Written Commentary
MORNING COMMENTS
Macroeconomics:
The CPI report yesterday showed the lowest annualized percent change is the lowest since March of 2021. Jobless claims higher than expected possibly due to the recent hurricanes and strikes between Boeing and the eastern port. The PPI report came in neutral to cooler than expected with PPI unchanged month over month and core PPI in line with the 0.2% expectations. At this point the Fed is expected to continue cutting rates in November.
Ag Fundamentals:
The USDA will release their October WASDE report at 11:00 am CST today. Most are expecting a neutral report with little changed to the production balance sheet. Corn yield expectations are unchanged to slightly lower than the September 183.6 record number. Dryness over the last couple months has allowed farmers to harvest crops nonstop, but moisture levels are reading lower than desired for both corn and beans. I have heard points around bean yields being potentially higher than the 53.2 bpa September estimate, but the majority of the estimates have bean yields unchanged to slightly lower. Corn usage and exports have given the demand picture optimism. The window for increased Chinese participation in US bean exports is shrinking everyday and they are still not buying large volumes. China knows we have a huge crop this year and are patient to jump on US values even after the drop in values since this spring. Additionally, uncertainty around our trade relationship with China builds while global economies teeter and we have a US election on the horizon. Following today’s report the market will take the weekend to digest the numbers, we may come in Monday to shifting positions, the next 3 weeks will be about the election, Brazilian weather, and the potential Fed rate cut.
Weather:
The US river system needs rain. The Missouri and upper Mississippi river valleys are bone dry and heading into winter with these conditions will cause problems this spring. Long term forecasts are showing potential for rain across the major growing areas. Memphis gauge is below -2.5 ft so we can expect reduced drafts on barges loaded St. Louis-south. No rain in the 7 day forecast will help that, so expect that gauge to at least reach -7 ft by October 18th.
The November Soybean Technical Support at the 50-day moving average. May see stop sell orders triggered at $10.10 in case this report shows a higher production number and we break that support.
Memphis River Gauge This Morning is showing -2.53 ft and falling to below -7 feet in the next 7 days.
The Last 30 Days Percent of Normal Precipitation Map
Export & World News
Japan bought 115K MT of food-quality wheat from the Us, Canada and Australia. South Korea bought 60K Mt of soybean meal. Jordan issued an international tender to buy up to 120K MT of animal feed barley.
Malaysian palm oil futures were up overnight 117 ringgit, at 4350.
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