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 Fed Chair Powell Speech, New Home Sales, and New Home Sales MoM at 9:00 A.M., Baker Hughes Oil & Total Rig Count, Building Permits Final, Building Permits MoM Final, and Jackson Hole Symposium at 12:00 P.M., Cattle on Feed and Cold Storage at 2:00 P.M.
Canadian National workers return to work today; Work stoppage at Canadian Pacific still ongoing; Labour Minister Mac Kinnon expects trains to be running in days; Business groups and companies demand government action; Teamsters said picket lines will remain in place for now; Workers at Canadian National will be beginning to get back to work today; the Teamster’s union said, hours after the Canadian government moved to put and end to the precedent
Rail stoppage. The union said the work stoppage at Canadian Pacific Kansas City would continue pending an order from the Canadian Industrial Relations Board (CIRB). The union and company officials are scheduled to meet with the board this morning.. Canada’s top two railroads, Canadian National Railway and Canadian Pacific Kansas City had locked out more than 9,000 unionized workers earlier on Thursday, triggering a simultaneous rail stoppage that business groups said could inflict hundreds of millions of dollars in economic damage. The Canadian government on Thursday announced that it would ask the country’s Industrial relations board to issue a back-to-work order that should come soon. We will keep you posted.
Ag Resources (ARC) wrote it has been out of step and wrong in the corn market. Prices have fallen far lower than forecast, and any spring or summer rally effort was limited. Bear markets can be unforgiving and 2024 has proven that point. ARC’s old crop corn balance research has been right in terms of end stocks declining near 1,850 Mil Bu, far less than the industry was forecasting. US 2023/24 corn demand 15.0 Bil Bu with China taking just 2MMT’s of US corn , end stocks estimate is 1,737 Mil Bu or stocks/use ratio of 11.5%. This models out to an average US farmgate price of $4.75. ARC see’s ’24 corn yield at a record. Our point is that there is upside potential in corn values. ARC points out rolling positions forward to December or securing$4.00 Dec corn calls and selling $3.70 puts at a 6-cent cost should perform into year end. This is not a place to relinquish ownership. The market will also take into account that rains have had a more bearish spin as updates from Pro-Farmer Crop Tour. We also will be watching the Commitment of Traders data.
Central US Weather Pattern discussion
Consensus Forecast Trends Wetter in N Plains/NW Corn Belt; Hurricanes Stay Absent; Heat Projected Sun-Tues:
The better performing EU and Canadian models disagree, but better rain is probable across the Canadian Prairies and Northern US in the 5-10 day period. The best chance for rainfall in the north occurs next Wed—Fri. A pattern A pattern of well below precipitation occurs elsewhere. Heat will blanket the Central US Sat-Wed, with max temps forecast in in the upper 90’s across the Southern Plains, and the upper 80’s/low 90’s across the primary Corn Belt. Fortunately, this temp pattern will be short-lived. A return to normal temps is projected Aug 29- Sep 6. The Delta corn & soybean harvest will continue uninterrupted by tropical storms into Sep 6th . Soybean harvesting in LA this weekend is forecast to reach 18-20% complete.
Canada Moves Quickly to End Rail Shutdown; CN workers to Return to Work. The Corn & Ethanol Report 08/23/2024
We kickoff the day with Fed Chair Powell Speech, New Home Sales, and New Home Sales MoM at 9:00 A.M., Baker Hughes Oil & Total Rig Count, Building Permits Final, Building Permits MoM Final, and Jackson Hole Symposium at 12:00 P.M., Cattle on Feed and Cold Storage at 2:00 P.M.
Canadian National workers return to work today; Work stoppage at Canadian Pacific still ongoing; Labour Minister Mac Kinnon expects trains to be running in days; Business groups and companies demand government action; Teamsters said picket lines will remain in place for now; Workers at Canadian National will be beginning to get back to work today; the Teamster’s union said, hours after the Canadian government moved to put and end to the precedent
Rail stoppage. The union said the work stoppage at Canadian Pacific Kansas City would continue pending an order from the Canadian Industrial Relations Board (CIRB). The union and company officials are scheduled to meet with the board this morning.. Canada’s top two railroads, Canadian National Railway and Canadian Pacific Kansas City had locked out more than 9,000 unionized workers earlier on Thursday, triggering a simultaneous rail stoppage that business groups said could inflict hundreds of millions of dollars in economic damage. The Canadian government on Thursday announced that it would ask the country’s Industrial relations board to issue a back-to-work order that should come soon. We will keep you posted.
Ag Resources (ARC) wrote it has been out of step and wrong in the corn market. Prices have fallen far lower than forecast, and any spring or summer rally effort was limited. Bear markets can be unforgiving and 2024 has proven that point. ARC’s old crop corn balance research has been right in terms of end stocks declining near 1,850 Mil Bu, far less than the industry was forecasting. US 2023/24 corn demand 15.0 Bil Bu with China taking just 2MMT’s of US corn , end stocks estimate is 1,737 Mil Bu or stocks/use ratio of 11.5%. This models out to an average US farmgate price of $4.75. ARC see’s ’24 corn yield at a record. Our point is that there is upside potential in corn values. ARC points out rolling positions forward to December or securing$4.00 Dec corn calls and selling $3.70 puts at a 6-cent cost should perform into year end. This is not a place to relinquish ownership. The market will also take into account that rains have had a more bearish spin as updates from Pro-Farmer Crop Tour. We also will be watching the Commitment of Traders data.
Central US Weather Pattern discussion
Consensus Forecast Trends Wetter in N Plains/NW Corn Belt; Hurricanes Stay Absent; Heat Projected Sun-Tues:
The better performing EU and Canadian models disagree, but better rain is probable across the Canadian Prairies and Northern US in the 5-10 day period. The best chance for rainfall in the north occurs next Wed—Fri. A pattern A pattern of well below precipitation occurs elsewhere. Heat will blanket the Central US Sat-Wed, with max temps forecast in in the upper 90’s across the Southern Plains, and the upper 80’s/low 90’s across the primary Corn Belt. Fortunately, this temp pattern will be short-lived. A return to normal temps is projected Aug 29- Sep 6. The Delta corn & soybean harvest will continue uninterrupted by tropical storms into Sep 6th . Soybean harvesting in LA this weekend is forecast to reach 18-20% complete.
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Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn