Good morning.
Another quiet/low volume night of trade has been had at the CBOT, with wheat futures again making new contract lows by a few ticks. Markets need a bullish catalyst to stop some of the computer/momentum selling that has been taking place for weeks, but amid forecasts that are not extremely threatening and with harvest just a few weeks away, that catalyst has been non-existent. Rising energy prices via tensions in the Middle East have helped support, but farmers would rather a bullish ag-specific story, such as increased demand, as opposed to ‘proxy-support’ from ongoing geopolitical happenings. Corn futures this morning are around a penny lower, soybean futures are down 1-2 cents, and the Chicago wheat market is down 3-4 cents. Products are mixed, soybean meal is up $1-2/ton, and soybean oil is down 20-30 points. Outside markets are mostly lower, crude oil futures are down 30-40 cents/bbl, the Dow Jones index is down 20 points, and the US$ index is unchanged. The S&P500 and the NASDAQ are also both near unchanged.
Yesterday afternoon’s crop progress report showed as of Sunday, August 25th, 65% of the corn crop was rated g/ex (-2% on the week), and 67% of the soybean was crop was rated g/ex (-1%).
At the state level, only states that improved on corn conditions for the week were North Dakota (+11%), South Dakota (+3%), North Carolina (+2%), and Wisconsin (+1%). Biggest declines were in Colorado (-13%), Ohio (-8%), Nebraska (-4%), and Pennsylvania (-4%).
States with the biggest improvements in soybean conditions were North Dakota (+6%), South Dakota (+4%), Arkansas (+2%), and Michigan (+2%). Biggest declines were seen in Louisiana (-10%), Ohio (-8%), Kentucky (-6%), and Illinois (-6%).
84% of the corn crop has reached the dough stage, compared to the five-year average of 83%; and 46% of the crop is seen dented, compared to the five-year average of 42%. 11% of the crop has reached maturity.
The number of soybeans setting pods ticked up to 89% vs the five-year average of 88%; and in the first reading of the season, 6% of the crop is seen dropping leaves compared to the five-year average of 4%.
For wheat, spring wheat conditions were seen declining 4% in the g/ex category to 69%, while harvest progress advanced 20% to 51% complete. Average harvest pace for this week is 53%.
The Rosario Grains Exchange in Argentina said on Monday that recent rains were not enough to lift the prospects of the growing wheat crop, which has struggled with dryness all season. Rains are forecast for the next 10 days, but confidence is low that totals will be enough to make a difference.
The EU’s MARS (Monitoring Agricultural Resources) unit on Monday lowered the estimate of the union’s corn yield to 7.03 tons/hectare, which is down from their previous estimate of 7.24 tons, and also below the five-year average of 7.35 tons.
Same group also lowered their estimate of soft wheat yields in the EU to 5.68 tons/hectare, down from their previous estimate of 5.87 tons and the five-year average of 5.86 tons.
Stock index futures had a quiet start to the week on Monday, as traders and investors mostly waited for earnings from AI-bell-cow Nvidia this week, and also PCE inflation data that is due out in the coming days.
Despite ongoing increasing tensions in the Middle East, Goldman Sachs and Morgan Stanley both lowered their price forecasts for crude oil in 2025, citing increasing supply both from OPEC+ and elsewhere in the world. The two see prices averaging below $80/bbl and expect the market to be in a surplus.
San Francisco Federal Reserve President Mary Daly on Monday echoed sentiments from Fed Chair Powell last week that the time had arrived to begin cutting rates. When asked if there was anything that could derail a September cut, Daly responded, “it would be hard to imagine at this point.”
The GFS is wetter in IA/IL for the remainder of this week than was seen yesterday, but otherwise not a lot of forecast changes were seen the last 24 hours. As mentioned, exact precipitation amounts/locations will vary due to ridge-riding thunderstorm activity.
24-hour satellite data shows portions of NE, SD, MN, and WI picked up anywhere from trace amounts to 1″, with some locally heavier amounts. A band of showers also provided similar moisture totals to an area from NM up through southeast CO and northwest KS and into NE.
Highs in the eastern Corn Belt continue to reach into the mid/upper 90’s for the rest of this week, before moderating a bit into the three-day holiday weekend. Temps next week are then still seen returning to below average levels.
8–14-day outlooks from the CPC agree with this sentiment, seeing average to below average temps for most of the eastern half of the country into September 9th. Precipitation in the same time frame is seen near normal for most of the country’s mid-section, while the northwest and southeast see above average moisture.
Have a great day.
Grain Comments: 08-27-2024
Good morning.
Another quiet/low volume night of trade has been had at the CBOT, with wheat futures again making new contract lows by a few ticks. Markets need a bullish catalyst to stop some of the computer/momentum selling that has been taking place for weeks, but amid forecasts that are not extremely threatening and with harvest just a few weeks away, that catalyst has been non-existent. Rising energy prices via tensions in the Middle East have helped support, but farmers would rather a bullish ag-specific story, such as increased demand, as opposed to ‘proxy-support’ from ongoing geopolitical happenings. Corn futures this morning are around a penny lower, soybean futures are down 1-2 cents, and the Chicago wheat market is down 3-4 cents. Products are mixed, soybean meal is up $1-2/ton, and soybean oil is down 20-30 points. Outside markets are mostly lower, crude oil futures are down 30-40 cents/bbl, the Dow Jones index is down 20 points, and the US$ index is unchanged. The S&P500 and the NASDAQ are also both near unchanged.
Yesterday afternoon’s crop progress report showed as of Sunday, August 25th, 65% of the corn crop was rated g/ex (-2% on the week), and 67% of the soybean was crop was rated g/ex (-1%).
At the state level, only states that improved on corn conditions for the week were North Dakota (+11%), South Dakota (+3%), North Carolina (+2%), and Wisconsin (+1%). Biggest declines were in Colorado (-13%), Ohio (-8%), Nebraska (-4%), and Pennsylvania (-4%).
States with the biggest improvements in soybean conditions were North Dakota (+6%), South Dakota (+4%), Arkansas (+2%), and Michigan (+2%). Biggest declines were seen in Louisiana (-10%), Ohio (-8%), Kentucky (-6%), and Illinois (-6%).
84% of the corn crop has reached the dough stage, compared to the five-year average of 83%; and 46% of the crop is seen dented, compared to the five-year average of 42%. 11% of the crop has reached maturity.
The number of soybeans setting pods ticked up to 89% vs the five-year average of 88%; and in the first reading of the season, 6% of the crop is seen dropping leaves compared to the five-year average of 4%.
For wheat, spring wheat conditions were seen declining 4% in the g/ex category to 69%, while harvest progress advanced 20% to 51% complete. Average harvest pace for this week is 53%.
The Rosario Grains Exchange in Argentina said on Monday that recent rains were not enough to lift the prospects of the growing wheat crop, which has struggled with dryness all season. Rains are forecast for the next 10 days, but confidence is low that totals will be enough to make a difference.
The EU’s MARS (Monitoring Agricultural Resources) unit on Monday lowered the estimate of the union’s corn yield to 7.03 tons/hectare, which is down from their previous estimate of 7.24 tons, and also below the five-year average of 7.35 tons.
Same group also lowered their estimate of soft wheat yields in the EU to 5.68 tons/hectare, down from their previous estimate of 5.87 tons and the five-year average of 5.86 tons.
Stock index futures had a quiet start to the week on Monday, as traders and investors mostly waited for earnings from AI-bell-cow Nvidia this week, and also PCE inflation data that is due out in the coming days.
Despite ongoing increasing tensions in the Middle East, Goldman Sachs and Morgan Stanley both lowered their price forecasts for crude oil in 2025, citing increasing supply both from OPEC+ and elsewhere in the world. The two see prices averaging below $80/bbl and expect the market to be in a surplus.
San Francisco Federal Reserve President Mary Daly on Monday echoed sentiments from Fed Chair Powell last week that the time had arrived to begin cutting rates. When asked if there was anything that could derail a September cut, Daly responded, “it would be hard to imagine at this point.”
The GFS is wetter in IA/IL for the remainder of this week than was seen yesterday, but otherwise not a lot of forecast changes were seen the last 24 hours. As mentioned, exact precipitation amounts/locations will vary due to ridge-riding thunderstorm activity.
24-hour satellite data shows portions of NE, SD, MN, and WI picked up anywhere from trace amounts to 1″, with some locally heavier amounts. A band of showers also provided similar moisture totals to an area from NM up through southeast CO and northwest KS and into NE.
Highs in the eastern Corn Belt continue to reach into the mid/upper 90’s for the rest of this week, before moderating a bit into the three-day holiday weekend. Temps next week are then still seen returning to below average levels.
8–14-day outlooks from the CPC agree with this sentiment, seeing average to below average temps for most of the eastern half of the country into September 9th. Precipitation in the same time frame is seen near normal for most of the country’s mid-section, while the northwest and southeast see above average moisture.
Have a great day.
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