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, and House Price Index MoM & YoY 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., 42-Day Bill Auction at 10:30 A.M., 2-Year Note Auction and Money Supply at 12:00 P.M., and API Energy Stocks at 3:30 P.M.
The USDA’s September update for US food expenditures in July rose by 1% from June and were up 3% from a year ago to $211 Billion. This was the 3rd highest ever monthly figure, eclipsed by May 2024 and December 2023, and it was a record amount of money spent on food for the month of July. Food at home expenditures were 3% higher than in both June and a year ago. Food away from home expenditures were up 1% from June and were 3% higher than a year ago. Total dollars spent on food away from home in July were 28% larger than at-home expenditures, unchanged from a year ago, but up from 19% in 2022 and 2021 and 18% in 2018 and 2019.
World Corn Markets End Sharply Higher; South American Fob Premiums Firm Slightly; US Harvest Slower than Anticipated:
Dec CBOT corn rallies to test last week’s high amid a lack of bearish input. South American fob premiums firmed on Chicago’s rally, while the pace of physical export disappearance remains elevated. Export inspections in the week ending Sep 19th totaled 43 Mil Bu,, vs. 22 Mil the previous week and vs. 28 Mil in the same week a year ago. US corn is competitively priced, which amid positive seasonal trends in South American cash markets implies solid fundamental support at $3.90-$%3.95, basis Dec. The US harvest on Sunday was 14% complete vs. an unexpected 18% and up just one point year-over-year. Ag Resources (ARC) does project an acceleration nationwide beginning Oct 1st, and Oct US climate guidance is warm/arid. Former US President Trump indicated that he will push Chinese President Xi to secure the $50 Bil that the US/China agreed to in the 2019 Phase 1 Trade Agreement. Trump assured the farm audience that China will take $50 Bil of US ag goods in a deal that Xi must honor. The purchase of $50 Bil of US ag goods would completely alter the landscape of the prevailing bear market as US corn end stocks would decline on expanding US/China trade. China imported just 2 MMT’s of US corn in 2023/24.
Tropical Storm/Hurricane Projected to Impact Southeast/s Midwest Thurs-Sun; Harvest Moves Swiftly in Plains/W Midwest:
The major forecasting models are consistent in projecting tropical cyclone nine to reach hurricane status and make landfall in the eastern Gulf Thurs/Fri. The storm then travels across the southeast/southern Midwest, with heavy rainfall & regional flooding anticipated. The exact path of the storm will be fine-tuned over the next 48 hours, but rainfall of 2-7” is probable across AL, GA, the Carolina’s, TN, and KY. Lesser totals are forecast across the E Midwest in the coming weekend. Harvest pauses in the east, but elsewhere there are no disruptions forecast into Oct 7th . Nor are there any signs of frost/freeze with overnight lows across the crop areas of Dakota’s, MN, and WI projected in the upper 40’s/low 50’s over the next 10 days.
Inflation Administration. The Corn & Ethanol Report 09/24/2024
We kickoff the day with Redbook YoY at 7:55 A.M., S&P/Case-Shiller Home Price MoM & YoY, House Price Index, and House Price Index MoM & YoY 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., 42-Day Bill Auction at 10:30 A.M., 2-Year Note Auction and Money Supply at 12:00 P.M., and API Energy Stocks at 3:30 P.M.
The USDA’s September update for US food expenditures in July rose by 1% from June and were up 3% from a year ago to $211 Billion. This was the 3rd highest ever monthly figure, eclipsed by May 2024 and December 2023, and it was a record amount of money spent on food for the month of July. Food at home expenditures were 3% higher than in both June and a year ago. Food away from home expenditures were up 1% from June and were 3% higher than a year ago. Total dollars spent on food away from home in July were 28% larger than at-home expenditures, unchanged from a year ago, but up from 19% in 2022 and 2021 and 18% in 2018 and 2019.
World Corn Markets End Sharply Higher; South American Fob Premiums Firm Slightly; US Harvest Slower than Anticipated:
Dec CBOT corn rallies to test last week’s high amid a lack of bearish input. South American fob premiums firmed on Chicago’s rally, while the pace of physical export disappearance remains elevated. Export inspections in the week ending Sep 19th totaled 43 Mil Bu,, vs. 22 Mil the previous week and vs. 28 Mil in the same week a year ago. US corn is competitively priced, which amid positive seasonal trends in South American cash markets implies solid fundamental support at $3.90-$%3.95, basis Dec. The US harvest on Sunday was 14% complete vs. an unexpected 18% and up just one point year-over-year. Ag Resources (ARC) does project an acceleration nationwide beginning Oct 1st, and Oct US climate guidance is warm/arid. Former US President Trump indicated that he will push Chinese President Xi to secure the $50 Bil that the US/China agreed to in the 2019 Phase 1 Trade Agreement. Trump assured the farm audience that China will take $50 Bil of US ag goods in a deal that Xi must honor. The purchase of $50 Bil of US ag goods would completely alter the landscape of the prevailing bear market as US corn end stocks would decline on expanding US/China trade. China imported just 2 MMT’s of US corn in 2023/24.
Tropical Storm/Hurricane Projected to Impact Southeast/s Midwest Thurs-Sun; Harvest Moves Swiftly in Plains/W Midwest:
The major forecasting models are consistent in projecting tropical cyclone nine to reach hurricane status and make landfall in the eastern Gulf Thurs/Fri. The storm then travels across the southeast/southern Midwest, with heavy rainfall & regional flooding anticipated. The exact path of the storm will be fine-tuned over the next 48 hours, but rainfall of 2-7” is probable across AL, GA, the Carolina’s, TN, and KY. Lesser totals are forecast across the E Midwest in the coming weekend. Harvest pauses in the east, but elsewhere there are no disruptions forecast into Oct 7th . Nor are there any signs of frost/freeze with overnight lows across the crop areas of Dakota’s, MN, and WI projected in the upper 40’s/low 50’s over the next 10 days.
Have A Great Trading Day!
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn