Written Commentary
CLOSING COMMENTS
Geopolitics:
President Joe Biden and his administration is not expected to push through the final guidelines for tax credits pertaining to ethanol and sustainable aviation fuel before he leaves office in January. This falls under the Inflation Reduction Act that President-Elect Trump has promised to repeal.
Macroeconomics:
Today’s JOLTS report came in +225K job openings higher than the average estimate. The Labor market is closely monitored by the Fed when making decisions about whether to cut rates. Today’s report contradicts the market’s 70% probability of a -25 basis point cut later this month. Fed Chair Powell is expected to speak tomorrow at 12:45pm CST. Unemployment claims will be release on Thursday morning and the Unemployment rate/Earnings report will be out on Friday morning.
Ag Fundamentals:
Corn usage in the first two months of the 24/25 marketing year is up to 908 million bushels, which is a 6 year high. Census soybean crush in October was reported at 216 million bushels, a new record high and a 16% increase from September. Bean oil stocks are down to a 10 year low and spot board crush margins are up 7¢ to just over 1.10 per bushel. Russian wheat conditions are the worst in 10 years, rated 37% poor, as the crop enters mid-season and heads into winter exposure.
Today’s JOLTS Report (Job Openings and Labor Turnover Survey) reported 7.74 million job openings in October (the largest increase month-over-month since August 2023). That is up 372K from September, but hiring slumped to 5.31 million, down 269K on the month.
The Fed Watch Probability is now leaning toward a -25 basis point cut on December 18th.
Calendar Spreads
Spread | Last | Chg | Full | % of FC |
CH25/CK25 | -5 3/4 | +3/4 | -20 3/4 | 28% |
SF25/SH25 | -6 1/2 | 0 | -26 | 25% |
SH25/SK25 | -12 | +1/2 | -26 3/4 | 45% |
SF24/SN25 | -30 1/4 | +3/4 | -79 3/4 | 38% |
MWH25/MWK25 | -7 3/4 | +1/4 | -20 1/4 | 38% |
WH25/WK25 | -9 | – 1/2 | -16 | 56% |
KWH25/KWK25 | -7 3/4 | – 1/2 | -15 3/4 | 49% |
Cost of Carry
no current data available
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
>>Interested in more commentary by Joe Mauck? Go HERE
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