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BQC Morning Comments Sept 9.24

September 9, 2024
Joe Mauck
@TradewithAFS

MORNING COMMENTS

Geopolitics:

US presidential candidates Donald Trump and VP Kamala Harris are expected to debate tomorrow, Sept 10th, at 8:00 pm CST. The Debate will be held at the National Constitution Center in Philadelphia.

Macroeconomics:

60% of the US refining capacity is located in the path of the developing tropical storm that is expected to track through the Gulf of Mexico and hit parts of Texas and Louisiana by Thursday this week. Brent November futures dipped below $68 per barrel last week and the support from the potential storm delays have oil markets up this morning, Brent now at $71.56. OPEC has delayed its planned production boost originally scheduled for October. They are now expected to start increasing production this December. We could see Brent tick higher towards $85 per barrel in the coming months. Any changes in Chinese demand will be a big factor.

Ag Fundamentals:

Brazilian dryness continues this week and into next. Forecasting experts will be monitoring the development of the Monsoon season over the next month and it will be crucial for soybean planting in south America. Right now, the soil moisture is too low and the ground is too firm to perform a successful planting operation in Brazil’s major growing areas. they need several inches of rain on those areas to soften the ground and allow for proper seed penetration. Harvest is entering it’s second and third week in the southern/Mid-south states in the US. Quality has not been a major concern yet, but yields in the Delta have not been overly impressive. Some fields being cut now are coming in with slightly lower than expected yields, but still better than 5 year averages. The tropical storm expected to hit Louisiana on Wednesday night may help improve the lower Mississippi river levels. Potential rains from this event have not yet been calc’d into the NOAA river gauge forecasts. Relief on the river should allow barge freight values to ease back closer to normal values.

Weather:

Most of the US is clear on today’s radar, excluding Texas. Most of the conversation is I focused around the potential hurricane brewing in the gulf of Mexico today. The storm is expected to reach hurricane status by Wednesday and will hit the northern gulf coast by Wednesday night/Thursday morning. I imagine river gauge forecasts will improve this week.

EXPORT AND WORLD NEWS

China bought more beans this morning, 132K MT from this morning’s USDA flash report. Algeria issued an international tender to purchase 120K MT of animal feed corn from South American sellers. Japan is looking to buy 65K MT of feed wheat by then end of the year. Jordan’s state grain buyer issued an international tender to buy up to 120K MT of milling wheat.

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