Dan Flynn is the writer of The Corn & Ethanol Report, a daily market letter covering grains, energies, and various global issues that are the driving force and backbone of the commodity markets. Contact Mr. Flynn at (312) 264-4374
We kickoff the day with Trade Balance, Exports & Imports at 7:30 A.M., Redbook YoY at 7:55 A.M., RCM/Tipp Economic Optimism Index at 9:10 A.M., Total Household Debt at 10:00 A.M., 42-Day & 52-Week Bill Auction at 10:30 A.M., 3-Year Note Auction at 12:00 P.M., API Energy Stocks at 3:30 P.M., and LMI Logistics Managers Index.
Charlie Gasparino a Business Journalist and frequent panelist on Fox Business Network, and author of “Go Woke, Go Broke,” in a nutshell said how beautiful the US economy is which sends signals of being on the right track or totally backwards. If it’s working, don’t fix it. My coined phrase is, “Let the market seek its own level.” Gasparino went on to say since Day 1 of the current administration, the war on energy, fracking, Keystone Pipeline XL, and drilling offshore to name a few of disastrous moves fueled inflation. Also, in the administration infinite wisdom also raised taxes and raised regulation and the markets reminded us yesterday what bad moves these were. They should have kept the working policies that were in place before them, and the markets reminded us of that yesterday. Jeff Cox with CNBC reported power points that could have could have prevented the bleeding. Chicago Fed President Austan Goolsbee said Monday on CNBC that the Central Bank would react to weakness in the economy. :I’m not going to bind our hands of what should happen going forward because we’re still going to get more information. But if were not overheating, we should not be tightening or restrictive in real terms,” he said. Markets expect the Fed to head into an aggressive easing mode, starting in September with an 0.5 percentage -point rate cut. Personally, I would want the Fed to cut more aggressively before September and whispers on the street, are in agreement. After the close there was a judgement on Google that it was an illegal monopoly. Asian markets rebounded after a brutal rout yesterday, and the yen rally pauses, after the Nikkie suffers the worst one-day selloff since the 1987 crash. A lot of downside stock action since Thursday. Last week’s Illinois Production Cost Report showed Central Illinois farm diesel prices in a range of $2.96-$3.16/Gal with an average price of $3.03. This was down $.13 from early July but still $.19 over the mid-June low. NYMEX diesel futures and the bi-weekly Central Illinois diesel values. Seasonally, diesel futures tend to forge a low in August then rally into the b4th quarter, so it’s possible that a longer-term low was scored yesterday. Producers should consider Plains, N Midwest booking diesel fuel weakness to forward book harvest needs. On the Weather Front Tropical Storm Debby with historic heavy rainfall across southeast Georgia and eastern South Carolina through Friday will likely result in flooding. Heavy rainfall will likely result in flooding impacts from northern North Carolina through portions of mid-Atlantic States and southern New England through Sunday morning. The storm is moving at 40 knots. Another concern is Disturbance 1 located in the Western Caribbean Sea and Southwestern Gulf of Mexico. The 7-day formation chance is low at 30%. However, this storm will have to be monitored as the path of the storm could affect the energy sector. Weather Models Struggle Beyond 5 Days; Midwest Temps Cool; Rain Favors W Plains, N Midwest, East Coast: The major forecasting models are at odds over the Central US rainfall beyond this weekend. The GFS introducing a Gulf tropical storm Aug, but no other model has followed. Ag Resources (ARC) advises caution in committing to US weather outlooks beyond 5-6 days amid the coming outsized influence of the tropics. Nearby, flooding rainfall of 5-15” is forecast across the eastern seaboard, where crops in Georgia, the Carolina’s and Virginia have already suffered from exceptional drought. Abandonment is a concern there. Helpful rainfall of .50-1.50” impacts MN/WI in the next 24 hours. Similar totals are forecast in CO, W KS, and W NE Fri-Sun. A pattern of near-zero rainfall expected in the remainder of the temp profile develops in all but the S Plains after today. The GFS model’s projected 8-day change has ARC’s work suggests a Gulf hurricane is needed to boost E Plains & Midwest soil moisture prior to August. CBOT
Corn Ends Firm; Non-US Basis Rally Continues; US Crop Rating Down 1%: Corn market largely absorbed. pen interest fell 20,056 contracts in corn, 8,526 contracts in soybeans, and 3,163 contracts d financial panic selling on Monday. Cash market in Ukraine and South America continue to indicate supply dislocation, and US export data continues to reflect an abnormal shift to the US from others for summer delivery. Export Inspections in the week ending Aug 1 totaled 48 Mil Bu, vs. 15 Mil in the same week last year. ARC estimates July Census corn exports at 216 Mil Bu, vs. 95 Mil in 2023. Aug exports demand in unseasonally strong and WASDE is too low with their 2023/24 US corn export forecast of 2,225 Mil Bu. The US crop on Sunday was rated at 67 GD/EX, vs. 68% the prior week and vs, 62% on average in early August. Private yield estimates will come fast over the next 4 days. ARC maintains Dec corn at $4.00 has value and USDA must print a yield more than 183 BPA to renew corn’s bearish trend. Its all about the US corn supply nearby, but a seasonal low is forecast by the end of August and a demand led bull market is in the offing as 2024/25 US total corn demand rises above 15 Bil Bu. Once again were in a critical stage with weather that could make or break yields.
Lack Of Proper Execution Destroying Economy. The Corn & Ethanol Report 08/06/2024
We kickoff the day with Trade Balance, Exports & Imports at 7:30 A.M., Redbook YoY at 7:55 A.M., RCM/Tipp Economic Optimism Index at 9:10 A.M., Total Household Debt at 10:00 A.M., 42-Day & 52-Week Bill Auction at 10:30 A.M., 3-Year Note Auction at 12:00 P.M., API Energy Stocks at 3:30 P.M., and LMI Logistics Managers Index.
Charlie Gasparino a Business Journalist and frequent panelist on Fox Business Network, and author of “Go Woke, Go Broke,” in a nutshell said how beautiful the US economy is which sends signals of being on the right track or totally backwards. If it’s working, don’t fix it. My coined phrase is, “Let the market seek its own level.” Gasparino went on to say since Day 1 of the current administration, the war on energy, fracking, Keystone Pipeline XL, and drilling offshore to name a few of disastrous moves fueled inflation. Also, in the administration infinite wisdom also raised taxes and raised regulation and the markets reminded us yesterday what bad moves these were. They should have kept the working policies that were in place before them, and the markets reminded us of that yesterday. Jeff Cox with CNBC reported power points that could have could have prevented the bleeding. Chicago Fed President Austan Goolsbee said Monday on CNBC that the Central Bank would react to weakness in the economy. :I’m not going to bind our hands of what should happen going forward because we’re still going to get more information. But if were not overheating, we should not be tightening or restrictive in real terms,” he said. Markets expect the Fed to head into an aggressive easing mode, starting in September with an 0.5 percentage -point rate cut. Personally, I would want the Fed to cut more aggressively before September and whispers on the street, are in agreement. After the close there was a judgement on Google that it was an illegal monopoly. Asian markets rebounded after a brutal rout yesterday, and the yen rally pauses, after the Nikkie suffers the worst one-day selloff since the 1987 crash. A lot of downside stock action since Thursday. Last week’s Illinois Production Cost Report showed Central Illinois farm diesel prices in a range of $2.96-$3.16/Gal with an average price of $3.03. This was down $.13 from early July but still $.19 over the mid-June low. NYMEX diesel futures and the bi-weekly Central Illinois diesel values. Seasonally, diesel futures tend to forge a low in August then rally into the b4th quarter, so it’s possible that a longer-term low was scored yesterday. Producers should consider Plains, N Midwest booking diesel fuel weakness to forward book harvest needs. On the Weather Front Tropical Storm Debby with historic heavy rainfall across southeast Georgia and eastern South Carolina through Friday will likely result in flooding. Heavy rainfall will likely result in flooding impacts from northern North Carolina through portions of mid-Atlantic States and southern New England through Sunday morning. The storm is moving at 40 knots. Another concern is Disturbance 1 located in the Western Caribbean Sea and Southwestern Gulf of Mexico. The 7-day formation chance is low at 30%. However, this storm will have to be monitored as the path of the storm could affect the energy sector. Weather Models Struggle Beyond 5 Days; Midwest Temps Cool; Rain Favors W Plains, N Midwest, East Coast: The major forecasting models are at odds over the Central US rainfall beyond this weekend. The GFS introducing a Gulf tropical storm Aug, but no other model has followed. Ag Resources (ARC) advises caution in committing to US weather outlooks beyond 5-6 days amid the coming outsized influence of the tropics. Nearby, flooding rainfall of 5-15” is forecast across the eastern seaboard, where crops in Georgia, the Carolina’s and Virginia have already suffered from exceptional drought. Abandonment is a concern there. Helpful rainfall of .50-1.50” impacts MN/WI in the next 24 hours. Similar totals are forecast in CO, W KS, and W NE Fri-Sun. A pattern of near-zero rainfall expected in the remainder of the temp profile develops in all but the S Plains after today. The GFS model’s projected 8-day change has ARC’s work suggests a Gulf hurricane is needed to boost E Plains & Midwest soil moisture prior to August. CBOT
Corn Ends Firm; Non-US Basis Rally Continues; US Crop Rating Down 1%: Corn market largely absorbed. pen interest fell 20,056 contracts in corn, 8,526 contracts in soybeans, and 3,163 contracts d financial panic selling on Monday. Cash market in Ukraine and South America continue to indicate supply dislocation, and US export data continues to reflect an abnormal shift to the US from others for summer delivery. Export Inspections in the week ending Aug 1 totaled 48 Mil Bu, vs. 15 Mil in the same week last year. ARC estimates July Census corn exports at 216 Mil Bu, vs. 95 Mil in 2023. Aug exports demand in unseasonally strong and WASDE is too low with their 2023/24 US corn export forecast of 2,225 Mil Bu. The US crop on Sunday was rated at 67 GD/EX, vs. 68% the prior week and vs, 62% on average in early August. Private yield estimates will come fast over the next 4 days. ARC maintains Dec corn at $4.00 has value and USDA must print a yield more than 183 BPA to renew corn’s bearish trend. Its all about the US corn supply nearby, but a seasonal low is forecast by the end of August and a demand led bull market is in the offing as 2024/25 US total corn demand rises above 15 Bil Bu. Once again were in a critical stage with weather that could make or break yields.
Have A Great Trading Day!
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn