Written Commentary
MORNING COMMENTS
Macroeconomics:
The average price of a home in the United States in the third quarter of w2024 is $420,400. That is down from the highs of $495,100 in the second quarter of 2023 according to Forbes. 30-year mortgage rates hit a low back in September near 6.0%. Right after the Fed cut rates by 50 basis points. Today they are between 6.5-6.9%. Housing starts were lower in October than expected by about 30K new homes.
Ag Fundamentals:
The US dollar strength relative to currencies around the globe gives the US a disadvantage in the export market. It costs other countries more to convert their currency to the US dollar and buy our products or commodities. Corn is staying competitive in both the gulf and PNW, but wheat has felt the dollar pressure. Wheat adding a “war premium” with Russia now upset with the US for allowing Ukraine to use long-range missiles. Oil and currency markets seem calm enough to take these threats as threats, not promises. Each rain that comes across the US helps winter wheat conditions, easing drought concerns. Corn Dec/March spread traded up close to a 4 month high yesterday at -8’6. Last time we saw the Z/H that tight was July 25th. This is a result of good demand facing a tight gripped farmer, remembering manged money has extended their length above 109K contracts as of Friday. There is not a lot to talk about regarding soybeans. Few to no concerns in South America regarding weather. They are ahead of planting pace leading into the most crucial two growing months -December and January.
The River Gauge at Memphis is showing some strength and is expected to keep St. Louis south in better shape with opportunity to load full drafts. The 28 day experimental forecast is on the bottom. Above -2.5 feet is in the clear.
Housing Starts were down -3.1% to 1.31 million new residential buildings that began in October. Highs before the financial crisis were 2.28 million, lows following the 08 crash were 460K housing starts. For the last 3 years it has mostly been above 1M new buildings each month, aside from a few months following the COVID crash that it fell to 890K at it’s low.
Export & World News
South Korea is looking to buy up to 40K MT of rice. Bangladesh is also looking for rice, to the tune of 50K MT. Bangladesh is also looking to buy 50K MT of milling wheat. Alongside Jordan, who would like to buy up to 120K MT of milling wheat. Algeria is looking to buy 50K MT of Durum wheat, but it is likely they buy up to 400K MT from our Canadian friends up north.
Malaysian palm oil futures were up 31 ringgit overnight, at 4958.
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)
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