Good morning.
Another night of selling has been seen at the CBOT, as ag futures are once again lower going into the day session. Soybeans are having an inside day so far due to yesterday’s wide-ranging trading day, while corn and wheat futures are back near their recent contract lows. The board just can’t seem to kick the large supply story that has been hanging over the market since June, and developments on the demand side have done little to help. Crop ratings in August correlate significantly better with yield than ratings in June or July, meaning Mother Nature still has importance over the next several weeks. As has been mentioned previously, the table has been set for big yields; market direction from here all depends on whether conditions in August allow them to be realized. Corn futures this morning are down 4-5 cents, soybean futures are down 13-18 cents, and the Chicago wheat market is down 12-13 cents. Products are lower, soybean meal is down $5-6/ton, and soybean oil is down 20-30 points. Outside markets are mixed, crude oil futures are down around 50 cents/bbl, the Dow Jones index is down 50 points, and the US$ index is up 10 points. Quiet night in general for stock index futures, as both the S&P500 and the NASDAQ are also trading near unchanged.
This week’s crop progress update continued to show a sizeable amount of both the corn and soybeans rated in the good/excellent category. Corn g/ex ratings were seen up 1% from last week at 68%, while soybeans rated g/ex were seen at 67%, down 1% from last week.
At the state level for corn, the biggest increases were seen in PA (+9% g/ex), TN (+4%), and S Dakota (+3%). IA and N Carolina both saw 2% improvements, while OH, IN, and IL all improved 1%. Biggest declines were seen in CO (-10%), TX (-7%), and KS (-5%).
For soybeans, states with the most improvement over the past week were N Carolina (+5%), and MN (+3%); S Dakota, IA, AR, MS, and TN all saw 2% improvements. Biggest declines were in N Dakota (-7%), KS (-6%), and OH (-5%); MO, IL, and MI all saw declines of 4%.
Corn silking advanced to 77%, up from 61% last week and the five-year average of 76%. The amount of corn in the dough stage increased to 30%, compared to last week’s 17% and the five-year average of 22%.
On soybeans, 77% of the crop is seen blooming, up from 65% last week and the five-year average of 74%. And 44% of the crop is seen setting pods, up from 29% last week and compared to the five-year average of 40%.
Winter wheat harvest advanced 6% to 82% complete, while spring wheat harvest received its first update of the year at 1% complete. Condition ratings on the spring wheat crop were down 3% from last week at 74% g/ex.
Sources in South America are telling us that the 10% drop in export tax that was rumored yesterday in Argentina has a very low chance of actually happening. According to an Argy trader, the industry is lobbying for it, but it’s not something the government is actually considering doing.
Staying in Argentina, the Rosario Grain Exchange on Monday reported that freezing temps and a lack of moisture have had a negative impact on the country’s winter wheat crop. The northern area of Buenos Aires is experiencing the driest month of July in nearly six decades.
As has been well advertised, the Fed’s July FOMC meeting will kick-off today and wrap up tomorrow. The next 32 hours sees rate decisions from not only the US, where rates are expected to again stay unchanged, but also from the Bank of Japan and the European Central Bank.
Satellite data shows rains on Monday were focused over primarily the Eastern half of the Midwest; totals ranging from 0.1-2″ were seen in a broad area from WI all the way down to FL. Pockets of New England in the northeast were dry, while there was also a storm system that brought moisture to parts of the Dakota’s and MN/IA.
Storms will continue to impact these eastern areas over the next 48 hours, as an active Gulf moisture flow continues to provide conditions that are ripe for upper air convection. The GFS and EU are still not in perfect agreement, but both see additional moisture of 1-3″ for areas from the Dakotas to KY/WV through Friday night. The GFS is slightly further east and north with the same amounts.
On the temp side, warm air continues to impact much of the country for at least another week, though the West Coast is seeing a bout of cooler air today/tomorrow. Highs in the central Plains reach the upper 90’s/lower 100’s nearly every day between now and next Monday.
Week two forecasts are in better agreement this morning than what was seen yesterday, though the CPC is still wetter in the west than the EU and GFS models. The EU and GFS agree on a wetter than average pattern for generally speaking the northern half of the US.
Generally speaking, the forecast continues to be less threatening than what was seen to end last week, which has likely contributed to the extraction of premium yesterday and early this morning. New 8–14-day temp guidance also shows an expanded area of cooler air in the north than was seen yesterday.
Have a great day.
Grain Comments: 07-30-2024
Good morning.
Another night of selling has been seen at the CBOT, as ag futures are once again lower going into the day session. Soybeans are having an inside day so far due to yesterday’s wide-ranging trading day, while corn and wheat futures are back near their recent contract lows. The board just can’t seem to kick the large supply story that has been hanging over the market since June, and developments on the demand side have done little to help. Crop ratings in August correlate significantly better with yield than ratings in June or July, meaning Mother Nature still has importance over the next several weeks. As has been mentioned previously, the table has been set for big yields; market direction from here all depends on whether conditions in August allow them to be realized. Corn futures this morning are down 4-5 cents, soybean futures are down 13-18 cents, and the Chicago wheat market is down 12-13 cents. Products are lower, soybean meal is down $5-6/ton, and soybean oil is down 20-30 points. Outside markets are mixed, crude oil futures are down around 50 cents/bbl, the Dow Jones index is down 50 points, and the US$ index is up 10 points. Quiet night in general for stock index futures, as both the S&P500 and the NASDAQ are also trading near unchanged.
This week’s crop progress update continued to show a sizeable amount of both the corn and soybeans rated in the good/excellent category. Corn g/ex ratings were seen up 1% from last week at 68%, while soybeans rated g/ex were seen at 67%, down 1% from last week.
At the state level for corn, the biggest increases were seen in PA (+9% g/ex), TN (+4%), and S Dakota (+3%). IA and N Carolina both saw 2% improvements, while OH, IN, and IL all improved 1%. Biggest declines were seen in CO (-10%), TX (-7%), and KS (-5%).
For soybeans, states with the most improvement over the past week were N Carolina (+5%), and MN (+3%); S Dakota, IA, AR, MS, and TN all saw 2% improvements. Biggest declines were in N Dakota (-7%), KS (-6%), and OH (-5%); MO, IL, and MI all saw declines of 4%.
Corn silking advanced to 77%, up from 61% last week and the five-year average of 76%. The amount of corn in the dough stage increased to 30%, compared to last week’s 17% and the five-year average of 22%.
On soybeans, 77% of the crop is seen blooming, up from 65% last week and the five-year average of 74%. And 44% of the crop is seen setting pods, up from 29% last week and compared to the five-year average of 40%.
Winter wheat harvest advanced 6% to 82% complete, while spring wheat harvest received its first update of the year at 1% complete. Condition ratings on the spring wheat crop were down 3% from last week at 74% g/ex.
Sources in South America are telling us that the 10% drop in export tax that was rumored yesterday in Argentina has a very low chance of actually happening. According to an Argy trader, the industry is lobbying for it, but it’s not something the government is actually considering doing.
Staying in Argentina, the Rosario Grain Exchange on Monday reported that freezing temps and a lack of moisture have had a negative impact on the country’s winter wheat crop. The northern area of Buenos Aires is experiencing the driest month of July in nearly six decades.
As has been well advertised, the Fed’s July FOMC meeting will kick-off today and wrap up tomorrow. The next 32 hours sees rate decisions from not only the US, where rates are expected to again stay unchanged, but also from the Bank of Japan and the European Central Bank.
Satellite data shows rains on Monday were focused over primarily the Eastern half of the Midwest; totals ranging from 0.1-2″ were seen in a broad area from WI all the way down to FL. Pockets of New England in the northeast were dry, while there was also a storm system that brought moisture to parts of the Dakota’s and MN/IA.
Storms will continue to impact these eastern areas over the next 48 hours, as an active Gulf moisture flow continues to provide conditions that are ripe for upper air convection. The GFS and EU are still not in perfect agreement, but both see additional moisture of 1-3″ for areas from the Dakotas to KY/WV through Friday night. The GFS is slightly further east and north with the same amounts.
On the temp side, warm air continues to impact much of the country for at least another week, though the West Coast is seeing a bout of cooler air today/tomorrow. Highs in the central Plains reach the upper 90’s/lower 100’s nearly every day between now and next Monday.
Week two forecasts are in better agreement this morning than what was seen yesterday, though the CPC is still wetter in the west than the EU and GFS models. The EU and GFS agree on a wetter than average pattern for generally speaking the northern half of the US.
Generally speaking, the forecast continues to be less threatening than what was seen to end last week, which has likely contributed to the extraction of premium yesterday and early this morning. New 8–14-day temp guidance also shows an expanded area of cooler air in the north than was seen yesterday.
Have a great day.
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