Weekly Market Update 8-1-24

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

Trivia

1. Simone Biles is widely considered the greatest athlete of all in time in which sport?

2. What year was the moon landing?

Answers at the bottom.

Market News

Interest Market: The Fed voted to hold interest rates steady at their meeting this week, but did indicate that a rate cut could be on the table at their September meeting. Federal Reserve Chair Jerome Powell signaled that the long-awaited first rate cut is likely on the way during the post-meeting press conference yesterday afternoon. The last rate hike was in July 2023, and we’ve been at 23-year high interest rates ever since. Current talks are that the benchmark lending rate would start with a reduction of 25 basis points. 

ADM AND AGCO CORP: Stocks have dropped following disappointing earnings, raising concerns about a slowdown in the farming sector. ADM saw its shares drop by 6.7%, and AGCO experienced a significant decline, with its shares falling by 8.4%—the decrease in grain prices due to increased supply impacts farmers, traders, and crop input manufacturers. AGCO's CEO anticipated 2024 to be a "big correction year," ADM's CEO highlighted the more challenging conditions resulting from the rebound in grain supplies. AGCO reported a 15% drop in tractor sales in the second quarter, exceeding analysts' expectations, and anticipates sales for 2024 to be approximately $1 billion lower than previous estimates. AGCO is working to reduce inventory through decreased production and discounts. ADM reported its lowest second-quarter earnings since 2020, down 46% from the prior year. The drop in soybean, wheat, and corn prices has reduced buyers' urgency to secure supplies, impacting ADM. Limited trading opportunities in North America have also affected the company. Margins for ADM's soybean processing business have decreased due to competition from used cooking oil imports. ADM faced challenges in its nutrition unit, with profits decreasing due to unplanned downtime. On the other hand, profits increased in ADM's corn milling unit, driven by higher margins for starches and sweetener production and increased ethanol exports. ADM is optimistic about improved margin opportunities and maintained its full-year earnings forecast between $5.25 to $6.25 a share.

EXPORT INSPECTIONS: Making a comeback this week, 15.8 million bushels of wheat were reported as exports this week. A total of 2.1 million bushels of HRW were exported this week; with the largest portion traveling to Chile, followed by the Philippines, and 0.2 million bushels making their way to Mexico by rail. This week a total of 4.3 million bushels of HRS wheat were exported; over half of that making the trek to the Philippines. 3.5 million bushels of SRW made USDA export inspections this week; the great majority traveling to Mexico and a miniscule amount making its way to Honduras. White wheat exports stepped it up this week; a total of 5.8 million bushels made inspection, and once again, no durum wheat exports were reported this week by the USDA. Falling slightly below the 10-week average but improving in comparison to last week, a total of 41.7 million bushels of corn made the USDA export inspections; with 15.8 million bushels traveling to Mexico and 11.9 million bushels making their way to Japan. Soybeans make up 14.8 million bushels of USDA export inspections this week, and milo export inspections total 2.1 million bushels.

EXPORT SALES: Old crop corn sales totaled 6.6 million bushels this week, while N/C sales were recorded at 28.0 million bushels. Wheat sales total 10.5 million bushels this week, still on par with USDA estimates, but remaining on the lower side of total wheat trade estimates. Soybeans saw a large jump in total sales volume this week, with O/C sales recorded at 13.8 million bushels and N/C sales totaled 23.2 million bushels; sitting above the running 10-week average as well as USDA trade estimates for the week. Overall, total soybean sales still remain 2% below yearly USDA targets. A total of 6.4 million bushels of O/C milo made sales this week, with once again, no N/C sales reported; this means milo sales are now 4% above total yearly USDA targets.  




WEATHER: Following a week of scorching hot temperatures, the forecast is sunny with a high of 96°F today. This evening, a 20% chance of storms and scattered thunderstorms is possible after 1 am, with a low temperature around 68°F. The National Weather Service in Dodge City has issued a hazardous weather outlook for portions of central, south central, southwest, and west central KS through the day and into this evening. Excessive heat warnings are in effect for Stafford, Pratt, and Barber County, while a heat advisory is in effect for Seward, Meade, Clark, Comanche, and Kiowa County. Friday looks to be sunny with a high near 95°F, winds blowing at 6 to 10 mph coming out of the south/southeast during the afternoon hours. A 20% chance of precipitation is predicted during the evening hours Friday/early morning hours Saturday. This weekend is mostly sunny with temperatures in the low- to mid-90s, with evening temperatures expected around the mid- to high-60s. Unfortunately, the hot temperatures are expected to roll back around Monday and Tuesday of next week, with the highs sitting in the low-100s and evening temperatures around 70°F. Wednesday’s forecast is sunny, with a high temperature near 99°F.

Trivia Answers

1. Gymnastics
2. 1969