Good morning.
Welcome to the first full week of trade for the month of November, and also to election week. Politics will undoubtedly dominate the market headlines at least for the first half of the week, and likely for the duration, as policy outlooks will be heavily debated as to whether they are bullish or bearish the ag space regardless of who the winner is. As has been widely publicized, the perceived big risk to US ag at this point is an impending second round of the trade war with China should Trump be re-elected, while ‘green ag’ policies and agendas surrounding that topic likely stay at the forefront of discussions should Harris be elected. Markets are nonetheless higher to start the week though; corn futures this morning are trading 1-3 cents higher, soybean futures are trading 9-12 cents higher, and the Chicago wheat market is down 1-2 cents. Products are higher, soybean meal is up $2-3/ton, and soybean oil is up 10-20 points. Outside markets are mixed, crude oil futures are up around $2/bbl, the Dow Jones index is unchanged, and the US$ index is down 60 points. The S&P500 is up 10 points, and the NASDAQ is up 15 points. The falling $ has helped other commodity prices early this morning.
Friday afternoon’s commitment of trader’s report showed that as of October 29th, fund traders were seen net-short 17,703 contracts of corn (+53,796 on the week), net-short 72,226 contracts of soybeans (-12,651), and net-short 31,172 contracts of Chicago wheat (-2,257).
In soy products, managed money traders were seen net-long 37,527 contracts of soybean oil (-3,121), and also net-long 37,527 contracts of soybean meal (-43,551).
Aside from the election on Tuesday this week, market participants will also have their attention tuned in to the Fed’s interest rate decision Thursday afternoon, as well as the USDA’s November WASDE report, which is due out Friday morning.
USDA released its monthly fats and oils report, and also the monthly grain crushing report on Friday; starting with the fats and oils, the report showed soybean crush in the month of September at 186.5 mil bu’s, which was up 11% from August, and up nearly 7% from September of last year. Of note, NOPA estimated Sep soybean crush in the US at 177.3 mil bu’s earlier in October.
The report also showed soybean oil stocks (crude oil + once refined oil) at 1.501 bil lbs., which was down 8% from August and down nearly 7% from September of last year. Again, NOPA previously estimated September bean oil stocks at 1.066 bil lbs.
The grain crushing report showed corn used for ethanol in the month of September at 440.2 mil bu’s, which was down just over 8% from August, but up 3% from Sep of last year. Total corn consumption in the month was seen at 490.4 mil bu’s, similarly down 8% for August but up 3% from last year.
Data last week showed Argentina’s ag sector brought in roughly $2.55 bil USD from exports in October this year, which represents an increase of more than 240% from the same month last year; revenues were also up nearly 3% from September, while cumulative YTD revenues are seen up 21%.
Ukraine’s ag ministry indicated grain exports in October had reached nearly 4 mmt’s, which was a near 60% increase from October 2023. Cumulative exports in the season started July 1 are up nearly 56% from last year at 14.4 mmt’s.
US federally inspected pork production in the week ending November 2nd was seen at 566 mil lbs., up 2.4% from last week, but down 0.6% from the same week last year. Beef production was seen at 615 mil lbs., down 0.9% from week prior but up 0.5% from same week last year. YTD pork production is up 1.5% and beef production is down 0.6%.
Oil prices were again higher to start the week this week as OPEC+ agreed to the anticipated delay of its December production cuts, and also as Iran again used escalating rhetoric over the weekend regarding Israel and the wider Middle East.
Circling back to the Fed’s November FOMC meeting that is scheduled for Wednesday-Thursday this week, the CME’s Fed Watch tool currently sees a 98.3% chance of a quarter-point rate cut, and a less than 2% chance at a half-point cut. Brazil makes rate decisions on Wednesday, while the European Central Bank will make a decision on Thursday.
72-hour satellite data shows good rains fell across the US over the weekend, with more continuing to fall this morning and into the first half of the week this week; totals over the weekend ranged from 0.5-3″ generally speaking, with some locally heavier amounts seen in parts of OK/AR in the south.
For this week, models see storms providing an additional 0.5-4″ of precipitation from TX/LA up into WI/MI by Wednesday, before a few dry days then emerge again by the end of the week. Models then see an additional storm system for the weekend/early next week, though agreement in the exact details is lacking. This will be monitored this week.
The CPC’s week two outlook, released yesterday for November 11-17, shows an above average chance at precipitation for nearly the whole of the country besides the far southwest corners of CA/AZ; the EU and GFS ensemble runs are in fair agreement on this, while the EU AI’s outlook is wet, but a bit more spotty in coverage.
Air that is significantly cooler than average will sweep through the western half of the US this week, while ridging allows the east to hold in a mostly above average trend through the week and into the weekend. 10–15-day guidance coming out of the weekend continues to show this pattern generally holding into the middle of the month.
South American rainfall over the weekend was widespread through Brazil, while areas of central and northern Argentina were mostly short-changed; central/northern Brazil received anywhere from 0.5-3″ generally with some locally heavier amounts, while southern Brazil saw totals generally less than 1″.
In Argentina, areas south of Buenos Aires received anywhere from trace amounts to 1.5″, and a small area in the far northeast picked up scattered 1-2″.
Forecast for this week shows that pattern mostly extending, as Argentina is expected to pick up no more than an inch of rain through most of its growing areas over the next week, while all but far southern Brazil sees chances of 1-4″, with some locally heavier amounts possible.
Have a great day.
Grain Comments: 11-04-2024
Good morning.
Welcome to the first full week of trade for the month of November, and also to election week. Politics will undoubtedly dominate the market headlines at least for the first half of the week, and likely for the duration, as policy outlooks will be heavily debated as to whether they are bullish or bearish the ag space regardless of who the winner is. As has been widely publicized, the perceived big risk to US ag at this point is an impending second round of the trade war with China should Trump be re-elected, while ‘green ag’ policies and agendas surrounding that topic likely stay at the forefront of discussions should Harris be elected. Markets are nonetheless higher to start the week though; corn futures this morning are trading 1-3 cents higher, soybean futures are trading 9-12 cents higher, and the Chicago wheat market is down 1-2 cents. Products are higher, soybean meal is up $2-3/ton, and soybean oil is up 10-20 points. Outside markets are mixed, crude oil futures are up around $2/bbl, the Dow Jones index is unchanged, and the US$ index is down 60 points. The S&P500 is up 10 points, and the NASDAQ is up 15 points. The falling $ has helped other commodity prices early this morning.
Friday afternoon’s commitment of trader’s report showed that as of October 29th, fund traders were seen net-short 17,703 contracts of corn (+53,796 on the week), net-short 72,226 contracts of soybeans (-12,651), and net-short 31,172 contracts of Chicago wheat (-2,257).
In soy products, managed money traders were seen net-long 37,527 contracts of soybean oil (-3,121), and also net-long 37,527 contracts of soybean meal (-43,551).
Aside from the election on Tuesday this week, market participants will also have their attention tuned in to the Fed’s interest rate decision Thursday afternoon, as well as the USDA’s November WASDE report, which is due out Friday morning.
USDA released its monthly fats and oils report, and also the monthly grain crushing report on Friday; starting with the fats and oils, the report showed soybean crush in the month of September at 186.5 mil bu’s, which was up 11% from August, and up nearly 7% from September of last year. Of note, NOPA estimated Sep soybean crush in the US at 177.3 mil bu’s earlier in October.
The report also showed soybean oil stocks (crude oil + once refined oil) at 1.501 bil lbs., which was down 8% from August and down nearly 7% from September of last year. Again, NOPA previously estimated September bean oil stocks at 1.066 bil lbs.
The grain crushing report showed corn used for ethanol in the month of September at 440.2 mil bu’s, which was down just over 8% from August, but up 3% from Sep of last year. Total corn consumption in the month was seen at 490.4 mil bu’s, similarly down 8% for August but up 3% from last year.
Data last week showed Argentina’s ag sector brought in roughly $2.55 bil USD from exports in October this year, which represents an increase of more than 240% from the same month last year; revenues were also up nearly 3% from September, while cumulative YTD revenues are seen up 21%.
Ukraine’s ag ministry indicated grain exports in October had reached nearly 4 mmt’s, which was a near 60% increase from October 2023. Cumulative exports in the season started July 1 are up nearly 56% from last year at 14.4 mmt’s.
US federally inspected pork production in the week ending November 2nd was seen at 566 mil lbs., up 2.4% from last week, but down 0.6% from the same week last year. Beef production was seen at 615 mil lbs., down 0.9% from week prior but up 0.5% from same week last year. YTD pork production is up 1.5% and beef production is down 0.6%.
Oil prices were again higher to start the week this week as OPEC+ agreed to the anticipated delay of its December production cuts, and also as Iran again used escalating rhetoric over the weekend regarding Israel and the wider Middle East.
Circling back to the Fed’s November FOMC meeting that is scheduled for Wednesday-Thursday this week, the CME’s Fed Watch tool currently sees a 98.3% chance of a quarter-point rate cut, and a less than 2% chance at a half-point cut. Brazil makes rate decisions on Wednesday, while the European Central Bank will make a decision on Thursday.
72-hour satellite data shows good rains fell across the US over the weekend, with more continuing to fall this morning and into the first half of the week this week; totals over the weekend ranged from 0.5-3″ generally speaking, with some locally heavier amounts seen in parts of OK/AR in the south.
For this week, models see storms providing an additional 0.5-4″ of precipitation from TX/LA up into WI/MI by Wednesday, before a few dry days then emerge again by the end of the week. Models then see an additional storm system for the weekend/early next week, though agreement in the exact details is lacking. This will be monitored this week.
The CPC’s week two outlook, released yesterday for November 11-17, shows an above average chance at precipitation for nearly the whole of the country besides the far southwest corners of CA/AZ; the EU and GFS ensemble runs are in fair agreement on this, while the EU AI’s outlook is wet, but a bit more spotty in coverage.
Air that is significantly cooler than average will sweep through the western half of the US this week, while ridging allows the east to hold in a mostly above average trend through the week and into the weekend. 10–15-day guidance coming out of the weekend continues to show this pattern generally holding into the middle of the month.
South American rainfall over the weekend was widespread through Brazil, while areas of central and northern Argentina were mostly short-changed; central/northern Brazil received anywhere from 0.5-3″ generally with some locally heavier amounts, while southern Brazil saw totals generally less than 1″.
In Argentina, areas south of Buenos Aires received anywhere from trace amounts to 1.5″, and a small area in the far northeast picked up scattered 1-2″.
Forecast for this week shows that pattern mostly extending, as Argentina is expected to pick up no more than an inch of rain through most of its growing areas over the next week, while all but far southern Brazil sees chances of 1-4″, with some locally heavier amounts possible.
Have a great day.
View All News >