TFM Midday Update 09-06-2024

CORN

The USDA reported net cancellations of 6.8 mb of corn export sales for 23/24, but an increase of 71.7 mb for 24/25. Shipments last week at 41.8 mb far exceeded the 26.3 mb pace needed per week to reach the USDA’s export goal of 2.250 bb.
This morning’s jobs report showed that unemployment fell to 4.2% from 4.3% in July. However, the economy added 142,000 jobs, which was less than the 161,000 expected. This makes it a bit more uncertain as to how much of an interest rate cut the Fed will make later this month, with some expecting a 25 basis point reduction and others expecting 50 basis points.
Brazil’s weather forecast suggests above-normal temperatures and below-normal precipitation for most of September. This may prevent early corn planting by farmers there.
Yesterday’s EIA data indicated ethanol production at 1.061 million barrels per day. That was down 10,000 barrels from the previous week, but still the second largest amount for this week of the year and was still up 5% from last year.

The USDA reported net cancellations of 8.4 mb of soybean export sales for 23/24, but an increase of 60.9 mb for 24/25. Shipments last week at 18.0 mb fell below the 21.4 mb pace needed per week to reach the USDA’s export goal of 1.700 bb.
Weather looks mostly dry into mid-September, which is not ideal for finishing the soybean crop. But after the next 10 days, the EU weather model suggests that rain may return to the central US.
Soybean planting is set to begin this weekend in Brazil. However, major producing state Mato Grosso has not had much rain since April, with some reports that it is the worst drought in 40 years. This could ultimately delay soybean plating.
Soybean oil is lower this morning and is pressuring soybean futures. This may be in part due to palm oil being down about 2% for the week. Palm oil inventory in Malaysia is said to be at a six-month high.

The USDA reported an increase of 12.5 mb of wheat export sales for 24/25, and net cancellations of 0.4 mb for 25/26. Shipments last week at 23.4 mb exceeded the 15.9 mb pace needed per week to reach the USDA’s export goal of 825 mb.
December Paris milling wheat futures are higher this morning. If they close higher, it would be eight out of the last nine sessions with a positive close. Nevertheless, US wheat is mixed to lower at midday, and not receiving much support from the Matif contracts.
According to the Buenos Aires Grain Exchange, they have left their estimate of Argentina’s wheat production unchanged at 18.5 mmt. This is despite dry conditions in some key growing regions.
Daily stochastics show overbought conditions for all three US wheat classes. This could result in downside pressure as the market corrects technically.

Brandon Doherty