Good morning.
Corn and soybean futures are sharply higher to start the last full trading week of July. Weekend news was dominated by politics, as US President Joe Biden announced he would be ending his re-election campaign and would be endorsing current Vice President Kamala Harris as the democratic candidate. Markets seem to have taken a ‘sell the rumor, buy the fact’ approach to the news, as it is likely a lot of the so-called ‘Trump trade’ in the days since the debate was pricing in this outcome. Global weather continues to offer problems around the world, notably in/around the Black Sea, while fund traders continue piling on to the short side of the markets; this will keep volatility elevated into the start of US harvest. Corn futures this morning are 5-6 cents higher, soybean futures are 13-18 cents higher, and the Chicago wheat market is up 3-4 cents. Products are higher, soybean meal is up $5-6/ton, and soybean oil is up 20-30 points. Outside markets are mixed, crude oil futures are trading 30-40 cents lower, the Dow Jones index is up 75 points, and the US$ index is down 10 points. The S&P500 is up 30 points, and the NASDAQ is up 200 points; all three major stock indexes are having inside days so far early this morning.
Friday afternoon’s CFTC commitment of trader’s report showed that managed money traders continue to add to their short soybean position, setting a new record net-short of 185,750 contracts. They sold 13,145 contracts in the week ending July 16th.
Managed money traders were also sellers of 6,749 Chicago wheat contracts and were buyers of 10,587 contracts of corn. This makes them now net-short 343,396 contracts of corn, and net-short 75,886 contracts of wheat.
In soy products, funds were buyers of 379 contracts of soybean oil, and were sellers of 33,766 contracts of soybean meal; they are now net-short 16,638 contracts of soybean oil, and net-long 26,926 contracts of soybean meal. This compares to their peak net-long position in meal at the end of May of nearly 120,000 contracts.
Friday’s cattle on feed report showed the July 1 on-feed cattle herd at 11.304 mil head, or 101% of last year. June placements were 1.564 mil head, or 93% of last year, while marketings were seen at 1.786 mil head, or 91% of last year.
The EU is planning to impose provisional anti-dumping duties on Chinese imports of biofuels in four weeks according to the European Biodiesel Board; the duties would range from 12.8% to 36.4%.
The move comes as EU fuel producers become angered by companies in Asia mixing fuels with cheaper ingredients, and then mislabeling the products to qualify for incentives under the EU’s renewable energy targets.
Federally inspected beef production in the US in the week ending July 20th totaled 492 mil lbs., down 2.8% from last week. Pork production was seen at 503 mil lbs., down 0.1%. For the year, beef production is down 1.6%, and pork production is up 1.2%.
Brazil announced it has halted all poultry exports to China following an outbreak of Newcastle in Rio Grande do Sul last week. The self-imposed restrictions, which already include the EU and Argentina, may curb total poultry exports by as much as 15% according to an industry group.
In the first half of 2024, China imported nearly 276,000 mt’s of chicken from Brazil, which accounts for roughly 11% of the nation’s total exports. In dollar terms, total Brazilian chicken exports in the first half of the year totaled some $4.6 bil USD.
Equity markets are quieter than was maybe expected to start the week following the weekend’s political drama. Traders are now trying to gauge whether Biden’s drop-out means a further period of ‘Trump trade’, or if the dem’s now have a better chance at keeping the White House with Biden’s departure.
Bottom line over the weekend, and possibly reason for the muted reaction, is that most traders felt Trump was likely in the proverbial ‘driver’s seat’ on the election when last week ended, and he remains in that seat as trade begins this morning. Not a lot changed at the end of the day.
Elsewhere in the world, China on Monday announced surprise interest rate cuts on both short-term and long-term borrowing by 10 basis points or 0.1%. This was the first such move in the country since last August and precedes rate decisions by both the US Federal Reserve and the Bank of England next week.
The weekend saw scattered rains across most of the country in some capacity; heaviest totals were generally in the Southeast and along the East Coast. Totals across the Corn Belt ranged from 0.1-1″ generally speaking. Driest areas were IL, IN, and OH.
Forecast for this week looks similar to how it was to end last week, with the South and Southeast expected to stay wet over the next 5 days. Moisture works its way through the Carolina’s and up the East Coast, but broadly stays east of main growing areas in the Midwest. The EU and GFS models are in good agreement.
Temps this week look to remain seasonally mild for most of the Corn Belt and central part of the country, while heat remains confined to the Northwest. Highs do reach into the upper 90’s/lower 100’s as far east as the Dakota’s and Nebraska, but don’t look to get into IA/MN until next week.
The eastern Corn Belt sees highs in the mid-low 80’s through the end of the week, while nighttime lows routinely stay in the 60’s.
Week-two forecasts continue to see disagreement between the models, as the EU is wetter in the southeast, while the GFS sees moisture further West and North. The CPC is more like the EU model in being wet for most of the eastern half of the country. And week-two temp forecasts also trended warmer over the weekend, which will need monitoring.
New extended range guidance from the CPC, out Friday, shows equal chances of above and below average temps for the Midwest, while precipitation is seen staying above average in the East and below average in the West through the first two weeks of August.
Global forecast kept the added moisture for the Black Sea region that showed up last week in the EU model, though the GFS is still drier. Otherwise, global weather updates over the last 48 hours were rather minimal on temp and precipitation anomalies.
Have a great day.
Grain Comments: 07-22-2024
Good morning.
Corn and soybean futures are sharply higher to start the last full trading week of July. Weekend news was dominated by politics, as US President Joe Biden announced he would be ending his re-election campaign and would be endorsing current Vice President Kamala Harris as the democratic candidate. Markets seem to have taken a ‘sell the rumor, buy the fact’ approach to the news, as it is likely a lot of the so-called ‘Trump trade’ in the days since the debate was pricing in this outcome. Global weather continues to offer problems around the world, notably in/around the Black Sea, while fund traders continue piling on to the short side of the markets; this will keep volatility elevated into the start of US harvest. Corn futures this morning are 5-6 cents higher, soybean futures are 13-18 cents higher, and the Chicago wheat market is up 3-4 cents. Products are higher, soybean meal is up $5-6/ton, and soybean oil is up 20-30 points. Outside markets are mixed, crude oil futures are trading 30-40 cents lower, the Dow Jones index is up 75 points, and the US$ index is down 10 points. The S&P500 is up 30 points, and the NASDAQ is up 200 points; all three major stock indexes are having inside days so far early this morning.
Friday afternoon’s CFTC commitment of trader’s report showed that managed money traders continue to add to their short soybean position, setting a new record net-short of 185,750 contracts. They sold 13,145 contracts in the week ending July 16th.
Managed money traders were also sellers of 6,749 Chicago wheat contracts and were buyers of 10,587 contracts of corn. This makes them now net-short 343,396 contracts of corn, and net-short 75,886 contracts of wheat.
In soy products, funds were buyers of 379 contracts of soybean oil, and were sellers of 33,766 contracts of soybean meal; they are now net-short 16,638 contracts of soybean oil, and net-long 26,926 contracts of soybean meal. This compares to their peak net-long position in meal at the end of May of nearly 120,000 contracts.
Friday’s cattle on feed report showed the July 1 on-feed cattle herd at 11.304 mil head, or 101% of last year. June placements were 1.564 mil head, or 93% of last year, while marketings were seen at 1.786 mil head, or 91% of last year.
The EU is planning to impose provisional anti-dumping duties on Chinese imports of biofuels in four weeks according to the European Biodiesel Board; the duties would range from 12.8% to 36.4%.
The move comes as EU fuel producers become angered by companies in Asia mixing fuels with cheaper ingredients, and then mislabeling the products to qualify for incentives under the EU’s renewable energy targets.
Federally inspected beef production in the US in the week ending July 20th totaled 492 mil lbs., down 2.8% from last week. Pork production was seen at 503 mil lbs., down 0.1%. For the year, beef production is down 1.6%, and pork production is up 1.2%.
Brazil announced it has halted all poultry exports to China following an outbreak of Newcastle in Rio Grande do Sul last week. The self-imposed restrictions, which already include the EU and Argentina, may curb total poultry exports by as much as 15% according to an industry group.
In the first half of 2024, China imported nearly 276,000 mt’s of chicken from Brazil, which accounts for roughly 11% of the nation’s total exports. In dollar terms, total Brazilian chicken exports in the first half of the year totaled some $4.6 bil USD.
Equity markets are quieter than was maybe expected to start the week following the weekend’s political drama. Traders are now trying to gauge whether Biden’s drop-out means a further period of ‘Trump trade’, or if the dem’s now have a better chance at keeping the White House with Biden’s departure.
Bottom line over the weekend, and possibly reason for the muted reaction, is that most traders felt Trump was likely in the proverbial ‘driver’s seat’ on the election when last week ended, and he remains in that seat as trade begins this morning. Not a lot changed at the end of the day.
Elsewhere in the world, China on Monday announced surprise interest rate cuts on both short-term and long-term borrowing by 10 basis points or 0.1%. This was the first such move in the country since last August and precedes rate decisions by both the US Federal Reserve and the Bank of England next week.
The weekend saw scattered rains across most of the country in some capacity; heaviest totals were generally in the Southeast and along the East Coast. Totals across the Corn Belt ranged from 0.1-1″ generally speaking. Driest areas were IL, IN, and OH.
Forecast for this week looks similar to how it was to end last week, with the South and Southeast expected to stay wet over the next 5 days. Moisture works its way through the Carolina’s and up the East Coast, but broadly stays east of main growing areas in the Midwest. The EU and GFS models are in good agreement.
Temps this week look to remain seasonally mild for most of the Corn Belt and central part of the country, while heat remains confined to the Northwest. Highs do reach into the upper 90’s/lower 100’s as far east as the Dakota’s and Nebraska, but don’t look to get into IA/MN until next week.
The eastern Corn Belt sees highs in the mid-low 80’s through the end of the week, while nighttime lows routinely stay in the 60’s.
Week-two forecasts continue to see disagreement between the models, as the EU is wetter in the southeast, while the GFS sees moisture further West and North. The CPC is more like the EU model in being wet for most of the eastern half of the country. And week-two temp forecasts also trended warmer over the weekend, which will need monitoring.
New extended range guidance from the CPC, out Friday, shows equal chances of above and below average temps for the Midwest, while precipitation is seen staying above average in the East and below average in the West through the first two weeks of August.
Global forecast kept the added moisture for the Black Sea region that showed up last week in the EU model, though the GFS is still drier. Otherwise, global weather updates over the last 48 hours were rather minimal on temp and precipitation anomalies.
Have a great day.
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