BQC Afternoon Comments Sept 10.24

Geopolitics:

The second 2024 Presidential Debate is tonight at 8 pm CST hosted by ABC and moderated by ABC’s David Muir and Linsey Davis. Half the country is grabbing their popcorn, the other half will probably avoid tuning in completely. The first votes by military and overseas voters must be mailed in by next Saturday September 21st. The state-side early voting begins on Monday September 16th in Pennsylvania, followed by Minnesota and Virginia where early voting begins on September 20th. Illinois will also be able to send in early votes starting on September 26th. Will this debate be able to change the minds of those planning to vote this month?

Macroeconomics:

The two key inflation reports that will contribute to the Fed’s interest rate cut decision next Wednesday: Consumer and Producer Price Indexes. The CPI coming out tomorrow at 7:30 am CST will be arguable more important than the PPI reported on Thursday morning at 7:30 am CST. There are 3 Federal Reserve meetings left for 2024. Next week’s is on Wednesday September 18th, followed by a meeting on November 7th (2 days after election day) and December 18th. Traders had priced in as much as 120 basis points of reduction in early August meaning we will either come up short of that or the Fed will have to cut rates by more than 25 bps per meeting. It is much more likely that the Fed will cut rates 25-75 basis points between now and year end. This will take Federal Funds Rates from 5.25-5.5% today to possibly 4.5-4.75% by the end of December.

Ag Fundamentals:

The USDA’s WASDE report will be released this Thursday September 12th at 11:00 am CST. Last month the USDA had corn yields at an average 183.1 bushels per acre and bean yields estimated at 53.2 bpa. Corn yield estimates for Thursday’s numbers are 180.5-183.6 on corn and 52.0-54.9 for beans. Last year we had 4 million MORE corn acres than this year’s 82.7M and 4 million LESS soybean acres compared to the 86.2M acres planted this year.

Weather:

As of this afternoon, Francine remains at a tropical storm strength with max winds at 65 mph. Between now and tomorrow afternoon when Fran makes landfall, max wind speeds are expected to increase to 96-110 mph, giving Francine the title of Category 2 hurricane. That’s enough to blow some shingles off the roof but Louisiana Governor Jeff Landry tells residents “not to panic, but be prepared”. we can expect a slow down in gulf export activity for 1-3 days. Francine’s track is expected to climb up the Mississippi River Valley. As it heads north the winds will slow down to mid-40s to 50 mph over central Mississippi and southeast Arkansas. Winds will be down to 25 mph when it reaches Memphis on Thursday. Rain will extend from the gulf up to parts of southern Missouri and Illinois.