Good morning.
Markets are quiet in Chicago this morning to start the last trading day of the week, with volume down from recent mornings. Today’s trade presumably remains on the choppy side, as position squaring/short covering ahead of next week’s USDA report offsets some early harvest hedge pressure from the elevators in the southern portion of the ag belt. Whether USDA adjusts yields is the million dollar question, but from a demand standpoint at least on corn, the old crop balance sheet should get a small boost from ethanol demand which likely keeps new crop carry out near 2 bil bu’s. Corn futures this morning are trading either side of unchanged, soybean futures are down 1-2 cents, and the Chicago wheat market is up 2-3 cents. Products are mixed, soybean meal is up around $1/ton, and soybean oil is down 10-20 points. Outside markets are mixed, crude oil futures are up 50-60 cents/bbl, the Dow Jones index is down 150 points, and the US$ index is down 10 points. The S&P500 is down 30 points, and the NASDAQ is down 200 points.
Of note to the financial markets on deliveries, 960 contracts of 30-year T-bonds were assigned, as well as 200 contracts of 2-year notes, 234 contracts of 5-year notes, and 882 contracts of 10-year notes.
This morning’s weekly export sales report for the week ending August 29th, delayed a day this week due to the Labor Day holiday, is expected to show old crop corn sales in a range of (100k) – 100k mt’s, and old crop soybean sales in a range of (200k) – 200k mt’s.
New crop corn sales are estimated between 700k – 1.4 mil mt’s, new crop soybean sales are estimated between 800k – 2.0 mil mt’s, and new crop wheat sales are estimated between 300k – 600k mt’s.
According to the Brazilian Trade Ministry, corn exports in the month of August were down 35% from last year at 6.1 mmt’s, and soybean exports in the month were down 4% from last year at 8 mmt’s.
Argentina’s two main soy crush worker unions reached a wage agreement with ag traders according to sources familiar with the situation, ending the threat of a prolonged work stoppage at Argentina’s main ports. The statement says union leaders negotiated a 26% pay raise, after negotiating a 76%increase earlier in the year.
The UN’s FAO (Food and Agriculture Organization) showed global food prices in August declined for a second straight month, as falls in prices of sugar, grains, and meats offset increases in the cost of veg-oils and dairy products.
Same group sees total world wheat production in 2024 at 791.4 mil tons, up almost 3 mil tons from last year, and up from the July forecast of 789.1 mil tons. Coarse grain production is seen down 7 mil tons from the July estimate, on cuts in the EU, Mexico and Ukraine.
China has announced a ban on imports of poultry and related products from Poland, due to an outbreak of H5N1 avian flu; the ban is set to take effect immediately.
The USDA estimated farm income falling less than originally expected in its latest forecast; officials see income coming in just 4.4% lower than last year at $140 bil, compared to their February estimate of a nearly 26% reduction. $140 mil would be roughly 15% above the twenty-year average, but down about 28% from 2022’s record year.
Barge shipments down the Mississippi River in the week ending August 31st were down 17% from last week at 481k tons; corn shipments were down 10% at 305k tons, and soybean shipments were down 23% 141k tons.
Traders are assuming today’s non-farm payrolls report will be one of the final deciding factors on what size rate cut occurs in the Fed’s September meeting. Hiring is expected to show a small uptick, while the unemployment rate is seen falling marginally.
Unexpected light rains fell across portions of IL/IN/MI last night, while WI also saw good rains over the last 24 hours. Totals were light, with most areas receiving only a tenth or two. Best rains were in WI, where totals reached near 1″ in some places.
Otherwise, again not a lot of change was noted overnight in the short term forecast. Mostly dry conditions will remain through the Corn Belt into next week, while temps are seen falling to possibly record lows in the next 48 hours.
Summer heat is not completely gone, however, as models see high pressure returning to the central part of the country into next week, bringing temps back to above average levels.
Week-two forecasts saw a slight shift overnight, as the EU ensemble is now more like the EU AI model in seeing tropical storm activity bringing moisture further inland and up into the Ohio River Valley. The GFS has not taken this shift, which means this development will need monitoring.
Have a great day.
Grain Comments: 09-06-2024
Good morning.
Markets are quiet in Chicago this morning to start the last trading day of the week, with volume down from recent mornings. Today’s trade presumably remains on the choppy side, as position squaring/short covering ahead of next week’s USDA report offsets some early harvest hedge pressure from the elevators in the southern portion of the ag belt. Whether USDA adjusts yields is the million dollar question, but from a demand standpoint at least on corn, the old crop balance sheet should get a small boost from ethanol demand which likely keeps new crop carry out near 2 bil bu’s. Corn futures this morning are trading either side of unchanged, soybean futures are down 1-2 cents, and the Chicago wheat market is up 2-3 cents. Products are mixed, soybean meal is up around $1/ton, and soybean oil is down 10-20 points. Outside markets are mixed, crude oil futures are up 50-60 cents/bbl, the Dow Jones index is down 150 points, and the US$ index is down 10 points. The S&P500 is down 30 points, and the NASDAQ is down 200 points.
Of note to the financial markets on deliveries, 960 contracts of 30-year T-bonds were assigned, as well as 200 contracts of 2-year notes, 234 contracts of 5-year notes, and 882 contracts of 10-year notes.
This morning’s weekly export sales report for the week ending August 29th, delayed a day this week due to the Labor Day holiday, is expected to show old crop corn sales in a range of (100k) – 100k mt’s, and old crop soybean sales in a range of (200k) – 200k mt’s.
New crop corn sales are estimated between 700k – 1.4 mil mt’s, new crop soybean sales are estimated between 800k – 2.0 mil mt’s, and new crop wheat sales are estimated between 300k – 600k mt’s.
According to the Brazilian Trade Ministry, corn exports in the month of August were down 35% from last year at 6.1 mmt’s, and soybean exports in the month were down 4% from last year at 8 mmt’s.
Argentina’s two main soy crush worker unions reached a wage agreement with ag traders according to sources familiar with the situation, ending the threat of a prolonged work stoppage at Argentina’s main ports. The statement says union leaders negotiated a 26% pay raise, after negotiating a 76%increase earlier in the year.
The UN’s FAO (Food and Agriculture Organization) showed global food prices in August declined for a second straight month, as falls in prices of sugar, grains, and meats offset increases in the cost of veg-oils and dairy products.
Same group sees total world wheat production in 2024 at 791.4 mil tons, up almost 3 mil tons from last year, and up from the July forecast of 789.1 mil tons. Coarse grain production is seen down 7 mil tons from the July estimate, on cuts in the EU, Mexico and Ukraine.
China has announced a ban on imports of poultry and related products from Poland, due to an outbreak of H5N1 avian flu; the ban is set to take effect immediately.
The USDA estimated farm income falling less than originally expected in its latest forecast; officials see income coming in just 4.4% lower than last year at $140 bil, compared to their February estimate of a nearly 26% reduction. $140 mil would be roughly 15% above the twenty-year average, but down about 28% from 2022’s record year.
Barge shipments down the Mississippi River in the week ending August 31st were down 17% from last week at 481k tons; corn shipments were down 10% at 305k tons, and soybean shipments were down 23% 141k tons.
Traders are assuming today’s non-farm payrolls report will be one of the final deciding factors on what size rate cut occurs in the Fed’s September meeting. Hiring is expected to show a small uptick, while the unemployment rate is seen falling marginally.
Unexpected light rains fell across portions of IL/IN/MI last night, while WI also saw good rains over the last 24 hours. Totals were light, with most areas receiving only a tenth or two. Best rains were in WI, where totals reached near 1″ in some places.
Otherwise, again not a lot of change was noted overnight in the short term forecast. Mostly dry conditions will remain through the Corn Belt into next week, while temps are seen falling to possibly record lows in the next 48 hours.
Summer heat is not completely gone, however, as models see high pressure returning to the central part of the country into next week, bringing temps back to above average levels.
Week-two forecasts saw a slight shift overnight, as the EU ensemble is now more like the EU AI model in seeing tropical storm activity bringing moisture further inland and up into the Ohio River Valley. The GFS has not taken this shift, which means this development will need monitoring.
Have a great day.
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