BQC Morning Comments Aug 30.24

Ag Fundamentals:

Egypt’s largest recorded tender, seeking 3.8 million MT of wheat was sparked by intelligence within Egypt sounding alarms of food security concerns. Egypt is one of the worlds largest wheat importers and seemed to turn heads within the market after issuing the tender. they have only been able to originate 7% of the total sought. Since May of this year the price of grain products in Egypt have tripled amidst the fear of restricted imports due to the tensions in the Middle east and the Black Sea.

Weather:

Big storms occur when there is heat at the surface and colder air higher in the atmosphere. When you have that combination, the atmosphere turns over which creates storms. The instability of the atmosphere over the Atlantic Ocean during August was low and the wind shear was high which lowered the probability of tropical storms. The characteristics of the atmosphere that prevented the creation of storms over the last month are now starting to fade away bringing in more prone-to-storm characteristics. There is still 12 days to go before we reach peak hurricane season historically. The Atlantic Meridional Mode (AMM) is in a very positive phase right now. Signs that this is the case include: warm gulf temps, warm ocean surface temperatures from the gulf to the eastern edge of Africa, cold waters straight east of Brazil, signs of La Nina in the surface temps west of South America, pressure dropping in the northern/central Atlantic and pressure rising in the south/central Atlantic. During this last month this dynamic has also influenced dryer weather in Brazil.  If the AMM stays positive, we could see storm storms in the tropics and continued dryer than normal weather in South America.