Good morning.
Markets at the CBOT are lower to start Wednesday after falling back off the highs going into the close yesterday. Plentiful buying from managed money traders the first two days of the week likely subsides a bit as we get to the week’s halfway point; the trade estimates managed money short covering the last two days at nearly 80k contracts combined of both corn and soybean contracts. Ahead of Monday’s USDA data, as well as the end of the month and the end of the quarter, the spec community will presumably take a more measured approach going through the rest of this week. Otherwise, Midwest rains through the southern and eastern part of the Corn Belt have slowed harvest efforts a bit in this part of the country, while areas further north and west continue to make decent progress. The cash bid structure through the Midwest more or less reflects those who are getting plentiful new crop bushels across the scales (weakening bids) vs those who are not (strengthening bids). Corn futures this morning are trading 2-3 cents lower, soybean futures are trading 8-10 cents lower, and the Chicago wheat market is down 2-3 cents. Products are lower, soybean meal is down $2-3/ton, and soybean oil is down 15-20 points. Outside markets are quiet/mixed, crude oil futures are down 80-90 cents/bbl, the Dow Jones index is down 15 points, and the US$ index is up 5 points. The S&P500 is down 5 points, and the NASDAQ is down 50 points. Gold futures again made new contract highs overnight.
This morning’s weekly ethanol report for the week ending September 20th is expected to show daily production in a range of 1.020-1.069 mil bbls, while stocks for the week are estimated between 23.30-23.985 mil bbls. On average, both figures would be similar to last week.
The USDA’s quarterly hogs and pigs report, due out at 2pm central time tomorrow afternoon, is expected to show the US hog inventory on September 1 at 76.46 mil head, compared to 76.13 mil last year. Hogs kept for breeding are seen down 2% from last year and market hogs are seen increasing nearly 1% from last year.
Workers at Canada’s biggest port in Vancouver went on strike on Tuesday over a labor dispute regarding hours and pay. The port handled more than 50% of the total grain harvested in Canada last year, and officials expect the work stoppage to cost some $26 mil USD/day in lost exports.
According to the Shipping Federation of Canada, affected operations include Vitara Inc’s Cascadia and Pacific Terminals, the Richardson International Terminal, the Cargill Limited Terminal, the G3 Terminal Vancouver and the Alliance Grain Terminal.
Ag Ministry data out of Ukraine released on Wednesday showed grain exports as of September 25th in the season that began July 1 had reached roughly 9.8 mmt’s, compared to roughly 6.2 mmt’s in the same period last year. The volume includes 5.6 mmt’s of wheat, 2.7 mmt’s of corn and 1.3 mmt’s of barley.
China’s state planner has set a 37 mmt/year maximum purchase volume for wheat purchases at the minimum price in both 2025 and 2026, which is similar to the quantity set in 2024. The minimum price was set at 119 yuan/50 kg’s for the coming two years ($16.92 USD), which compares to 118 yuan/50 kg’s last year.
Of note, China buys wheat from local producers at the minimum price when the market price drops below that level in order to support food production and their overall farm economy.
A bipartisan group of US lawmakers on Tuesday unveiled legislation that would ensure only biofuels made from domestically sourced ingredients are eligible for the proposed 45Z tax credit. The bill would also extend the current two-year credit to ten years.
Equity markets are mostly quiet to start Wednesday, as investors continue to debate the effects of yesterday’s announced Chinese stimulus package. There is talk this morning that the PBOC did more rate cuts overnight, lowering the 1-year policy rate from 2.3% to 2.0%, as well as injecting nearly 300 bil yuan into financial institutions, in what were both expected moves.
The emergence of corrective trade is possible across a host of markets – namely the Dow Jones index, the S&P500 index, and gold futures – which are all currently trading at or near all-time highs. In currencies, the yuan traded past the 7:1 milestone to the USD for the first time in nearly a year and a half, which could also spur corrective action into the end of the week.
The weather conversation for Wednesday again starts with Tropical Storm Helene, who is still expected to make landfall across the FL panhandle as a Cat 2/Cat 3 hurricane Thursday night/Friday morning. As mentioned yesterday, how much of the estimated 2-6″ of rainfall can make its way into the Corn Belt will be the million-dollar question for the US row crop farmer.
To that end, the EU model continues to run wetter than the GFS model through the weekend, but neither saw a whole lot of change to either precipitation amounts or locations overnight. 2-6″ of moisture is generally expected through the southeast.
24-hour satellite data showed more showers across the eastern half of the country on Tuesday, with areas generally east of the Mississippi River picking up anywhere from trace amounts to 1.5″. The western US remains dry.
Not a lot of updates to the week-two forecast overnight; models continue to be in good agreement on an overall drier bias for the majority of the country into October 9th, while tropical storm activity keeps the Gulf active. Once Helene has passed, the forecast appears conducive for good harvest progress into the middle of October.
Satellite imagery for South America shows scattered light rains fell over parts of northern Brazil yesterday, while the heaviest rains continue to be seen over southern Brazil/Uruguay. Argentina was mostly dry. Forecast continues to show this pattern into the second week of October, before more regular/widespread rainfall is still expected.
Have a great day.
Grain Comments: 09-25-2024
Good morning.
Markets at the CBOT are lower to start Wednesday after falling back off the highs going into the close yesterday. Plentiful buying from managed money traders the first two days of the week likely subsides a bit as we get to the week’s halfway point; the trade estimates managed money short covering the last two days at nearly 80k contracts combined of both corn and soybean contracts. Ahead of Monday’s USDA data, as well as the end of the month and the end of the quarter, the spec community will presumably take a more measured approach going through the rest of this week. Otherwise, Midwest rains through the southern and eastern part of the Corn Belt have slowed harvest efforts a bit in this part of the country, while areas further north and west continue to make decent progress. The cash bid structure through the Midwest more or less reflects those who are getting plentiful new crop bushels across the scales (weakening bids) vs those who are not (strengthening bids). Corn futures this morning are trading 2-3 cents lower, soybean futures are trading 8-10 cents lower, and the Chicago wheat market is down 2-3 cents. Products are lower, soybean meal is down $2-3/ton, and soybean oil is down 15-20 points. Outside markets are quiet/mixed, crude oil futures are down 80-90 cents/bbl, the Dow Jones index is down 15 points, and the US$ index is up 5 points. The S&P500 is down 5 points, and the NASDAQ is down 50 points. Gold futures again made new contract highs overnight.
This morning’s weekly ethanol report for the week ending September 20th is expected to show daily production in a range of 1.020-1.069 mil bbls, while stocks for the week are estimated between 23.30-23.985 mil bbls. On average, both figures would be similar to last week.
The USDA’s quarterly hogs and pigs report, due out at 2pm central time tomorrow afternoon, is expected to show the US hog inventory on September 1 at 76.46 mil head, compared to 76.13 mil last year. Hogs kept for breeding are seen down 2% from last year and market hogs are seen increasing nearly 1% from last year.
Workers at Canada’s biggest port in Vancouver went on strike on Tuesday over a labor dispute regarding hours and pay. The port handled more than 50% of the total grain harvested in Canada last year, and officials expect the work stoppage to cost some $26 mil USD/day in lost exports.
According to the Shipping Federation of Canada, affected operations include Vitara Inc’s Cascadia and Pacific Terminals, the Richardson International Terminal, the Cargill Limited Terminal, the G3 Terminal Vancouver and the Alliance Grain Terminal.
Ag Ministry data out of Ukraine released on Wednesday showed grain exports as of September 25th in the season that began July 1 had reached roughly 9.8 mmt’s, compared to roughly 6.2 mmt’s in the same period last year. The volume includes 5.6 mmt’s of wheat, 2.7 mmt’s of corn and 1.3 mmt’s of barley.
China’s state planner has set a 37 mmt/year maximum purchase volume for wheat purchases at the minimum price in both 2025 and 2026, which is similar to the quantity set in 2024. The minimum price was set at 119 yuan/50 kg’s for the coming two years ($16.92 USD), which compares to 118 yuan/50 kg’s last year.
Of note, China buys wheat from local producers at the minimum price when the market price drops below that level in order to support food production and their overall farm economy.
A bipartisan group of US lawmakers on Tuesday unveiled legislation that would ensure only biofuels made from domestically sourced ingredients are eligible for the proposed 45Z tax credit. The bill would also extend the current two-year credit to ten years.
Equity markets are mostly quiet to start Wednesday, as investors continue to debate the effects of yesterday’s announced Chinese stimulus package. There is talk this morning that the PBOC did more rate cuts overnight, lowering the 1-year policy rate from 2.3% to 2.0%, as well as injecting nearly 300 bil yuan into financial institutions, in what were both expected moves.
The emergence of corrective trade is possible across a host of markets – namely the Dow Jones index, the S&P500 index, and gold futures – which are all currently trading at or near all-time highs. In currencies, the yuan traded past the 7:1 milestone to the USD for the first time in nearly a year and a half, which could also spur corrective action into the end of the week.
The weather conversation for Wednesday again starts with Tropical Storm Helene, who is still expected to make landfall across the FL panhandle as a Cat 2/Cat 3 hurricane Thursday night/Friday morning. As mentioned yesterday, how much of the estimated 2-6″ of rainfall can make its way into the Corn Belt will be the million-dollar question for the US row crop farmer.
To that end, the EU model continues to run wetter than the GFS model through the weekend, but neither saw a whole lot of change to either precipitation amounts or locations overnight. 2-6″ of moisture is generally expected through the southeast.
24-hour satellite data showed more showers across the eastern half of the country on Tuesday, with areas generally east of the Mississippi River picking up anywhere from trace amounts to 1.5″. The western US remains dry.
Not a lot of updates to the week-two forecast overnight; models continue to be in good agreement on an overall drier bias for the majority of the country into October 9th, while tropical storm activity keeps the Gulf active. Once Helene has passed, the forecast appears conducive for good harvest progress into the middle of October.
Satellite imagery for South America shows scattered light rains fell over parts of northern Brazil yesterday, while the heaviest rains continue to be seen over southern Brazil/Uruguay. Argentina was mostly dry. Forecast continues to show this pattern into the second week of October, before more regular/widespread rainfall is still expected.
Have a great day.
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