Good morning.
Back-and-forth we go in the ag markets as yesterday’s losses are now today’s gains and vice versa. Sideways trade has been the theme for most of the month of August, and that trend looks to continue into the closing days of the month with just two sessions left before the calendar flips to September. Traders are staring down the start of the US harvest, and as we’ve mentioned ad nauseum the last few weeks, they will be slow to take on large new positions until that data either confirms or denies what we’ve been trading for months. We see the odds favoring a crop that is close to what’s being projected currently, while current market levels are likely close to fair value on soybeans and maybe slightly below fair value on corn.
Corn futures this morning are trading around a penny higher, soybean futures are up 8-12 cents, and the Chicago wheat market is down 4-5 cents. Products are higher, soybean meal is up $2-3/ton, and soybean oil is up 50-60 points. Outside markets are mostly higher as well, crude oil futures are 30-50 cents/bbl higher, the Dow Jones index is up 270 points, and the US$ index is up 10 points. The S&P500 is up 15 points, and the NASDAQ is up 50 points and more than 300 points off its overnight lows.
This morning’s weekly export sales report for the week ending August 22nd is expected to show old crop corn sales in a range of (100k)-200k mt’s, and old crop soybean sales in a range of (150k)-150k mt’s.
Yesterday’s EIA report showed crude oil stocks were down 0.846 mil bbls to 425.183 mil bbls, which was a smaller draw than what was expected. Gas stocks were down 2.203 mil bbls at 218.394 mil, and distillate stocks were up 0.275 mil bbls at 123.086 mil. Implied gas demand was seen at 9.307 mil bbls/day, vs 9.193 mil last week and 9.068 mil last year.
Germany’s government sees total grain production out of the country this year at 34.5 mil tons, which would be down more than 9% from last year. The ag ministry said last year’s wet fall, a record warm spring with late frosts, and then a wet summer that caused flooding were all factors in the decline.
A private French analyst sees France’s soft wheat exports to nations outside the EU falling by more than 60% from last year to 4.1 mmt’s. This would be the lowest since 2001/02 and compares to the recent five-year average of nearly 10 mmt’s.
The group did mention though that supply to the domestic market, as well as exports within the EU, would be able to be sustained despite the harvest being its lowest in some 40 years.
Clean Fuels Alliance America sent a letter to Treasury Secretary Janet Yellen yesterday urging her to issue guidance on the much discussed 45Z clean fuel tax credit by September 1st. The group says fuel producers are having difficulties finalizing feedstock contracts, securing capital flows, and meeting project deadlines without knowing the value of the credit.
Investors will turn their attention to US Q2 GDP data due out this morning, following Nvidia results yesterday that were mostly above trade expectations but not in the ‘blow-out’ territory that traders have become accustomed to recently.
Markets will also see a weekly update to the more watched of late weekly jobs report, which will give a fresh update on the labor market this morning. And then the Fed’s preferred inflation gauge, the PCE price index, will be out on Friday morning.
On the US political front, democratic nominee Kamala Harris and her VP Tim Walz are set to give their first interview of their campaign tonight on CNN at 8pm central time.
Rainfall on Wednesday was seen in a narrow band from eastern MO through the southern parts of IL/IN/OH and into WV. Totals ranged from trace amounts to 1″ generally speaking, with locally heavier amounts. North Dakota also picked up decent rains, as well as the southern part of the US and Gulf coast.
Models see continued thunderstorm activity in the eastern part of the country through the rest of this week and into the weekend, though totals and locations will be widely variable. Next week continues to look mostly dry, but the GFS is bringing in more moisture into next weekend. This will need monitoring.
Week-two forecasts otherwise remain in good agreement with a wetter bias for the south and southeast, while dryness is expected for most of the northern and central parts of the country. Temps continue to be seen average to below in the east and average to above in the west.
On the temp front, forecast remains mostly the same with heat in the east lingering for another roughly 48 hours, before temps become more seasonal into the weekend, and then fall back to mostly below average into next week.
Updates in South America were again minimal over the last 24 hours. The EU 10-day forecast sees scattered rain chances favoring northern Argentina, while Brazil remains nearly entirely dry.
Have a great day.
Grain Comments: 08-29-2024
Good morning.
Back-and-forth we go in the ag markets as yesterday’s losses are now today’s gains and vice versa. Sideways trade has been the theme for most of the month of August, and that trend looks to continue into the closing days of the month with just two sessions left before the calendar flips to September. Traders are staring down the start of the US harvest, and as we’ve mentioned ad nauseum the last few weeks, they will be slow to take on large new positions until that data either confirms or denies what we’ve been trading for months. We see the odds favoring a crop that is close to what’s being projected currently, while current market levels are likely close to fair value on soybeans and maybe slightly below fair value on corn.
Corn futures this morning are trading around a penny higher, soybean futures are up 8-12 cents, and the Chicago wheat market is down 4-5 cents. Products are higher, soybean meal is up $2-3/ton, and soybean oil is up 50-60 points. Outside markets are mostly higher as well, crude oil futures are 30-50 cents/bbl higher, the Dow Jones index is up 270 points, and the US$ index is up 10 points. The S&P500 is up 15 points, and the NASDAQ is up 50 points and more than 300 points off its overnight lows.
This morning’s weekly export sales report for the week ending August 22nd is expected to show old crop corn sales in a range of (100k)-200k mt’s, and old crop soybean sales in a range of (150k)-150k mt’s.
Yesterday’s EIA report showed crude oil stocks were down 0.846 mil bbls to 425.183 mil bbls, which was a smaller draw than what was expected. Gas stocks were down 2.203 mil bbls at 218.394 mil, and distillate stocks were up 0.275 mil bbls at 123.086 mil. Implied gas demand was seen at 9.307 mil bbls/day, vs 9.193 mil last week and 9.068 mil last year.
Germany’s government sees total grain production out of the country this year at 34.5 mil tons, which would be down more than 9% from last year. The ag ministry said last year’s wet fall, a record warm spring with late frosts, and then a wet summer that caused flooding were all factors in the decline.
A private French analyst sees France’s soft wheat exports to nations outside the EU falling by more than 60% from last year to 4.1 mmt’s. This would be the lowest since 2001/02 and compares to the recent five-year average of nearly 10 mmt’s.
The group did mention though that supply to the domestic market, as well as exports within the EU, would be able to be sustained despite the harvest being its lowest in some 40 years.
Clean Fuels Alliance America sent a letter to Treasury Secretary Janet Yellen yesterday urging her to issue guidance on the much discussed 45Z clean fuel tax credit by September 1st. The group says fuel producers are having difficulties finalizing feedstock contracts, securing capital flows, and meeting project deadlines without knowing the value of the credit.
Investors will turn their attention to US Q2 GDP data due out this morning, following Nvidia results yesterday that were mostly above trade expectations but not in the ‘blow-out’ territory that traders have become accustomed to recently.
Markets will also see a weekly update to the more watched of late weekly jobs report, which will give a fresh update on the labor market this morning. And then the Fed’s preferred inflation gauge, the PCE price index, will be out on Friday morning.
On the US political front, democratic nominee Kamala Harris and her VP Tim Walz are set to give their first interview of their campaign tonight on CNN at 8pm central time.
Rainfall on Wednesday was seen in a narrow band from eastern MO through the southern parts of IL/IN/OH and into WV. Totals ranged from trace amounts to 1″ generally speaking, with locally heavier amounts. North Dakota also picked up decent rains, as well as the southern part of the US and Gulf coast.
Models see continued thunderstorm activity in the eastern part of the country through the rest of this week and into the weekend, though totals and locations will be widely variable. Next week continues to look mostly dry, but the GFS is bringing in more moisture into next weekend. This will need monitoring.
Week-two forecasts otherwise remain in good agreement with a wetter bias for the south and southeast, while dryness is expected for most of the northern and central parts of the country. Temps continue to be seen average to below in the east and average to above in the west.
On the temp front, forecast remains mostly the same with heat in the east lingering for another roughly 48 hours, before temps become more seasonal into the weekend, and then fall back to mostly below average into next week.
Updates in South America were again minimal over the last 24 hours. The EU 10-day forecast sees scattered rain chances favoring northern Argentina, while Brazil remains nearly entirely dry.
Have a great day.
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