crop was rated in the g/ex category, down 1% from the previous week, and down from last year’s 80% rating as of this week. Harvest was seen at 4% complete, compared to 26% last year.
Other financial market happenings on Monday include Fed Chair Powell again being scheduled to give comments, as well as San Francisco Fed President Mary Daly; the comments come following last week’s data that again had investors hopeful of two rate cuts this year beginning in September.
Chinese economic data out on Monday showed GDP in the country grew it at its worst pace in five quarters, expanding just 4.7% in Q2 this year compared to last year. This was well below the average trade guess of a 5.0% increase.
Weekend moisture was heaviest and most widespread in the northern Corn Belt according to satellite data, while the South and Southeast also saw light scattered showers. Heaviest rains of 2-4″ were seen in N IL/S WI, spilling over into N IN. The Dakota’s/MN, as well as parts of MO and IA also saw lighter precipitation of 0.5-1″.
Models see a system bringing additional moisture to the same general area Tuesday/Wednesday this week, with up to an additional 2″ seen for N IL/IN. Broader totals will likely be less.
Temps this week stay above average for one more day on Monday before low pressure again brings more mild air down from the North; temps will be average to below average for all but the West into this weekend, as highs in the Corn Belt don’t hit 90 beyond Tuesday.
And models are in better agreement coming out of the weekend on their week-two solution, with now all three of the GFS, EU and CPC models seeing above average chances at precipitation for the southern and eastern halves of the country, while the north/northwest hold in a drier bias. Week-two temps forecasts also continue to trend cooler for the Midwest.
Have a great day.
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