Weekly Market Update 11-7-24

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

Trivia

1. Are you smarter than a fifth grader? What word describes a noun, pronoun, or other substantive?

2. What historical event triggered the U.S. to enter into World War II?

Answers at the bottom.

Market News

CROP PROGRESS: This week, the national corn harvest update shows that 91% of the crop has been harvested, surpassing the five-year average of 75%. Harvest completion is significantly ahead of the expected pace this year. In Kansas, 93% of the corn has been harvested, 3% above the average for this time of year. As for soybeans, last week’s report indicated that 89% had been harvested. Currently, completion for soybeans stands at 94%. In Kansas, the soybean harvest is also at 93%, compared to 86% at the same time last year, reflecting a quicker pace this year. The milo harvest is 85% complete, 2% faster than last year’s progress of 83%. Regarding winter wheat, planting and conditions have received some favorable forecasts recently. Winter wheat plantings are 87% complete, compared to 80% last year. Nationally, winter wheat conditions are rated at 41% good/excellent, 3% better than the previous year. Kansas’s good/excellent rating is 40%, which aligns with the five-year average.

INTEREST RATE MARKET: Earlier this week, Trump won decisively, causing market concerns over inflation and rising interest rates. Ironically, inflation likely helped his return to the White House, yet now rates are reacting as if the situation will worsen. Worries abound that higher tariffs will increase consumer prices, tax cuts may worsen the fiscal deficit, immigration reform could tighten the labor market, and the Fed’s independence might be jeopardized. Trump's first opportunity to act will likely be on tariffs, which he can impose without Congress. Previous tariffs on China took 11 months to implement and had no noticeable effect on inflation. This time, with 60% tariffs, the inflationary impact is estimated to be between 0.5% and 0.9%. Will President Trump differ from candidate Trump? We have more questions than answers, but the markets are moving ahead. Interest rates have risen significantly. The 2-year rate is up 11 basis points to about 4.30%.  The 10-year rate is up 20 basis points to roughly 4.45%, marking one of the most significant increases since 2020. Swap rates rise as the market reassesses Jerome Powell's potential rate cuts. While a rate cut is expected in today’s Fed meeting, it's uncommon to see it coincide with rising long-term rates. Compared to past cycles, particularly in 1995, the current movement of the 10-year yield is notably more significant. However, Trump's policies will take time, and the full impacts on inflation and the labor market are still unclear. Powell just faced a disappointing job report with a loss of 12,000 jobs, which will influence his decisions. Rate cuts are still the priority until speculation gives way to actual data.

EXPORT INSPECTIONS: Taking yet another tumble this week below the running 10-week average, 7.1 million bushels of wheat were inspected for export markets this week; 2.0 million bushels making their way to the Philippines, 1.2 million bushels traveling via rail to Mexico, and another 1.2 million bushels traveling to South Korea. For the third consecutive week, total inspected wheat values hold steady once again at 3% above the year-to-date inspections relative to the seasonal pace needed to reach USDA target values. Taking a slight decrease this week compared to the running 10-week average calculated by the USDA, corn inspections this week totaled 30.7 million bushels versus 32.4 million bushels last week. 79.3 million bushels of soybeans were inspected for exports this week, compared to 88.0 million bushels inspected in last week’s report. Yet another week of China taking the lead, with 51.4 million bushels of soybeans recorded as exports. Milo exports this week took a climb compared to the 0.1 million bushels inspected for the export market last week; this week coming in at 2.6 million bushels.

EXPORT SALES:Well, another seemingly record-setting for export corn sales. Old crop sales totaled 108.9 million bushels, once again surpassing the running 10-week average for corn sales at 51.0 million bushels. A total of 2.6 million bushels of N/C corn were reported as sold this week. Soybean sales this week fell at 78.9 million bushels sold for exports; once again, no N/C sales were reported this week. Wheat sales simmered down yet again this week with 13.8 million bushels sold; 4.7 million bushels of HRW, 3.7 million bushels of HRS, 1.4 million bushels of SRW, and 3.8 million bushels of white wheat. No N/C wheat sales were reported for exports this week. Old crop milo sales were reported at 0.3 million bushels this week, falling below the running 10-week average at 1.1 million bushels.




WEATHER: A rainy forecast in the future for western KS, southwestern KS, and portions of the OK panhandle. Here in Finney County, today looks like a 40% chance of scattered showers, predominantly after 1pm. Skies are cloudy with a high near 48°F; winds coming out of the east/northeast wind at 13 to 18 mph with gusts as high as 29 mph possible. New precipitation amounts between a half and three quarters of an inch are possible after 8pm this evening with a low temperature around 37°F. Showers are in the forecast Friday, with temperatures in the low-40s and new rainfall accumulation of 1 to 2 inches possible. Overnight Friday, the chance of precipitation lowers to about 80%, with total rainfall amounts between a tenth and quarter of an inch. Low temperatures are expected around the mid-30s throughout the overnight hours Friday. We may start to see the sun again this weekend as skies are partly to mostly sunny, with temperatures ranging from the low-50s to low-60s; evening hours looking to be around 31 and 32°F. Your Veteran’s Day forecast is sunny so far with a high temperature of 61°F. Temperatures are predicted to be around 35°F throughout the overnight hours. Tuesday and Wednesday of next week are once again looking to be sunny skies with temperatures ranging from the low-50s to mid-60s.

Trivia Answers

1. Antecedent

2. Pearl Harbor