Good morning.
Ag markets at the CBOT are surprisingly higher coming out of the weekend to start Monday; both the corn and the soybean charts had become a bit oversold again by the end of the day on Friday, which is likely supporting this morning’s small bounce. Otherwise, it was another busy weekend of harvest across the US, with many producers likely to have their corn and soybean crops both out of the ground by this time next week. As we mentioned last week, the US harvest winding down will increasingly turn attention to South America, where rains over the past 10-15 days have provided a near-ideal start to the growing season, albeit about two weeks later than normal. Corn futures are trading 1-2 cents higher to start the week, soybean futures are up 4-6 cents, and the Chicago wheat market is up 2-3 cents. Products are higher, soybean meal is up $1/ton, and soybean oil is up 40-50 points. Outside markets are mixed, crude oil futures are trading $1.40-1.50/bbl higher, the Dow Jones index is down 100 points, and the US$ index is up 20 points. The S&P500 is down 20 points, and the NASDAQ is down 130 points. Of note, metals are sharply higher again to start the week with Dec gold again making new contract highs at 2,751.70/oz overnight.
Friday afternoon’s CFTC commitment of trader’s report showed for the week ending October 15th, funds were now net-short 86,988 contracts of corn (-63,259 on the week), net-short 40,341 contracts of soybeans (-18,542), and net-short 26,013 contracts of Chicago wheat (+3,436).
In soy products, funds are now seen net-long 26,938 contracts of soybean oil (-5,565 on the week) and are net-long 55,71 contracts of soybean meal (-40,877).
Canada on Friday announced measures for Canadian firms to request a temporary remission of tariffs that were imposed on October 1 on EV’s from China, as well as steel and aluminum products; the move has led to speculation that trade tensions could ease, causing Beijing to reconsider its anti-dumping probe into Canadian canola.
Staying with China, the Kazakh Minister of Ag on Friday said that Kazakhstan and China had made an agreement that Chinese companies would import 100k tons of grain and 100k tons of oilseeds ‘in the near future.’
Ukraine’s ag ministry said over the weekend that 42.8 mmt’s of grains and legumes had been harvested so far this season as of Friday, up from 39.2 mmt’s as of the same date last year; corn harvest has reached 13.2 mmt’s compared to 9.28 mmt’s last year.
US federally inspected beef production in the week ending October 19th totaled 524 mil lbs., up 3.8% from last week; pork production in the week totaled 556 mil lbs., up 1.3% from the week prior. For the year, beef production is down 0.7% from last year, and pork production is up 1.6%.
Equity markets in the US this week will be a bit quiet data-wise, with the only real notable report being durable goods orders for September, due at the end of the week. Otherwise, markets will focus on a rate cut decision by the Bank of Canada on Wednesday, and also comments from ECB President Christine Lagarde on the same day.
China over the weekend expectedly made more lending rate cuts, but Asian markets mostly shrugged the news and traded marginally higher; the one-year loan prime rate was lowered by 25 basis points to 3.10%, while the 5-year LPR was lowered by the same amount to 3.6%.
Not a ton of new updates in the Middle East over the weekend; Israeli Prime Minister Netanyahu held meetings with his top aides to discuss the next move on Iran following a drone explosion near his private residence.
Satellite data for the US shows rains fell in the southwest portion of the country over the weekend, with totals ranging from 0.01″ to 4″; the heaviest amounts were seen in the northeast corner of NM into southern CO. This band of rains also stretched light precipitation to the north/northwest Corn Belt, but the rest of the country remained dry.
Looking ahead to this week, rains will continue to fall in the southwest/southcentral parts of the country the first part of the week, before the eastern half of the country begins to see several chances at precipitation between now and the end of the month.
The EU model is forecasting a system bringing 2-4″ from OK up through MI next Tuesday/Wednesday, which looks to be the best rainfall chance for the central Corn Belt in weeks.
Week-two forecast runs have also trended wetter over the weekend, showing above average precipitation chances for much of the mid-section of the country into the first days of November. The runs are also in better agreement than what was seen to end last week, which is raising confidence.
On the temp side, most of the country will continue to see above average temperatures for mid-October through mid-week, with highs staying in the upper 60’s/lower 70’s for much of the Midwest. A brief bout of colder air will drop through the northeast on Thursday, but things look to stay warm overall into the coming weekend otherwise.
In South America, most all of Brazil besides the far southern tip picked up good rains over the weekend, with 72-hour satellite data showing totals ranging anywhere from 0.1″ to nearly 6″ in some local areas. Argentina, however, was on the dry side with only areas in the far north near the border with Paraguay receiving any moisture.
The forecast for the week was mostly unchanged over the weekend; Brazil will continue to see a good mix of rain and sunshine in the central and northern growing regions through this week, while Argentina will see a bit heavier precipitation in the south while the north will be on the drier side.
Temperature outlook for the two countries remains similar to last week; Argentina will see below average temps in the western part of the country, while Brazil will stay hot in the south but will be more seasonal throughout the rest of the country.
Have a great day.
Grain Comments: 10-21-2024
Good morning.
Ag markets at the CBOT are surprisingly higher coming out of the weekend to start Monday; both the corn and the soybean charts had become a bit oversold again by the end of the day on Friday, which is likely supporting this morning’s small bounce. Otherwise, it was another busy weekend of harvest across the US, with many producers likely to have their corn and soybean crops both out of the ground by this time next week. As we mentioned last week, the US harvest winding down will increasingly turn attention to South America, where rains over the past 10-15 days have provided a near-ideal start to the growing season, albeit about two weeks later than normal. Corn futures are trading 1-2 cents higher to start the week, soybean futures are up 4-6 cents, and the Chicago wheat market is up 2-3 cents. Products are higher, soybean meal is up $1/ton, and soybean oil is up 40-50 points. Outside markets are mixed, crude oil futures are trading $1.40-1.50/bbl higher, the Dow Jones index is down 100 points, and the US$ index is up 20 points. The S&P500 is down 20 points, and the NASDAQ is down 130 points. Of note, metals are sharply higher again to start the week with Dec gold again making new contract highs at 2,751.70/oz overnight.
Friday afternoon’s CFTC commitment of trader’s report showed for the week ending October 15th, funds were now net-short 86,988 contracts of corn (-63,259 on the week), net-short 40,341 contracts of soybeans (-18,542), and net-short 26,013 contracts of Chicago wheat (+3,436).
In soy products, funds are now seen net-long 26,938 contracts of soybean oil (-5,565 on the week) and are net-long 55,71 contracts of soybean meal (-40,877).
Canada on Friday announced measures for Canadian firms to request a temporary remission of tariffs that were imposed on October 1 on EV’s from China, as well as steel and aluminum products; the move has led to speculation that trade tensions could ease, causing Beijing to reconsider its anti-dumping probe into Canadian canola.
Staying with China, the Kazakh Minister of Ag on Friday said that Kazakhstan and China had made an agreement that Chinese companies would import 100k tons of grain and 100k tons of oilseeds ‘in the near future.’
Ukraine’s ag ministry said over the weekend that 42.8 mmt’s of grains and legumes had been harvested so far this season as of Friday, up from 39.2 mmt’s as of the same date last year; corn harvest has reached 13.2 mmt’s compared to 9.28 mmt’s last year.
US federally inspected beef production in the week ending October 19th totaled 524 mil lbs., up 3.8% from last week; pork production in the week totaled 556 mil lbs., up 1.3% from the week prior. For the year, beef production is down 0.7% from last year, and pork production is up 1.6%.
Equity markets in the US this week will be a bit quiet data-wise, with the only real notable report being durable goods orders for September, due at the end of the week. Otherwise, markets will focus on a rate cut decision by the Bank of Canada on Wednesday, and also comments from ECB President Christine Lagarde on the same day.
China over the weekend expectedly made more lending rate cuts, but Asian markets mostly shrugged the news and traded marginally higher; the one-year loan prime rate was lowered by 25 basis points to 3.10%, while the 5-year LPR was lowered by the same amount to 3.6%.
Not a ton of new updates in the Middle East over the weekend; Israeli Prime Minister Netanyahu held meetings with his top aides to discuss the next move on Iran following a drone explosion near his private residence.
Satellite data for the US shows rains fell in the southwest portion of the country over the weekend, with totals ranging from 0.01″ to 4″; the heaviest amounts were seen in the northeast corner of NM into southern CO. This band of rains also stretched light precipitation to the north/northwest Corn Belt, but the rest of the country remained dry.
Looking ahead to this week, rains will continue to fall in the southwest/southcentral parts of the country the first part of the week, before the eastern half of the country begins to see several chances at precipitation between now and the end of the month.
The EU model is forecasting a system bringing 2-4″ from OK up through MI next Tuesday/Wednesday, which looks to be the best rainfall chance for the central Corn Belt in weeks.
Week-two forecast runs have also trended wetter over the weekend, showing above average precipitation chances for much of the mid-section of the country into the first days of November. The runs are also in better agreement than what was seen to end last week, which is raising confidence.
On the temp side, most of the country will continue to see above average temperatures for mid-October through mid-week, with highs staying in the upper 60’s/lower 70’s for much of the Midwest. A brief bout of colder air will drop through the northeast on Thursday, but things look to stay warm overall into the coming weekend otherwise.
In South America, most all of Brazil besides the far southern tip picked up good rains over the weekend, with 72-hour satellite data showing totals ranging anywhere from 0.1″ to nearly 6″ in some local areas. Argentina, however, was on the dry side with only areas in the far north near the border with Paraguay receiving any moisture.
The forecast for the week was mostly unchanged over the weekend; Brazil will continue to see a good mix of rain and sunshine in the central and northern growing regions through this week, while Argentina will see a bit heavier precipitation in the south while the north will be on the drier side.
Temperature outlook for the two countries remains similar to last week; Argentina will see below average temps in the western part of the country, while Brazil will stay hot in the south but will be more seasonal throughout the rest of the country.
Have a great day.
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