TFM Midday Update 8-14-2024

CORN

This morning’s CPI data revealed a 2.9% annual increase in consumer prices for July, marking the first time inflation has dipped below 3% since 2021. This slowdown in inflation strengthens the case for a potential interest rate cut by the Fed in September.
On a bullish note, US corn export FOB values are currently the world’s cheapest, beating out both Brazil and Ukraine for the next few months, which may lead to additional export business.
Rain is expected over the Corn Belt over the next few days, and parts of Indiana and Illinois could see 2-3 inches.
Ukraine’s corn crop is projected to reach around 24-25 mmt, down from 32.5 mmt last year. With dry weather expected to persist for the next 10 days, the crop may face further damage.

Soybeans have rebounded this morning after putting in a new contract low overnight at 955 ¼ in the November contract. However, this may be a “dead cat bounce,” as there’s little fundamental change since the release of the WASDE report.
News outlets are reporting that California has proposed limiting the use of soybean and canola oil in biodiesel production, in favor of used cooking oil and other feedstocks. The proposal would not be enacted until 2028, so it does not appear to be affecting the market much today but could be a long term bearish factor.
US soybean FOB export values are said to be at a 60-70 cent discount to Brazil, which should allow for more export business and keep the US as the world’s top soybean supplier for the next few months. Additionally, Chinese demand for US soybeans is expected to increase.

US wheat is attempting to rally today, despite another day in the red for Paris milling wheat futures. September Matif wheat put in another near term low today after leaving another small (0.50 Euro) gap on the chart at the opening of the session.
Russian wheat cash values are said to have been weaker, which may pressure global wheat markets despite wet conditions in their spring wheat growing regions that may affect quality, as rains are expected to continue over the next 10 days in those areas.
Despite lowering US spring wheat production on the WASDE report, the USDA has spring wheat for major producers North Dakota and Minnesota rated 81% and 89% good to excellent, respectively.

Brandon Doherty