Good morning.
Monday’s lower soy complex trade has spilled into day two, as both soybeans and soybean oil futures are sharply lower to start Tuesday. New contract lows have again been scored in both the old and the new crop, while any sort of buying remains mostly absent. The absence of Chinese purchases on the new crop book of business mixed with a massive crop that’s about to be harvested has caused the US balance sheet to balloon. Corn futures this morning are trading 2-3 cents lower, soybean futures are trading 15-16 cents lower and are near their lows, and the Chicago wheat market is down 4-5 cents. Products are lower as well, soybean meal is down around $1/ton, and soybean oil is down 80 points. Outside markets are mostly lower, crude oil futures are down 30-40 cents/bbl, the Dow Jones index is down 20 points, and the US$ index is up 5 points. The S&P500 is near unchanged, and the NASDAQ is up 70 points.
Yesterday afternoon’s weekly crop progress report showed no change to either corn or soybean conditions from the week prior, with corn conditions being 67% g/ex and soybean conditions being 68% g/ex.
Though the national numbers did not change, states that saw the biggest improvement in corn conditions were Texas (+6%), South Dakota (+6%), and Colorado (+6%). Inversely, North Carolina was down 9%, while Illinois and North Dakota were both down 4%.
For soybeans, states that saw the most improvement were North Carolina (+5%), South Dakota (+4%), and Missouri (+3%). Tennessee saw a 6% decline, while Mississippi was down 5% and both Michigan and Ohio were down 4%.
Corn silking reached 94% compared to 88% last week and the five-year average of 94%. 60% of the crop has reached the dough stage, compared to 46% last week and the five-year average of 56%. And 18% of the crop is dented, compared to 7% last week and the five-year average of 12%.
Soybeans blooming reached 91%, compared to 86% last week and the five-year average of 90%. And 72% of the crop is seen setting sods, compared to 59% last week and the five-year average of 70%.
For wheat, winter wheat harvest was seen at 93% complete, up from 88% last week and ahead of the five-year average of 91%. Spring wheat harvest advanced 12% to 18% complete, behind the five-year average of 21%. Conditions in the g/ex category were down 2% to 72%.
FSA data, released after the WASDE report on Monday, showed prevent plant corn acres this year at 2.67 mil, and prevent plant soybean acres at 775k; both are unsurprisingly up significantly from 2023.
Conab, Brazil’s USDA equivalent, will release its August supply & demand update this morning at 7am central time. Trade sees 2023/24 soybean production at 148.57 mmt’s, which would be up slightly from July’s 147.34 mmt estimate. Harvested area is seen fractionally higher at 46.12 mil ha’s.
Brazil 2023/24 soybean total corn production is seen at 117.13 mmt’s, also up slightly from July’s estimate of 115.86 mmt’s. Harvested area is also seen slightly higher at 21.07 mil ha’s, compared to 20.863 last month.
The Argentine government has called for a 15-day period of talks between soy crush workers and ag traders Cargill, Bunge and LDC (Louis Dreyfus). The talks were mandated from Monday following a request by the group of traders, and one of the unions involved has already said it will comply.
Crude oil futures are lower this morning as news that OPEC has lowered its demand forecasts for both 2024 and 2025 is offsetting continually rising tensions in the Middle East. The prospect of Iranian attack on Israel remains but is seemingly on the back burner this morning.
Both headline and core PPI is expected to see a 0.2% increase on a monthly basis, ahead of the more talked about CPI report for July due out tomorrow. On an annual basis, economists are forecasting a 2.3% reading for headline PPI, nearing the Fed’s 2% target.
Weather forecasts have trended slightly drier for the eastern Corn belt for the rest of this week, as thunderstorm activity has made exact precipitation locations hard to predict. The EUY is notably wetter than the GFS for IA and S MN through Friday night.
No update for Midwest temps as things will continue to be average to slightly below average for most areas besides the southcentral part of the country through this weekend.
For week-two, forecasts trended cooler and wetter overnight, with the CPC now seeing a broad area in the mid-section of the country with below normal precipitation chances into the last week of August. A low-pressure system over the Ohio Valley keeps temps in the central and eastern Corn Belt average to below average in the same time period.
Have a great day.
Grain Comments: 08-13-2024
Good morning.
Monday’s lower soy complex trade has spilled into day two, as both soybeans and soybean oil futures are sharply lower to start Tuesday. New contract lows have again been scored in both the old and the new crop, while any sort of buying remains mostly absent. The absence of Chinese purchases on the new crop book of business mixed with a massive crop that’s about to be harvested has caused the US balance sheet to balloon. Corn futures this morning are trading 2-3 cents lower, soybean futures are trading 15-16 cents lower and are near their lows, and the Chicago wheat market is down 4-5 cents. Products are lower as well, soybean meal is down around $1/ton, and soybean oil is down 80 points. Outside markets are mostly lower, crude oil futures are down 30-40 cents/bbl, the Dow Jones index is down 20 points, and the US$ index is up 5 points. The S&P500 is near unchanged, and the NASDAQ is up 70 points.
Yesterday afternoon’s weekly crop progress report showed no change to either corn or soybean conditions from the week prior, with corn conditions being 67% g/ex and soybean conditions being 68% g/ex.
Though the national numbers did not change, states that saw the biggest improvement in corn conditions were Texas (+6%), South Dakota (+6%), and Colorado (+6%). Inversely, North Carolina was down 9%, while Illinois and North Dakota were both down 4%.
For soybeans, states that saw the most improvement were North Carolina (+5%), South Dakota (+4%), and Missouri (+3%). Tennessee saw a 6% decline, while Mississippi was down 5% and both Michigan and Ohio were down 4%.
Corn silking reached 94% compared to 88% last week and the five-year average of 94%. 60% of the crop has reached the dough stage, compared to 46% last week and the five-year average of 56%. And 18% of the crop is dented, compared to 7% last week and the five-year average of 12%.
Soybeans blooming reached 91%, compared to 86% last week and the five-year average of 90%. And 72% of the crop is seen setting sods, compared to 59% last week and the five-year average of 70%.
For wheat, winter wheat harvest was seen at 93% complete, up from 88% last week and ahead of the five-year average of 91%. Spring wheat harvest advanced 12% to 18% complete, behind the five-year average of 21%. Conditions in the g/ex category were down 2% to 72%.
FSA data, released after the WASDE report on Monday, showed prevent plant corn acres this year at 2.67 mil, and prevent plant soybean acres at 775k; both are unsurprisingly up significantly from 2023.
Conab, Brazil’s USDA equivalent, will release its August supply & demand update this morning at 7am central time. Trade sees 2023/24 soybean production at 148.57 mmt’s, which would be up slightly from July’s 147.34 mmt estimate. Harvested area is seen fractionally higher at 46.12 mil ha’s.
Brazil 2023/24 soybean total corn production is seen at 117.13 mmt’s, also up slightly from July’s estimate of 115.86 mmt’s. Harvested area is also seen slightly higher at 21.07 mil ha’s, compared to 20.863 last month.
The Argentine government has called for a 15-day period of talks between soy crush workers and ag traders Cargill, Bunge and LDC (Louis Dreyfus). The talks were mandated from Monday following a request by the group of traders, and one of the unions involved has already said it will comply.
Crude oil futures are lower this morning as news that OPEC has lowered its demand forecasts for both 2024 and 2025 is offsetting continually rising tensions in the Middle East. The prospect of Iranian attack on Israel remains but is seemingly on the back burner this morning.
Both headline and core PPI is expected to see a 0.2% increase on a monthly basis, ahead of the more talked about CPI report for July due out tomorrow. On an annual basis, economists are forecasting a 2.3% reading for headline PPI, nearing the Fed’s 2% target.
Weather forecasts have trended slightly drier for the eastern Corn belt for the rest of this week, as thunderstorm activity has made exact precipitation locations hard to predict. The EUY is notably wetter than the GFS for IA and S MN through Friday night.
No update for Midwest temps as things will continue to be average to slightly below average for most areas besides the southcentral part of the country through this weekend.
For week-two, forecasts trended cooler and wetter overnight, with the CPC now seeing a broad area in the mid-section of the country with below normal precipitation chances into the last week of August. A low-pressure system over the Ohio Valley keeps temps in the central and eastern Corn Belt average to below average in the same time period.
Have a great day.
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