Good morning.
Higher overnight trade in the stock index futures has so far been unable to spill over into the ag markets to start Thursday, as corn, soybeans and wheat are all lower. Yesterday’s interest rate decision by the Fed allowed a bit of money to return to the equity space, but the question now at the CBOT becomes whether any of this money finds its way into the ag space. In the post-covid world of high interest rates, money managers in general have allocated less of their portfolio to commodities than what was common just five years ago. Corn futures this morning are trading 2-3 cents lower, soybean futures are down 2-4 cents, and the Chicago wheat market is down 5-6 cents. Products are mixed/higher, soybean meal is trading either side of unchanged, and soybean oil is up 10-20 points. Outside markets are mostly higher, crude oil futures are up 70-80 cents/bbl, the Dow Jones index is up 500 points, and the US$ index is up 10 points. The S&P500 is up 90 points, and the NSADQ is up 420 points. Of note, gold, silver and copper futures are all also sharply higher this morning.
This morning’s weekly export sales report for the week ending September 12th is expected to show corn sales in a range of 550k-1.4 mil mt’s, soybean sales in a range of 500k-1.6 mil mt’s, and wheat sales in a range of 300k-650k mt’s.
The cattle on feed report for September, due out tomorrow afternoon, is expected to show the US feedlot herd as of September 1 increasing to 11.195 mil head, which would be up 0.9% from last year. Placements in August are seen down 1% at 1.983 mil head, and marketings in August are seen down 3.4% at 1.820 mil head.
French farm office FranceAgriMer released updated supply and demand estimates on Wednesday; the report showed the estimate of the soft wheat crop was lowered by 3.9 mmt’s to 25.78 mmt’s. This resulted in exports to EU countries being lowered by 0.5 mmt’s, while exports to countries outside the EU were lowered by 3.5 mmt’s.
Data out of Brazil yesterday showed farm export revenues in the country in the month of August totaled $14.13 bil, which was down roughly 9.5% from the same month last year. This makes cumulative farm export revenues from January through August down 0.6% from the same period last year.
Brazil’s Foreign Trade Chamber also announced yesterday that it would be raising the country’s wheat import quota for the rest of the year in an effort to prevent potential shortages in the market that would lead to higher prices.
An ag producer’s union in Ukraine says the country’s exportable surplus of corn in the 2024/25 season is likely to be about half of what it was last year at 15-17 mmt’s. 2023/24 corn exports totaled nearly 30 mmt’s. Ukraine’s farm ministry currently estimates corn exports in the 2024/25 season at 22 mmt’s.
The Fed did not go so far on Wednesday as to declare ‘total victory’ over the war on inflation but got about as close as they ever will to such a statement. Powell said the move was not so much one of playing ‘catch-up’ but instead a sign of the Fed’s commitment to not fall behind going forward.
Going forward, traders now see an additional 70+ points worth of cuts coming between now and the end of the year. The Fed’s ‘dot plot’ currently implies an additional 50 basis points worth of cuts will be seen.
Other interest rate news on Thursday came from the EU, where the Bank of England held its benchmark lending rate steady again at 5% for the second consecutive month. Officials took a more cautious tone than that of the US Fed yesterday, saying they anticipated a slower rate of easing compared to their counterpart through the next year.
Aside from weekly jobless data due out this morning, the economic data slate on Thursday will be otherwise quiet. The bank of Japan is set to make an interest rate decision after cutting rates last month for the first time since 2020.
A low-pressure system continues to spin through the northwest, providing an additional 0.01″ to 2″ of rainfall for parts of Montana/North Dakota/Minnesota and up into Canada on Wednesday. The southeast and east coast also continue to pick up moisture from tropical storms in the Atlantic.
A coming cold front over the weekend looks to provide the best moisture chances for most of the Corn Belt in several weeks, though the GFS model is noticeably drier in its output than the EU model is. The GFS also has rains favoring areas further to the south. The EU sees totals of up to 5″ for parts of NE/IA/MO.
Week-two forecasts continue to have a wetter bias for the east coast, but vary in amounts/exact locations; the EU ensemble sees a wetter bias as far west as AR/MO, while the CPC and GFS ensemble see wet conditions only getting as far east as OH/KY.
Heat is seen lingering through the Midwest for a few more days, before cooler air moves in from the west by the middle of next week. Into the end of next week, most of the Corn Belt will see close to average temperatures.
Satellite data for South America shows next to no rainfall fell in Argentina and Brazil on Wednesday. Forecasts continue to show scattered shower potential in southern Brazil/northern Argentina over the next 10 days, while better rains are still seen showing up into the first weeks of October.
Have a great day.
Grain Comments: 09-19-2024
Good morning.
Higher overnight trade in the stock index futures has so far been unable to spill over into the ag markets to start Thursday, as corn, soybeans and wheat are all lower. Yesterday’s interest rate decision by the Fed allowed a bit of money to return to the equity space, but the question now at the CBOT becomes whether any of this money finds its way into the ag space. In the post-covid world of high interest rates, money managers in general have allocated less of their portfolio to commodities than what was common just five years ago. Corn futures this morning are trading 2-3 cents lower, soybean futures are down 2-4 cents, and the Chicago wheat market is down 5-6 cents. Products are mixed/higher, soybean meal is trading either side of unchanged, and soybean oil is up 10-20 points. Outside markets are mostly higher, crude oil futures are up 70-80 cents/bbl, the Dow Jones index is up 500 points, and the US$ index is up 10 points. The S&P500 is up 90 points, and the NSADQ is up 420 points. Of note, gold, silver and copper futures are all also sharply higher this morning.
This morning’s weekly export sales report for the week ending September 12th is expected to show corn sales in a range of 550k-1.4 mil mt’s, soybean sales in a range of 500k-1.6 mil mt’s, and wheat sales in a range of 300k-650k mt’s.
The cattle on feed report for September, due out tomorrow afternoon, is expected to show the US feedlot herd as of September 1 increasing to 11.195 mil head, which would be up 0.9% from last year. Placements in August are seen down 1% at 1.983 mil head, and marketings in August are seen down 3.4% at 1.820 mil head.
French farm office FranceAgriMer released updated supply and demand estimates on Wednesday; the report showed the estimate of the soft wheat crop was lowered by 3.9 mmt’s to 25.78 mmt’s. This resulted in exports to EU countries being lowered by 0.5 mmt’s, while exports to countries outside the EU were lowered by 3.5 mmt’s.
Data out of Brazil yesterday showed farm export revenues in the country in the month of August totaled $14.13 bil, which was down roughly 9.5% from the same month last year. This makes cumulative farm export revenues from January through August down 0.6% from the same period last year.
Brazil’s Foreign Trade Chamber also announced yesterday that it would be raising the country’s wheat import quota for the rest of the year in an effort to prevent potential shortages in the market that would lead to higher prices.
An ag producer’s union in Ukraine says the country’s exportable surplus of corn in the 2024/25 season is likely to be about half of what it was last year at 15-17 mmt’s. 2023/24 corn exports totaled nearly 30 mmt’s. Ukraine’s farm ministry currently estimates corn exports in the 2024/25 season at 22 mmt’s.
The Fed did not go so far on Wednesday as to declare ‘total victory’ over the war on inflation but got about as close as they ever will to such a statement. Powell said the move was not so much one of playing ‘catch-up’ but instead a sign of the Fed’s commitment to not fall behind going forward.
Going forward, traders now see an additional 70+ points worth of cuts coming between now and the end of the year. The Fed’s ‘dot plot’ currently implies an additional 50 basis points worth of cuts will be seen.
Other interest rate news on Thursday came from the EU, where the Bank of England held its benchmark lending rate steady again at 5% for the second consecutive month. Officials took a more cautious tone than that of the US Fed yesterday, saying they anticipated a slower rate of easing compared to their counterpart through the next year.
Aside from weekly jobless data due out this morning, the economic data slate on Thursday will be otherwise quiet. The bank of Japan is set to make an interest rate decision after cutting rates last month for the first time since 2020.
A low-pressure system continues to spin through the northwest, providing an additional 0.01″ to 2″ of rainfall for parts of Montana/North Dakota/Minnesota and up into Canada on Wednesday. The southeast and east coast also continue to pick up moisture from tropical storms in the Atlantic.
A coming cold front over the weekend looks to provide the best moisture chances for most of the Corn Belt in several weeks, though the GFS model is noticeably drier in its output than the EU model is. The GFS also has rains favoring areas further to the south. The EU sees totals of up to 5″ for parts of NE/IA/MO.
Week-two forecasts continue to have a wetter bias for the east coast, but vary in amounts/exact locations; the EU ensemble sees a wetter bias as far west as AR/MO, while the CPC and GFS ensemble see wet conditions only getting as far east as OH/KY.
Heat is seen lingering through the Midwest for a few more days, before cooler air moves in from the west by the middle of next week. Into the end of next week, most of the Corn Belt will see close to average temperatures.
Satellite data for South America shows next to no rainfall fell in Argentina and Brazil on Wednesday. Forecasts continue to show scattered shower potential in southern Brazil/northern Argentina over the next 10 days, while better rains are still seen showing up into the first weeks of October.
Have a great day.
View All News >