Good morning.
And welcome to interest rate day. Harvest happenings and other ag-specific market themes will be ‘back-burnered’ for the most part on Wednesday, as macro spill over will grab most of the attention. Volume in corn and beans is significantly better this morning than was seen yesterday, though this is probably just managed money covering some risk ahead of this afternoon’s decision. Keep in mind, a stronger US$ makes US exports less competitive on the global market. Otherwise, a specific reason for this morning’s pop in soybean prices is lacking. Corn futures are trading 1-2 cents higher to start Wednesday, soybean futures are up 12-13 cents, and the Chicago wheat market is up 2-3 cents. Products are higher, soybean meal is up $3-4/ton, and soybean oil is up 60-70 points. Outside markets are mixed, crude oil futures are down 50-60 cents/bbl, the Dow Jones index is up 20 points, and the US$ index is down 10 points. The S&P500 and NASDAQ are both near unchanged.
This morning’s weekly ethanol production report for the week ending September 13th is expected to show daily production in a range of 1.020-1.100 mil bbls, while stocks are seen in a range of 23.200-23.914 mil bbls. On average, the production estimate would be up marginally from last week, while stocks would be slightly lower.
Chinese customs data shows August corn imports at 430k tons, which is down nearly 64% from the same month last year. Cumulative imports through the month were seen at 12.56 mmt’s, down nearly 16% from last year. Soybean imports at 12.140 mmt’s were up almost 30% from the same month last year, while cumulative imports at 70.480 mmt’s are up 2.8% from last year.
Conab, in a presentation given on Tuesday, said they see Brazilian soybean planted area in the 2024/25 season increasing nearly 3% to 47.4 mil ha’s; along with an almost 10% expected increase in yield, this would produce a crop of nearly 166 mmt’s, which would be up roughly 13% from 2023/24.
On the demand side, exports are seen increasing by roughly 13% to 104.8 mmt’s, while soybean crush is seen increasing by nearly 8% to 56.7 mmt’s.
Same group sees Brazil corn production in the 2024/25 season at 119.8 mmt’s, which would be up 3.6% from last year. Exports are seen decreasing by nearly 6% to 34 mmt’s, while domestic use is estimated 3.3% higher than last year at 87 mmt’s.
Conab also mentioned they see Brazilian beef production in 2025 at 9.78 mmt’s being down roughly 4% from the year prior, following 2024’s record production year of more than 10 mmt’s. Despite a pull-back in production, exports are still seen increasing by about 2.5% to 3.66 mmt’s.
Private ag analyst APK-Inform in a report on Tuesday said they expect soybean production in Ukraine to hit a record in 2024 despite less-than-ideal weather through most of the growing season. The claim was based on an increase in planted area, which officials see at 2.66 mil ha’s; this would be up nearly 44% from 2023.
The CME’s FedWatch tool currently shows a 63% chance of a 50 basis-point interest rate cut later today, and a 37% chance at 25 basis-point cut; most economists, however, favor the chances of just a 25-point cut. The Fed is set to give a decision at 1pm central time Wednesday afternoon.
More of the same on satellite observed precipitation over the last 24 hours; areas in the west from Montana to the OK/TX panhandles picked up anywhere from 0.01″ to an inch, with some locally heavier amounts. Areas of North Carolina and Virginia also saw similar rainfall totals.
Weather models overnight added some moisture for the central Midwest early next week, as a cold front produces a system that could drop anywhere from 0.5-3″ of rainfall from Nebraska through eastern Illinois and into Indiana. Exact amounts/locations will be monitored the rest of this week.
Week-two forecasts continue to expand drier conditions across the mid-section of the country, while the southeast and east coast hold in a wetter bias. The CPC, EU ensemble and GFS ensemble are all in fair agreement on their week two output.
On the temperature side, warm weather hangs around for most of the Midwest through Friday, before a trough brings cooler air from the west to the east by early next week. Highs in IN/OH stay in the mid/upper 80’s through Sunday, while highs in KS/NE/the Dakotas top out in the 60’s/low 70’s by Sunday.
Satellite data shows light/scattered showers across the southern portion of Brazil on Tuesday, but otherwise most of the country was dry. Argentina also saw mostly dry conditions on Tuesday.
Have a great day.
Grain Comments: 09-18-2024
Good morning.
And welcome to interest rate day. Harvest happenings and other ag-specific market themes will be ‘back-burnered’ for the most part on Wednesday, as macro spill over will grab most of the attention. Volume in corn and beans is significantly better this morning than was seen yesterday, though this is probably just managed money covering some risk ahead of this afternoon’s decision. Keep in mind, a stronger US$ makes US exports less competitive on the global market. Otherwise, a specific reason for this morning’s pop in soybean prices is lacking. Corn futures are trading 1-2 cents higher to start Wednesday, soybean futures are up 12-13 cents, and the Chicago wheat market is up 2-3 cents. Products are higher, soybean meal is up $3-4/ton, and soybean oil is up 60-70 points. Outside markets are mixed, crude oil futures are down 50-60 cents/bbl, the Dow Jones index is up 20 points, and the US$ index is down 10 points. The S&P500 and NASDAQ are both near unchanged.
This morning’s weekly ethanol production report for the week ending September 13th is expected to show daily production in a range of 1.020-1.100 mil bbls, while stocks are seen in a range of 23.200-23.914 mil bbls. On average, the production estimate would be up marginally from last week, while stocks would be slightly lower.
Chinese customs data shows August corn imports at 430k tons, which is down nearly 64% from the same month last year. Cumulative imports through the month were seen at 12.56 mmt’s, down nearly 16% from last year. Soybean imports at 12.140 mmt’s were up almost 30% from the same month last year, while cumulative imports at 70.480 mmt’s are up 2.8% from last year.
Conab, in a presentation given on Tuesday, said they see Brazilian soybean planted area in the 2024/25 season increasing nearly 3% to 47.4 mil ha’s; along with an almost 10% expected increase in yield, this would produce a crop of nearly 166 mmt’s, which would be up roughly 13% from 2023/24.
On the demand side, exports are seen increasing by roughly 13% to 104.8 mmt’s, while soybean crush is seen increasing by nearly 8% to 56.7 mmt’s.
Same group sees Brazil corn production in the 2024/25 season at 119.8 mmt’s, which would be up 3.6% from last year. Exports are seen decreasing by nearly 6% to 34 mmt’s, while domestic use is estimated 3.3% higher than last year at 87 mmt’s.
Conab also mentioned they see Brazilian beef production in 2025 at 9.78 mmt’s being down roughly 4% from the year prior, following 2024’s record production year of more than 10 mmt’s. Despite a pull-back in production, exports are still seen increasing by about 2.5% to 3.66 mmt’s.
Private ag analyst APK-Inform in a report on Tuesday said they expect soybean production in Ukraine to hit a record in 2024 despite less-than-ideal weather through most of the growing season. The claim was based on an increase in planted area, which officials see at 2.66 mil ha’s; this would be up nearly 44% from 2023.
The CME’s FedWatch tool currently shows a 63% chance of a 50 basis-point interest rate cut later today, and a 37% chance at 25 basis-point cut; most economists, however, favor the chances of just a 25-point cut. The Fed is set to give a decision at 1pm central time Wednesday afternoon.
More of the same on satellite observed precipitation over the last 24 hours; areas in the west from Montana to the OK/TX panhandles picked up anywhere from 0.01″ to an inch, with some locally heavier amounts. Areas of North Carolina and Virginia also saw similar rainfall totals.
Weather models overnight added some moisture for the central Midwest early next week, as a cold front produces a system that could drop anywhere from 0.5-3″ of rainfall from Nebraska through eastern Illinois and into Indiana. Exact amounts/locations will be monitored the rest of this week.
Week-two forecasts continue to expand drier conditions across the mid-section of the country, while the southeast and east coast hold in a wetter bias. The CPC, EU ensemble and GFS ensemble are all in fair agreement on their week two output.
On the temperature side, warm weather hangs around for most of the Midwest through Friday, before a trough brings cooler air from the west to the east by early next week. Highs in IN/OH stay in the mid/upper 80’s through Sunday, while highs in KS/NE/the Dakotas top out in the 60’s/low 70’s by Sunday.
Satellite data shows light/scattered showers across the southern portion of Brazil on Tuesday, but otherwise most of the country was dry. Argentina also saw mostly dry conditions on Tuesday.
Have a great day.
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