This morning’s data from the Labor Department showed that the unemployment rate was steady at 3.7% versus an expected increase to 3.8%. Additionally, 353,000 jobs were added last month. This may indicate that the US economy is doing better than some expected and may also affect the Fed’s next decision on interest rate cuts.
Corn export sales data yesterday showed that they continue to be ahead of the pace needed to meet the USDA’s export goal of 2.1 bb for 23/24.
The US ag attaché for Argentina increased their corn production estimate to 57 mmt, which is 2 mmt over the USDA’s projection. This is a result of higher planted acreage, and anticipation of good weather in the coming months.
According to the US drought monitor, about 28% of the corn area is experiencing drought. This is down from 33% last week, but down significantly from 45% a year ago.
Yesterday’s Fats & Oils report showed soybean oil stocks a bit higher than the expectation. In addition, December soybean crush at 204 mb was up from 200 mb in November, and also 17 mb higher than a year ago.
With the recent heat and dryness, Argentina’s soybean condition is declining. According to the Buenos Aires Grain Exchange, the crop is rated 36% good to excellent vs 44% previously.
Rain is expected to start late next week in Argentina that may bring some relief and recharge soil moisture. However, this is a departure from earlier forecasts that suggested rain would start early next week. If the precipitation does materialize, general coverage of 0.5 to 1.5 inches is expected.
After making a new contract low yesterday, Paris milling wheat futures reversed to post a positive close. They are trading higher again today, which may be offering a boost to the US market. This could be related to news that French farmers have called off their blockades of roadways in major cities. They were reportedly protesting strict government regulations, fewer subsidies, and higher input costs.
Rumors that China may have interest in both French and US wheat are also supportive and may be keeping wheat futures afloat this morning in the face of lower corn and soybeans. However, there has not yet been any confirmation of purchases.
Today a storm is expected to bring moisture to the wheat areas of the US southern plains, benefiting crops there, but may potentially offer weakness to the market. According to the US drought monitor map, just 17% of the winter wheat area is experiencing drought versus 58% a year ago at this time.
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