Weekly Market Update 10-17-24

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

Trivia

1. How many months of the year have 31 days?

2. In what year did World War II end?

Answers at the bottom.

Market News

OPEC CUTS: Oil prices dropped by 2% on Monday after OPEC lowered its global oil demand growth forecasts for 2024 and 2025. This revision aligns with a fifth consecutive month of declining oil imports from China. Investor confidence was affected by China's stimulus measures, which did not have the desired impact, while markets remained cautious about potential Israeli attacks on Iranian oil infrastructure. U.S. West Texas Intermediate crude futures fell by $1.73, or 2.29%, and settled at $73.83 per barrel. OPEC's latest report showed a significant reduction in China's growth forecast, lowering it from 650,000 barrels per day to 580,000 bpd. Overall, these developments have raised concerns about future oil demand and pricing.

MARKET NEWS: Currently trending lower; however, support for CORN comes from large flash sales, mainly to Mexico. Another smaller flash sale this morning involved 197,000 metric tons headed to Mexico and 101,000 metric tons to an "unknown" destination for this marketing year. Concerns remain about Mexico being the primary driver of U.S. export business and monitoring the Mississippi River levels, barge values, and their impact on the markets. South American forecasts continue to be favorable, with more rain in the forecast. In the past three days, there has been a significant increase in open interest in SOYBEANS and a high volume of options trading. South American weather aligns with forecasts, indicating potential record production in South America, particularly Brazil. US spreads weakened yesterday, and Missouri and Kansas are expected to catch up and nearly finish bean harvest by the weekend. The WHEAT market managed to post gains on Wednesday. With recent tensions, Russia banned grain imports from Kazakhstan but will allow shipments through the country. Overnight trading opened stronger but ran into selling this morning as grains faced weakness. Not much, fundamentally. Outside markets are quiet, and wheat lacks follow-through support. MILO depends on demand, and when looking at the current export sales, you can see how slow the program is. Sales are very far behind to China, and with all the hype on tariffs and politics, it is hard to see the program make the current USDA estimates—plenty of supply, little demand.

CROP PROGRESS UPDATE: Corn crop conditions represented 64% good-excellent in this week’s crop progress and conditions report versus 64% again last week. This week, 47% of the United States corn was reported as harvested versus 30% last week; within Kansas, 77% of the state’s corn has been reported as harvested, compared to 67% harvested last week. Across the US, 67% of the world’s soybeans have been reported as harvested, compared to 40% harvested last week. As of this week, 50% of all US sorghum crop has been reported as harvested, on track with harvest numbers from 2023. Texas once again trails ahead with 95% of the state’s sorghum harvested, followed by 43% in Oklahoma and 39% in Kansas.

EXPORT INSPECTIONS: Making only a slight improvement from last week’s numbers, wheat inspected for exports this week totaled 13.6 million bushels; 6.7 bushels of HRW, 3.2 million bushels of HRS, 1.3 million bushels of SRW, and 2.4 million bushels of white wheat. Wheat, in is entirety, remains 2% above the year-to-date inspections relative to the seasonal pace needed to reach USDA target values. Corn inspections totaled 16.9 million bushels, falling well below the running 10-week average calculated by the USDA. While last week’s soybean inspections reached a peak, this week’s total export inspections fall closely behind at 57.9 million bushels, with China taking 39.4 million bushels. However, soybeans fall 1% below the year-to-date inspections relative to the seasonal pace needed to reach USDA’s targets. Milo exports made a comeback this week at 3.2 million bushels, compared to last week’s values at 0.1 million bushels.

EXPORT SALES: Export sales reports will be released tomorrow, Friday, October 18, 2024.   

NOPA CRUSH: NOPA released September soybean crush numbers earlier this week. Soybean crush came in above even the highest trade estimates at 177.3 million bushels, up from 158.0 million last month and blowing through last year’s 165.5 million bushels, which was the previous September crush record. This was 7 million bushels ahead of the average trade guess. USDA is looking for a 6% year-over-year total soybean crush increase for 2024/25, and the first month of the market year came in at a strong at a 7% increase year-over-year. Strong soybean crush will be needed to outweigh what could be possible record soybean production this year.

WEATHER: A Hazardous Weather Outlook has been issued by the National Weather Service in Dodge City. We are approaching near-critical fire weather conditions today and into this evening as southern winds today approach 20 to 30 mph with gusts as high as 40 to 50 mph possible. Blowing dust is expected with afternoon temperatures reaching 80°F and overnight temperatures dipping to around 54°F. Should fires occur, fire behavior will be aggressive and very difficult to control if an open flame becomes out of control. The National Weather Service’s Hazardous Weather Outlook remains in effect Friday through Wednesday; winds will continue over the weekend preceding a deep upper-level storm system which will help minimize the risk of fire weather conditions. The daytime forecast on Friday is looking partly sunny with high temperatures near 73°F; windy conditions from Thursday will continue throughout the day Friday. A 60% chance of showers and thunderstorms is possible on Friday during the overnight hours, with new rainfall amounts of less than a tenth of an inch possible, unless thunderstorms ensue. Precipitation chances continue into the day Saturday and into the overnight hours as well, with new rainfall amounts of less than a tenth of an inch possible. The high temperature Saturday is predicted to be in the upper-60s, with overnight temperatures falling to the low-50s. Another chance of rain and scattered thunderstorms is possible throughout the daytime and overnight hours on Sunday, with chances of precipitation around 70% and new rainfall amounts between a half and three-quarters of an inch. Following an eventful later half of the week, Monday, Tuesday, and Wednesday next week are looking sunny with high temperatures around the low- to mid-70s and overnight lows sitting right around the mid-40s.
 

Trivia Answers

1. Seven

2. 1945