Weekly Market Update 8-8-24

Here is your weekly market update from the Garden City Co-op Grain Origination Team.

Trivia

1. Who played the character Marty McFly in the film “Back to the Future” released in?

2. How old was Lee Harvey Oswald when he allegedly shot JFK?

Answers at the bottom.

Market News

INTEREST RATE MARKET: The market has experienced significant volatility over the past week. For example, 2-year rates have shifted at the same level as the SVB collapse in March 2023 and like the movements during March 2020 (COVID). It's highly probable that there will be a rate cut in September, but the market is anticipating even more, with expectations of 50 basis points in September, another 50 basis points in November, followed by 25 basis points in both December and January, totaling over 5 cuts in the next three meetings. Aggressive rate cuts of 50 basis points or more are typically reserved for emergency situations, as are interest rate cuts, which some are speculating about. While it's possible that we may reach that point, we have not reached it yet. We can anticipate that the Fed will start to resist the market's expectations. Goolsbee from the Chicago Fed, who is known for his dovish views, was the first to contest the market sentiment by stating that the job numbers do not indicate a recession. Additionally, the ISM Services report, which revealed a healthy expansion in activity, higher prices paid, increased employment, and higher new orders, served as a reminder to the markets, and now we are well off the lows.

CROP CONDITIONS: The US corn crop continues to impress, with USDA rating it 67% good-to-excellent on Monday, down 1% from the previous week but still 5% ahead of the 5-year average.  This doesn’t bode well for a corn market that is already floundering price wise and can’t seem to get any export excitement rolling. This is paired with good forecasts across corn country – the Northern Plains caught rains yesterday, the High Plains are forecasted to catch rain this weekend, and most of the Corn Belt received rains earlier in the week. Likewise, the US soybean crop is rated 68% good-to-excellent, up 1% from last week and well ahead of the 60% 5-year average. The spring wheat crop is rated 74% good-to-excellent, over 20% ahead of the 5-year average.

EXPORT INSPECTIONS:Continuing the pattern of another strong week of export inspections, 16.2 million bushels of wheat were reported this week; with 2.8 million bushels being HRW. Of the total HRW exported this week, 1.4 million bushels made their way to Mexico, majority by rail, followed by destinations of El Salvador and the Dominican Republic. Remaining above last week’s total, HRS wheat made 6.9 million bushels of USDA export inspections this week; with SRW wheat seeing 3.1 million bushels inspected. Falling below last week’s numbers, but remaining on track with USDA estimates, 2.3 million bushels of white wheat were recorded as inspected for exports; with 2.0 million of those bushels traveling via the Pacific Northwest PNW to Yemen. Making a comeback finally, 1.1 million bushels of durum wheat were reported as inspected this week with final destinations in Italy, Nigeria, and Japan. Corn export inspections continue to remain slightly above the running 10-week average this week, with a reported total of 47.8 million bushels. Rounding out a slower week for soybeans exports, only 9.6 million bushels made inspection this week; remaining on track with total USDA trade estimates. Shockingly, a total of 6.8 million bushels of milo were inspected this week for exports; well above the 10-week average. 

EXPORT SALES: A total of 19.1 million bushels of O/C corn were sold this week for exports and 9.8 million bushels of N/C corn were recorded. Total O/C wheat sales were recorded at 10.1 million bushels, with 4.1 million bushels of N/C wheat sold. It appears sales remain below the running 10-week average, however, still fall within USDA trade estimates as a whole. Soybeans saw yet another jump in sales volume this week, with O/C sales recorded at 12.0 million bushels and N/C sales totaling 36.2 million bushels; remaining above the trade estimates and well above the running 10-week average too. Unfortunately, total soybean sales once again remain 2% below year-to-date sales relative to the pace needed to meet USDA targets. Remaining 3% above year-to date sales needed to meet USDA targets, 2.1 million bushels of O/C milo were sold this week and N/C sales totaled 37 million bushels.

AUGUST WASDE: USDA will release the August WASDE Report on Monday, August 12^th. Estimates are shown in the table below. Overall the trade is looking for slight decreases to corn carryout and slight increases to soybean carryout. Report days normally come with a healthy dose of volatility, so please reach out to a member of our Grain Team if there are orders we can get working for you.



WEATHER: Your Thursday is shaping up to be mostly cloudy with a high near 73°F. Throughout the evening hours, a 40% chance of showers and thunderstorms is possible after 10 pm, winds coming out of the northeast at 9 to 16 mph and low temperatures expected around 57°F. During the day on Friday, a 30% chance of precipitation is expected, with mostly cloudy skies and a high near 72°F. Showers and scattered thunderstorms are again possible throughout the evening hours, with new rainfall amounts expected between a half and three quarters of an inch. The National Weather Service in Dodge City has issued a hazardous weather outlook Friday through Tuesday. A complex of thunderstorms is possible Friday evening into the early morning hours Saturday and then again Saturday night into Sunday night. Locally heavy rainfall can be anticipated with these storm cells. The weekend forecast predicts high temperatures in the low 70s on Saturday, and high’s near 81°F on Sunday. Early next week, skies are expected to be mostly sunny, with temperatures in the high 80s and low 90s. A 40% chance of rain is anticipated Monday evening, followed by a 20% chance of precipitation on Tuesday evening. Wednesday’s forecast is sunny with a high temperature near 93°F.

Trivia Answers

1. Michael J. Fox
2. 24