Good morning.
The extraction of weather premium has continued at the CBOT to start Monday morning; corn futures gapped lower on last night’s open, and soybean futures made new contract lows on both old and new crop early in the session. Weather models remain hot, especially in the West, but have trended wetter over the past 48 hours to offset some of this heat stress. Friday’s US appeals court ruling on the EPA’s small refinery exemptions has also dealt a fresh blow to soybean demand, which is apparent in futures prices this morning. The million-dollar question in the markets remains how big is big when it comes to 2024 US crop yields. Because of this, the main fundamental story this week will again likely be weather and getting the corn and soybean crops to the finish line. Corn futures this morning are trading 3-4 cents lower, soybean futures are down 18-28 cents, and the Chicago wheat market is down 5-6 cents. Products are lower, soybean meal is down $4-6/ton, and soybean oil is down 40-80 points. Outside markets are mixed, crude oil futures are down 40-50 cents/bbl, the Dow Jones index is up 150 points, and the US$ index is up 30 points. The S&P500 is up 20 points, and the NASDAQ is up 120 points.
Friday afternoon’s CFTC data did not offer many shocks to the market following last week’s new record net-short soybean position. In the week ending July 23rd, funds were buyers of 24,848 contracts of corn, buyers of 22,091 contracts of soybeans, and buyers of 702 contracts of Chicago wheat.
This makes managed money now net-short 318,549 contracts of corn, net-short 163,659 contracts of soybeans, and net-short 75,184 contracts of Chicago wheat.
In soy products, funds were again sellers of meal, selling 11,586 contracts, and were also sellers of 12,982 contracts of soybean oil. This makes them net-long just 15,341 contracts of bean meal, and net-short 29,620 contracts of soybean oil.
Other news from last week that will continue to be talked about Monday is the afore mentioned ruling on the EPA’s denial of small refinery exemptions. In Leman’s terms, the EPA wanted to get rid of waivers for small refiners who were avoiding biofuel blending requirements and the US court of appeals said no.
Specifics on the ruling have to this point been minimal, as the court’s opinion and details of the decision were sealed. The US biofuels industry has long fought the small refinery waiver program, arguing it has abused by the oil industry and has hurt the US farmer.
The Brazilian government on Friday notified the World Organization for Animal Health that the outbreak of Newcastle disease in the country had ended; the statement said Brazil’s government was now awaiting the lifting of trade embargoes implemented by importers over the outbreak.
According to the Indonesian Palm Oil Association (Gapki), May palm oil output from the country dropped to 4.253 mil tons, down from April’s 4.51 mil tons. Exports were also seen lower at 1.966 mil tons, compared to April’s 2.18 mil tons.
Ukraine’s Ag Minister on Friday said total grain harvest had reached 20 mmt’s as of July 25th, up from 11 mmt’s in the same period last year. Hot weather has caused harvest pace to be faster, according to the minister’s report.
US Federally inspected pork production in the week ending July 27th was seen at 515 mil lbs., up 2.5% from last week. Beef production was seen at 505 mil lbs., up 2.7% from last week. YTD pork production is up 1.2% from last year, while beef production is down 1.5%.
Equity markets this week will see a host of private earnings reports, with a trio of central bank decisions then taking over headlines by mid-week. On the earnings slate for the week is Microsoft, Meta Platforms, Apple, and Amazon, which together have a collective market value of more than $10 trillion.
And then on Wednesday, we will have interest rate decisions from the US Fed, as well as the Bank of Japan and Bank of England. Japan is first on the schedule that day, followed by the US and then England.
In the US, traders widely expect there to again be no change on interest rates this month but are curious to see if a clear-cut hint is given that a cut will occur in September amid economic data that has shown slowing inflation of late.
Weekend weather saw the arrival of heat to the central Midwest, with highs topping out in the upper 90’s/lower 100’s for areas of CO/KS/NE and parts of the Dakota’s. This heat expands into IA/MO by mid-week, before temps in the east are seen close to average (upper 80’s/low 90’s) again by next weekend.
On the precipitation side, better than expected rains fell through most of the Midwest over the weekend, with the heaviest totals of 1-3″ focused on E IA/NW IL; S IL into KY and TN and the broader southeast also saw similar totals according to satellite data.
For the week ahead, the EU model is wetter in the western Corn Belt through Friday night than the GFS model, with 2-3″ forecast for an area from S MN/NE IA down to KY/WV. The GFS sees this rain farther to the East.
Week-two forecasts continue to be in poor agreement from the models; the EU and the GFS are in fair agreement this morning on a wetter bias for generally the northern half of the Corn Belt, but the GFS is wetter in the northeast than the EU is. And the CPC has a drier bias for the mid-section of the country, which neither the GFS nor the EU is picking up on.
Temp forecasts in the week-two period show more average temps returning to the northern Corn Belt, while the 6–10-day temp outlook sees extreme heat confined further to the West than what was seen last week.
Have a great day.
Grain Comments: 07-29-2024
Good morning.
The extraction of weather premium has continued at the CBOT to start Monday morning; corn futures gapped lower on last night’s open, and soybean futures made new contract lows on both old and new crop early in the session. Weather models remain hot, especially in the West, but have trended wetter over the past 48 hours to offset some of this heat stress. Friday’s US appeals court ruling on the EPA’s small refinery exemptions has also dealt a fresh blow to soybean demand, which is apparent in futures prices this morning. The million-dollar question in the markets remains how big is big when it comes to 2024 US crop yields. Because of this, the main fundamental story this week will again likely be weather and getting the corn and soybean crops to the finish line. Corn futures this morning are trading 3-4 cents lower, soybean futures are down 18-28 cents, and the Chicago wheat market is down 5-6 cents. Products are lower, soybean meal is down $4-6/ton, and soybean oil is down 40-80 points. Outside markets are mixed, crude oil futures are down 40-50 cents/bbl, the Dow Jones index is up 150 points, and the US$ index is up 30 points. The S&P500 is up 20 points, and the NASDAQ is up 120 points.
Friday afternoon’s CFTC data did not offer many shocks to the market following last week’s new record net-short soybean position. In the week ending July 23rd, funds were buyers of 24,848 contracts of corn, buyers of 22,091 contracts of soybeans, and buyers of 702 contracts of Chicago wheat.
This makes managed money now net-short 318,549 contracts of corn, net-short 163,659 contracts of soybeans, and net-short 75,184 contracts of Chicago wheat.
In soy products, funds were again sellers of meal, selling 11,586 contracts, and were also sellers of 12,982 contracts of soybean oil. This makes them net-long just 15,341 contracts of bean meal, and net-short 29,620 contracts of soybean oil.
Other news from last week that will continue to be talked about Monday is the afore mentioned ruling on the EPA’s denial of small refinery exemptions. In Leman’s terms, the EPA wanted to get rid of waivers for small refiners who were avoiding biofuel blending requirements and the US court of appeals said no.
Specifics on the ruling have to this point been minimal, as the court’s opinion and details of the decision were sealed. The US biofuels industry has long fought the small refinery waiver program, arguing it has abused by the oil industry and has hurt the US farmer.
The Brazilian government on Friday notified the World Organization for Animal Health that the outbreak of Newcastle disease in the country had ended; the statement said Brazil’s government was now awaiting the lifting of trade embargoes implemented by importers over the outbreak.
According to the Indonesian Palm Oil Association (Gapki), May palm oil output from the country dropped to 4.253 mil tons, down from April’s 4.51 mil tons. Exports were also seen lower at 1.966 mil tons, compared to April’s 2.18 mil tons.
Ukraine’s Ag Minister on Friday said total grain harvest had reached 20 mmt’s as of July 25th, up from 11 mmt’s in the same period last year. Hot weather has caused harvest pace to be faster, according to the minister’s report.
US Federally inspected pork production in the week ending July 27th was seen at 515 mil lbs., up 2.5% from last week. Beef production was seen at 505 mil lbs., up 2.7% from last week. YTD pork production is up 1.2% from last year, while beef production is down 1.5%.
Equity markets this week will see a host of private earnings reports, with a trio of central bank decisions then taking over headlines by mid-week. On the earnings slate for the week is Microsoft, Meta Platforms, Apple, and Amazon, which together have a collective market value of more than $10 trillion.
And then on Wednesday, we will have interest rate decisions from the US Fed, as well as the Bank of Japan and Bank of England. Japan is first on the schedule that day, followed by the US and then England.
In the US, traders widely expect there to again be no change on interest rates this month but are curious to see if a clear-cut hint is given that a cut will occur in September amid economic data that has shown slowing inflation of late.
Weekend weather saw the arrival of heat to the central Midwest, with highs topping out in the upper 90’s/lower 100’s for areas of CO/KS/NE and parts of the Dakota’s. This heat expands into IA/MO by mid-week, before temps in the east are seen close to average (upper 80’s/low 90’s) again by next weekend.
On the precipitation side, better than expected rains fell through most of the Midwest over the weekend, with the heaviest totals of 1-3″ focused on E IA/NW IL; S IL into KY and TN and the broader southeast also saw similar totals according to satellite data.
For the week ahead, the EU model is wetter in the western Corn Belt through Friday night than the GFS model, with 2-3″ forecast for an area from S MN/NE IA down to KY/WV. The GFS sees this rain farther to the East.
Week-two forecasts continue to be in poor agreement from the models; the EU and the GFS are in fair agreement this morning on a wetter bias for generally the northern half of the Corn Belt, but the GFS is wetter in the northeast than the EU is. And the CPC has a drier bias for the mid-section of the country, which neither the GFS nor the EU is picking up on.
Temp forecasts in the week-two period show more average temps returning to the northern Corn Belt, while the 6–10-day temp outlook sees extreme heat confined further to the West than what was seen last week.
Have a great day.
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