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 month with Redbook YoY at 7;55 A.M., S&P Global Manufacturing PMI Final at 8:45 A.M., ISM Manufacturing PMI, JOLT’s Job Openings, ISM Manufacturing Employment, Construction Spending MoM, ISM Manufacturing New Orders, ISM Manufacturing Prices, and JOLT’s Job Quits at 9:00 A.M., Dallas Fed Services Index and Dallas Fed Services Revenues Index at 9:30 A.M., Fed Bostic & Fed Cook Speech at 10:00 A.M., 42-Day & 52-Week Bill Auction at 10:30 A.M., Cotton System, Fats & Oils, and Grain Crushing’s at 2:00 P.M., API Energy Stocks at 3:30 P.M., Fed Barkin, Fed Bostic, & Fed Collins Speech’s at 5:15 P.M., and LMI Logistics Managers Index.
Philadelphia (AP) Dockworkers at ports from Maine to Texas began walking picket lines early this in a strike over wages and automation that could reignite inflation and causes shortages of goods (and higher prices) if it goes on more than a few weeks. The administration did nothing to avert the strike, estimated to cost the country’s economy $5 Billion per day and force layoffs and rising unemployment if doesn’t have a quick settlement, all we need in the aftermath of the Hurricane Helene disasters. The spin on corporate greed – should be – union greed as the politicians are in the union’s pocket. The Biden-Harris regime could have acted sooner as both sides were not at the negotiating table since June, and their regime did nothing to intervene with a week economy and recovery from an Act of God. The election is in 35 days. In the future they should strike after the holidays. It would make economic and safety sense. And with the union people already receiving a six-figure salary with people in North Carolina digging out of the mud. There is absolutely zero empathy for shutting down the supply chain. Affecting farmer exports, cars, medical materials, and a list of many products that would help are economy thrive.
Get Back To Work!
Wholesale egg prices peaked in early September at $4.44/dozen delivered to warehouses, while the store delivered price reached a high of $4.46 in late August. These were the highest prices since January 2023 and the 2nd highest on record. The wholesale market has since corrected with warehouse prices down 33% and store-delivered prices are below the high. The average retail egg price in August was 57% higher thana year ago at a 16-month high of $3.20/dozen. Anecdotally, retail prices continued to rise at the grocery store in September, and the next Consumer Prices report is expected to show another surge in September retail prices. If the port strike lingers wholesale and retail prices will unlikely turn lower in the coming months with disrupted logistics.
Analysis of NASS’s September Stocks Report
NASS’s corn stocks data was a bullish surprise. June-August feed/residual disappearance was implied at 849 Mil Bu, a 4-year high and which places feed/residual at 5.826 Mil Bu, up a sizable 340 Mil Bu year-over-year. Ag Resources (ARC) suspects this year’s surprising large residual disappearance remains a function of overestimating the 2023 corn yield. Final 23/24 US corn end stocks were pegged at 1,760 Mil Bu, 52 Mil below WASDE’s estimate in mid-September and down 500 Mil Bu from WASDE’s estimate in June 2023. The uncovering of export demand of modest expansion of industrial use is noteworthy. However, ARC notes that ’24 Midwest yields are validating a hike in production from USDA in October/November. ARC has lifted 2024 US corn yield to 184.5 BPA, which if realized more than offsets smaller carry-in supplies.
South American Weather Pattern Discussion
Models Maintain a Normal Rainfall Pattern in Brazil in 8-14 Day Period; Needed Rain Offered to Argentina:
The South American forecast beyond the first week of October continues to improve. The major forecasting models have been consistent in allowing a more normal flow of precipitation to slide into key areas of Norther Brazil beginning Oct 8-10, while also projected widespread rainfall of 1-2” across Cordoba, Buenos Aires, and Fanta Fe in Argentina. The EU model’s 8-14 day precipitation shows it will take time to rebuild subsoil moisture reserves in C & N Brazil following months of drought and as temps into Oct 7-8 stay in the upper 90’s/low 100’s. But assuming weekly rainfall of 1-3.00” in Brazil Oct 10th onward, producers there will begin planting soybeans in earnest. Soybean seeding in Mato Grosso is likely to reach only 1-2% complete by the end of the week, vs. 13% on average, but there’s hope a majority of the crop there can be planted by late October. Trend yield potential remains intact as of September 30th .
More Pain Paying For Produce & Other Essentials. The Corn & Ethanol Report 10/01/2024
WE kickoff the month with Redbook YoY at 7;55 A.M., S&P Global Manufacturing PMI Final at 8:45 A.M., ISM Manufacturing PMI, JOLT’s Job Openings, ISM Manufacturing Employment, Construction Spending MoM, ISM Manufacturing New Orders, ISM Manufacturing Prices, and JOLT’s Job Quits at 9:00 A.M., Dallas Fed Services Index and Dallas Fed Services Revenues Index at 9:30 A.M., Fed Bostic & Fed Cook Speech at 10:00 A.M., 42-Day & 52-Week Bill Auction at 10:30 A.M., Cotton System, Fats & Oils, and Grain Crushing’s at 2:00 P.M., API Energy Stocks at 3:30 P.M., Fed Barkin, Fed Bostic, & Fed Collins Speech’s at 5:15 P.M., and LMI Logistics Managers Index.
Philadelphia (AP) Dockworkers at ports from Maine to Texas began walking picket lines early this in a strike over wages and automation that could reignite inflation and causes shortages of goods (and higher prices) if it goes on more than a few weeks. The administration did nothing to avert the strike, estimated to cost the country’s economy $5 Billion per day and force layoffs and rising unemployment if doesn’t have a quick settlement, all we need in the aftermath of the Hurricane Helene disasters. The spin on corporate greed – should be – union greed as the politicians are in the union’s pocket. The Biden-Harris regime could have acted sooner as both sides were not at the negotiating table since June, and their regime did nothing to intervene with a week economy and recovery from an Act of God. The election is in 35 days. In the future they should strike after the holidays. It would make economic and safety sense. And with the union people already receiving a six-figure salary with people in North Carolina digging out of the mud. There is absolutely zero empathy for shutting down the supply chain. Affecting farmer exports, cars, medical materials, and a list of many products that would help are economy thrive.
Get Back To Work!
Wholesale egg prices peaked in early September at $4.44/dozen delivered to warehouses, while the store delivered price reached a high of $4.46 in late August. These were the highest prices since January 2023 and the 2nd highest on record. The wholesale market has since corrected with warehouse prices down 33% and store-delivered prices are below the high. The average retail egg price in August was 57% higher thana year ago at a 16-month high of $3.20/dozen. Anecdotally, retail prices continued to rise at the grocery store in September, and the next Consumer Prices report is expected to show another surge in September retail prices. If the port strike lingers wholesale and retail prices will unlikely turn lower in the coming months with disrupted logistics.
Analysis of NASS’s September Stocks Report
NASS’s corn stocks data was a bullish surprise. June-August feed/residual disappearance was implied at 849 Mil Bu, a 4-year high and which places feed/residual at 5.826 Mil Bu, up a sizable 340 Mil Bu year-over-year. Ag Resources (ARC) suspects this year’s surprising large residual disappearance remains a function of overestimating the 2023 corn yield. Final 23/24 US corn end stocks were pegged at 1,760 Mil Bu, 52 Mil below WASDE’s estimate in mid-September and down 500 Mil Bu from WASDE’s estimate in June 2023. The uncovering of export demand of modest expansion of industrial use is noteworthy. However, ARC notes that ’24 Midwest yields are validating a hike in production from USDA in October/November. ARC has lifted 2024 US corn yield to 184.5 BPA, which if realized more than offsets smaller carry-in supplies.
South American Weather Pattern Discussion
Models Maintain a Normal Rainfall Pattern in Brazil in 8-14 Day Period; Needed Rain Offered to Argentina:
The South American forecast beyond the first week of October continues to improve. The major forecasting models have been consistent in allowing a more normal flow of precipitation to slide into key areas of Norther Brazil beginning Oct 8-10, while also projected widespread rainfall of 1-2” across Cordoba, Buenos Aires, and Fanta Fe in Argentina. The EU model’s 8-14 day precipitation shows it will take time to rebuild subsoil moisture reserves in C & N Brazil following months of drought and as temps into Oct 7-8 stay in the upper 90’s/low 100’s. But assuming weekly rainfall of 1-3.00” in Brazil Oct 10th onward, producers there will begin planting soybeans in earnest. Soybean seeding in Mato Grosso is likely to reach only 1-2% complete by the end of the week, vs. 13% on average, but there’s hope a majority of the crop there can be planted by late October. Trend yield potential remains intact as of September 30th .
Have A Great Trading Day!
Thanks,
Questions? Ask Dan Flynn today at 312-264-4374Daniel Flynn