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 MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., US Trade Balance, Exports, and Imports at 7:30 A.M., Redbook YoY at 7:55 A.M., JOLT’s Job Openings, Factory Orders MoM, Factory Orders ex Transportation, and JOLT’s Job Quits at 9:00 A.M., 17-Week Bill Auction at 10:30 A.M., Fed Beige Book at 1:00 P.M., and API Energy Stocks at 3:30 P.M.
Purdue University’s monthly Ag Economy Barometer showed a deterioration in farmer sentiment in August. The Ag Economy Barometer dropped 13 points from July to 100, the lowest index level since April. Compared to a year ago, the index was down 15 points, and it was the lowest August index since 2016. The index for current conditions plunged 17 points to 83, matching April 2024, as the weakest since April 2024 and the 2nd lowest since May 2023. Depressed farm income was the largest negative factor, while large crop yield prospect were fully offset by weak crop prices. 30% of producers indicated that weak commodity prices were the greatest concern, while 33% said high input costs were their largest worry. 17% of survey respondents said interest rates were their top worry; 68% of producers expected interest rates to decline, while 19% anticipated higher interest rates.
Central US Weather Pattern Discussion:
Widespread Central US Dryness Probable into Mid-September; Temps to be Variable:
The Central US forecast is consistent with prior runs in keeping all but the Gulf, Southeast, and East Coast arid into mid-month. The EU and GFS are at odds over the coverage of heavy rainfall in the Southeast as the tropics re-activate, but there’s agreement that tropical storms/hurricanes are very likely to stay away from the principal US ag belt in the medium term. Rains are falling this morning in Texas, and Southern Gulf Coast. 3 tropical waves are lurking in the Atlantic. Tropical wave #1 has a 30% chance of developing in the next 7-days, #2-10%, and #3-30%. We will continue to watch these depressions as forecaster still believe this will be an active hurricane season. Export Inspections on corn was inline with expectations and soybeans were on the high end of expectations. Funds were net buyers of 16,000 contracts of corn reducing their net short position just below 242,000 contracts, the lowest since late June.
Corn use in the production of ethanol in July reached 473.5 mil/bu. Up 6% from June and the highest for the month in 6 years. Cumulative usage in the first 11 months of the 2023/24 year has reached 4.998 billion/bu. Requiring August usage to reach the USDA usage estimate of 5,450 billion.
Ready For A Bounce? The Corn & Ethanol Report 09/04/2024
We kickoff the day with MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., US Trade Balance, Exports, and Imports at 7:30 A.M., Redbook YoY at 7:55 A.M., JOLT’s Job Openings, Factory Orders MoM, Factory Orders ex Transportation, and JOLT’s Job Quits at 9:00 A.M., 17-Week Bill Auction at 10:30 A.M., Fed Beige Book at 1:00 P.M., and API Energy Stocks at 3:30 P.M.
Purdue University’s monthly Ag Economy Barometer showed a deterioration in farmer sentiment in August. The Ag Economy Barometer dropped 13 points from July to 100, the lowest index level since April. Compared to a year ago, the index was down 15 points, and it was the lowest August index since 2016. The index for current conditions plunged 17 points to 83, matching April 2024, as the weakest since April 2024 and the 2nd lowest since May 2023. Depressed farm income was the largest negative factor, while large crop yield prospect were fully offset by weak crop prices. 30% of producers indicated that weak commodity prices were the greatest concern, while 33% said high input costs were their largest worry. 17% of survey respondents said interest rates were their top worry; 68% of producers expected interest rates to decline, while 19% anticipated higher interest rates.
Central US Weather Pattern Discussion:
Widespread Central US Dryness Probable into Mid-September; Temps to be Variable:
The Central US forecast is consistent with prior runs in keeping all but the Gulf, Southeast, and East Coast arid into mid-month. The EU and GFS are at odds over the coverage of heavy rainfall in the Southeast as the tropics re-activate, but there’s agreement that tropical storms/hurricanes are very likely to stay away from the principal US ag belt in the medium term. Rains are falling this morning in Texas, and Southern Gulf Coast. 3 tropical waves are lurking in the Atlantic. Tropical wave #1 has a 30% chance of developing in the next 7-days, #2-10%, and #3-30%. We will continue to watch these depressions as forecaster still believe this will be an active hurricane season. Export Inspections on corn was inline with expectations and soybeans were on the high end of expectations. Funds were net buyers of 16,000 contracts of corn reducing their net short position just below 242,000 contracts, the lowest since late June.
Corn use in the production of ethanol in July reached 473.5 mil/bu. Up 6% from June and the highest for the month in 6 years. Cumulative usage in the first 11 months of the 2023/24 year has reached 4.998 billion/bu. Requiring August usage to reach the USDA usage estimate of 5,450 billion.
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Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn