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 Redbook YoY at 7:55 A.M., S&P/Case-Shiller Home Price MoM & YoY. House Price Index MoM & YoY, and House Price Index at 8:00 A.M., CB Consumer Confidence, Richmond Fed Manufacturing Index, Richmond Fed Manufacturing Shipments Index, and Richmond Fed Services Revenues Index at 9:00 A.M., Dallas Fed Services Index, Dallas Fed Services Revenues Index, and NY Fed Treasury Purchases 22.5 to 30 yrs. at 9:30 A.M. 2-Year Note Auction and Money Supply at 12:00 P.M., and API Energy Stocks at 3:30 P.M.
US egg prices have made it back to business TV channels and print media headlines in recent days, and for good reason. Last week, the USDA reported that an average wholesale price for a dozen eggs delivered to New York stores was at $4.41. For the week, the stores delivered price was up $.27 and has gained $2.03 in the last 6 weeks. It was the highest price since January 2023, and there have been just 5 weeks that 2023, and there have been just 5 weeks that the price was higher. Those were 5 consecutive weeks that occurred from early December 2022 to early January 2023. Ag Resources (ARC) has a graphic that plots weekly wholesale and monthly retail prices, with last week’s wholesale and monthly retail prices, with last week wholesale price $1.33/dozen, 43% above the national average July retail price. Note the egg prices have been trending higher from the 2023 low but avian flu losses have sent egg prices sharply higher in recent weeks. The August WASDE estimated 2024 production would be unchanged from 2023, and 2025 production would increase 4%. And we have heards crickets from Joe & Kamala in this matter and the economy, which isn’t close to being the strongest Joe. We also heard crickets on the 3rd anniversary of the schizophrenic withdrawal from Afghanistan causing the death of 13 brave marines killed by a terrorist that slipped through the cracks. Whose accountable?
Central US Weather Pattern Discussion
Heat Dominates US, Europe, Black Sea Region This Week; Needed Rain Forecast in TX/OH in 6-10 Day Period:
US forecast is consistent with prior runs and the major forecasting models are in good agreement. Dangerous heat will be spread across the E Plains, Midwest, and Delta Mon-Wed. Temps peak Tuesday afternoon, with max highs pegged in the mid/upper 90’s across MD, IL, IN, OH, KY, and TN. NOAA’s heat advisory forecast today across these states. The temp pattern moderates by late week, but abnormally high temps will linger across the mid-South & Southeast Wed-Thurs. Heavy T-storms impact the Dakotas/MN in the next 24 hours. Heavy and welcomed rainfall upward of 1-3” is forecast in TX/OK Sep 2-3. Otherwise an arid trend persists across the heart of the Corn Belt into Sep 5th . The change in the Midwest crop ratings next week is important.
US Corn Export Demand
The US corn market continues to probe for a bottom as many in the spec community expect the US to hike not lower US yield in it’s September report. NASS enumerators will be heading to the field late this week and early next to measure US corn yields. It’s true that a US yield of 185 or higher absorbs completely ARC’s projected growth in demand, but it remains clear that demand has been uncovered below $4.00, basis spot futures. Total question today is centered on whether US production offsets this an allows US corn stocks to increase in the 2024/25 crop year? New crop sales have jumped as importers think more about forward coverage – and amid rather competitive US offers. Old crop disappearance also remains historically elevated for late summer. Physical US corn exports tend to collapse once South American supplies enter the global pipeline in July. This year there has been no material decline in weekly US corn shipments, which shows the disruption to supply availability from the Ukraine, Brazil, and Argentina.
CBOT Corn Scores A New Contract Low via September Liquidation; US Gulf Basis Rallies Sharply; US Corn Crop GD/EX Ratings Down 2% and IL down 3%:
World corn markets ended lower. The remainder of September longs are being liquidated prior to Friday’s first notice day. Other breaking news was absent. The US corn crop is rated at 65% GD/EX, vs. 67% the previous week and vs. 61% on average. ARC expects GD/EX ratings to drop another 2-3% next Monday following this week’s heat as rainfall stays absent from the C Plains and the fat crop areas of the Midwest. Corn foliar diseases are flourishing which will cause a premature death of a corn plant that impacts seed test weight. Tar spot, grey leaf spot, and corn blight sightings/reports are becoming numerous. (And spread plant to plant very quickly) Gulf corn basis on Monday is up $.09/Bu and has rallied $.19/Bu in the last week. This puts US origin inline with competing origins but also foreshadows and ongoing active US corn export program this autumn.
ARC maintains that December corn is undervalued unless it’s proven that the US corn yield is at or above 184 BPA. Last half of August heat/dryness and September dryness is tugging the US corn yield lower. 2024 will produce a record corn yield, but the final will be 180 BPA or below via summer corn foliar disease.
Shock & Awe: Economy; Weather; Crop Disease- Not the Military. The Corn & Ethanol Report 08/27/2024
We kickoff the day with Redbook YoY at 7:55 A.M., S&P/Case-Shiller Home Price MoM & YoY. House Price Index MoM & YoY, and House Price Index at 8:00 A.M., CB Consumer Confidence, Richmond Fed Manufacturing Index, Richmond Fed Manufacturing Shipments Index, and Richmond Fed Services Revenues Index at 9:00 A.M., Dallas Fed Services Index, Dallas Fed Services Revenues Index, and NY Fed Treasury Purchases 22.5 to 30 yrs. at 9:30 A.M. 2-Year Note Auction and Money Supply at 12:00 P.M., and API Energy Stocks at 3:30 P.M.
US egg prices have made it back to business TV channels and print media headlines in recent days, and for good reason. Last week, the USDA reported that an average wholesale price for a dozen eggs delivered to New York stores was at $4.41. For the week, the stores delivered price was up $.27 and has gained $2.03 in the last 6 weeks. It was the highest price since January 2023, and there have been just 5 weeks that 2023, and there have been just 5 weeks that the price was higher. Those were 5 consecutive weeks that occurred from early December 2022 to early January 2023. Ag Resources (ARC) has a graphic that plots weekly wholesale and monthly retail prices, with last week’s wholesale and monthly retail prices, with last week wholesale price $1.33/dozen, 43% above the national average July retail price. Note the egg prices have been trending higher from the 2023 low but avian flu losses have sent egg prices sharply higher in recent weeks. The August WASDE estimated 2024 production would be unchanged from 2023, and 2025 production would increase 4%. And we have heards crickets from Joe & Kamala in this matter and the economy, which isn’t close to being the strongest Joe. We also heard crickets on the 3rd anniversary of the schizophrenic withdrawal from Afghanistan causing the death of 13 brave marines killed by a terrorist that slipped through the cracks. Whose accountable?
Central US Weather Pattern Discussion
Heat Dominates US, Europe, Black Sea Region This Week; Needed Rain Forecast in TX/OH in 6-10 Day Period:
US forecast is consistent with prior runs and the major forecasting models are in good agreement. Dangerous heat will be spread across the E Plains, Midwest, and Delta Mon-Wed. Temps peak Tuesday afternoon, with max highs pegged in the mid/upper 90’s across MD, IL, IN, OH, KY, and TN. NOAA’s heat advisory forecast today across these states. The temp pattern moderates by late week, but abnormally high temps will linger across the mid-South & Southeast Wed-Thurs. Heavy T-storms impact the Dakotas/MN in the next 24 hours. Heavy and welcomed rainfall upward of 1-3” is forecast in TX/OK Sep 2-3. Otherwise an arid trend persists across the heart of the Corn Belt into Sep 5th . The change in the Midwest crop ratings next week is important.
US Corn Export Demand
The US corn market continues to probe for a bottom as many in the spec community expect the US to hike not lower US yield in it’s September report. NASS enumerators will be heading to the field late this week and early next to measure US corn yields. It’s true that a US yield of 185 or higher absorbs completely ARC’s projected growth in demand, but it remains clear that demand has been uncovered below $4.00, basis spot futures. Total question today is centered on whether US production offsets this an allows US corn stocks to increase in the 2024/25 crop year? New crop sales have jumped as importers think more about forward coverage – and amid rather competitive US offers. Old crop disappearance also remains historically elevated for late summer. Physical US corn exports tend to collapse once South American supplies enter the global pipeline in July. This year there has been no material decline in weekly US corn shipments, which shows the disruption to supply availability from the Ukraine, Brazil, and Argentina.
CBOT Corn Scores A New Contract Low via September Liquidation; US Gulf Basis Rallies Sharply; US Corn Crop GD/EX Ratings Down 2% and IL down 3%:
World corn markets ended lower. The remainder of September longs are being liquidated prior to Friday’s first notice day. Other breaking news was absent. The US corn crop is rated at 65% GD/EX, vs. 67% the previous week and vs. 61% on average. ARC expects GD/EX ratings to drop another 2-3% next Monday following this week’s heat as rainfall stays absent from the C Plains and the fat crop areas of the Midwest. Corn foliar diseases are flourishing which will cause a premature death of a corn plant that impacts seed test weight. Tar spot, grey leaf spot, and corn blight sightings/reports are becoming numerous. (And spread plant to plant very quickly) Gulf corn basis on Monday is up $.09/Bu and has rallied $.19/Bu in the last week. This puts US origin inline with competing origins but also foreshadows and ongoing active US corn export program this autumn.
ARC maintains that December corn is undervalued unless it’s proven that the US corn yield is at or above 184 BPA. Last half of August heat/dryness and September dryness is tugging the US corn yield lower. 2024 will produce a record corn yield, but the final will be 180 BPA or below via summer corn foliar disease.
Have A Great Trading Day!
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn