Good morning.
CBOT markets are mixed this morning as the grains are lower and the soy complex is slightly higher after again making new contract lows first thing last night. Following the drubbing of the last two days for soybeans, a dead-cat-bounce is likely warranted before week’s end. The trade had been mostly aware of the record yield scenario, but it’s the additional nearly one million acres that the USDA ‘found’ that has caused such a bearish reaction the last couple days. Demand has been better of late, but pace on new crop exports is still well behind recent historical benchmarks and both the US and world balance sheets are anything but tight. This makes rallies to the upside hard pressed until/unless a significant supply issue occurs somewhere else in the world. Corn futures this morning are trading either side of unchanged, soybean futures are 4-5 cents higher, and the Chicago wheat market is down 1-2 cents. Products are higher, soybean meal is up $1-2/ton, and soybean oil is up 40-50 points. Outside markets have been quiet overnight, crude oil futures, all three major stock index futures, and the US$ index are all trading either side of unchanged to start Wednesday.
This morning’s weekly ethanol production report for the week ending August 9th is expected to show daily production in a range of 1.047-1.077 mil bbls, while stocks for the week are seen between 23.60-23.725 mil bbls.
Otherwise, fresh fundamental news looks to be a bit scarce on Wednesday. Macro headlines will likely dominate the morning hours, as all eyes will be on the July CPI report; and the bearish influence from Monday’s USDA numbers has hung over the board like a dark cloud since the data was released.
According to the European Commission, soft wheat exports out of the EU as of August 11th reached 3.1 mmt’s, down 23% from the same period last year. Barley exports are seen 21% lower. The commission notes data for France remains incomplete since the start of 2024.
Same group sees EU corn imports in the same time period up 19% from last year at 2.42 mmt’s, while imports of soybeans have dropped 20% from last year to 1.21 mmt’s. Meal imports are up 13% y/y at 2.24 mmt’s.
According to data released yesterday, the Port of Los Angeles processed more container units than any other July on record last month, as imports of goods surged nearly 38% from the year prior.
Sources say importers are moving peak delivery season of holiday goods ahead due to a myriad of issues including impending tariff increases, shipping disruptions in the Red Sea, and a potential dock-worker strike that is rumored to be planned for this Fall.
Equity markets are quiet this morning in anticipation of today’s CPI numbers which are due out at 7:30am central time. Economists see both the headline and core readings coming in 0.2% higher than June, but these would still be some of the lowest inflation levels since 2021.
Inflation data in the UK, released today, showed headline inflation there rising to 2.2%, which was lower than the trade had expected. Investors see a chance at a possible two additional rate cuts still in 2024 from the Bank of England.
Tropical storm Ernesto is just below hurricane strength as of this morning, with sustained winds of 70mph. The storm is currently just north of Puerto Rico and is still expected to track mostly north from here, staying in the open Atlantic.
Models continue to be in fair agreement on rainfall for the rest of this week; storms will favor the central/northern Midwest, with 0.5-3″ seen for areas of IA/MN/WI/IL generally speaking. The EU has a slightly more north and west bias with this rain than the GFS does.
Temps in the Midwest will continue to be average to slightly below average into this weekend, with heat remaining confined mostly to the south and southwest before temps again become more normal for this time of year into next week.
CPC 8–14-day guidance, released yesterday, shows a pocket of near normal temps for the Ohio Valley and eastern Corn Belt, where this are saw below average temps on yesterday’s guidance. The return of heat in late August will need monitoring, but amid decent soil moisture in most growing areas, the time for heat to be an issue is quickly dissipating.
Week two precipitation maps continue to show a drier stripe through the mid-section of the country, which makes coming thunderstorm activity, and the rainfall they produce, extremely important. Confidence beyond a week, however, remains low.
Have a great day!
Grain Comments: 08-14-2024
Good morning.
CBOT markets are mixed this morning as the grains are lower and the soy complex is slightly higher after again making new contract lows first thing last night. Following the drubbing of the last two days for soybeans, a dead-cat-bounce is likely warranted before week’s end. The trade had been mostly aware of the record yield scenario, but it’s the additional nearly one million acres that the USDA ‘found’ that has caused such a bearish reaction the last couple days. Demand has been better of late, but pace on new crop exports is still well behind recent historical benchmarks and both the US and world balance sheets are anything but tight. This makes rallies to the upside hard pressed until/unless a significant supply issue occurs somewhere else in the world. Corn futures this morning are trading either side of unchanged, soybean futures are 4-5 cents higher, and the Chicago wheat market is down 1-2 cents. Products are higher, soybean meal is up $1-2/ton, and soybean oil is up 40-50 points. Outside markets have been quiet overnight, crude oil futures, all three major stock index futures, and the US$ index are all trading either side of unchanged to start Wednesday.
This morning’s weekly ethanol production report for the week ending August 9th is expected to show daily production in a range of 1.047-1.077 mil bbls, while stocks for the week are seen between 23.60-23.725 mil bbls.
Otherwise, fresh fundamental news looks to be a bit scarce on Wednesday. Macro headlines will likely dominate the morning hours, as all eyes will be on the July CPI report; and the bearish influence from Monday’s USDA numbers has hung over the board like a dark cloud since the data was released.
According to the European Commission, soft wheat exports out of the EU as of August 11th reached 3.1 mmt’s, down 23% from the same period last year. Barley exports are seen 21% lower. The commission notes data for France remains incomplete since the start of 2024.
Same group sees EU corn imports in the same time period up 19% from last year at 2.42 mmt’s, while imports of soybeans have dropped 20% from last year to 1.21 mmt’s. Meal imports are up 13% y/y at 2.24 mmt’s.
According to data released yesterday, the Port of Los Angeles processed more container units than any other July on record last month, as imports of goods surged nearly 38% from the year prior.
Sources say importers are moving peak delivery season of holiday goods ahead due to a myriad of issues including impending tariff increases, shipping disruptions in the Red Sea, and a potential dock-worker strike that is rumored to be planned for this Fall.
Equity markets are quiet this morning in anticipation of today’s CPI numbers which are due out at 7:30am central time. Economists see both the headline and core readings coming in 0.2% higher than June, but these would still be some of the lowest inflation levels since 2021.
Inflation data in the UK, released today, showed headline inflation there rising to 2.2%, which was lower than the trade had expected. Investors see a chance at a possible two additional rate cuts still in 2024 from the Bank of England.
Tropical storm Ernesto is just below hurricane strength as of this morning, with sustained winds of 70mph. The storm is currently just north of Puerto Rico and is still expected to track mostly north from here, staying in the open Atlantic.
Models continue to be in fair agreement on rainfall for the rest of this week; storms will favor the central/northern Midwest, with 0.5-3″ seen for areas of IA/MN/WI/IL generally speaking. The EU has a slightly more north and west bias with this rain than the GFS does.
Temps in the Midwest will continue to be average to slightly below average into this weekend, with heat remaining confined mostly to the south and southwest before temps again become more normal for this time of year into next week.
CPC 8–14-day guidance, released yesterday, shows a pocket of near normal temps for the Ohio Valley and eastern Corn Belt, where this are saw below average temps on yesterday’s guidance. The return of heat in late August will need monitoring, but amid decent soil moisture in most growing areas, the time for heat to be an issue is quickly dissipating.
Week two precipitation maps continue to show a drier stripe through the mid-section of the country, which makes coming thunderstorm activity, and the rainfall they produce, extremely important. Confidence beyond a week, however, remains low.
Have a great day!
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