6.14.24 Tredas Weekly Recap

Weekly Action:

KC Wheat July24 down 39 at $6.26

Corn July24 flat at $4.49

Beans July24 flat at $11.78

Hogs July24 up .375 at $93.900

Fats June24 up 4.925 at $186.975

Feeders Aug24 up 6.95 at $254.80

Corn Dec24 flat at $4.6875

Beans Nov24 down 8 at $11.49

Corn seasonal average (90% through): $4.72

Soybean seasonal average (48% through): $11.83

Market Recap:

The corn crop is currently rated 74% good/excellent and soybeans are rated 72% good/excellent.

The June WASDE was published this week. Very little changed from the May report. Domestic corn carryout was projected the same as last month. The USDA also left the Argentine and Brazilian production estimates the same.

Domestic soybean carryout was increased 10 million bushels on a decline in crush.

USDA raised the U.S. winter wheat crop a modest 17 million bushels which was in line with market expectations. The raised the HRW crop estimate 21 million bushels and the SRW crop was lowered 2 million bushels.

One wild card here:  The USDA did not change their harvested acres for winter wheat. The current figure of 25.2 million acres harvested is only 73.8% of the planted acres. This would be above the last two years (67.3% and 70.5%) but below the average of 76.5% during the 2017-2021 timeframe. From just an acreage increase to 76% alone, it would add 750k acres and 35-40 million bushels. That would be without USDA raising yields. So far, reports from the field have been promising.

CORN ENDING STOCKS/USE

SOYBEAN ENDING STOCKS/USE

WHEAT ENDING STOCKS/USE

Weather:

Our wet spring is officially over. The U.S. has not reached the “problem stage” of summer dryness, but traders are aware if summer showers don’t start showing up by late June, crop stress could increase quickly. July weather will ultimately determine production.

Economy:

The government also provided an update on the Consumer Price Index  (CPI) this week. Core CPI came in below expectations at +0.2% month over month. Core CPI was +3.4 year over year. With the exception of transportation, every major CPI component has a lower rate of inflation today than in June of 2022 when CPI peaked at 9.1%. There is still a long way to go to get inflation to the FED’s stated 2.0% goal. Of the 19 Fed members, four expect no rate cuts in 2024. Seven members expect one cut and eight expect two cuts this year.

Key engines of US Consumer spending are losing steam all at once – per Bloomberg. The saving rate now stands at a 16-month low.

The 124th US Men’s Open Golf Championship is currently underway in Pinehurst, North Carolina. Over 2,000 private airplane landings and departures are expected from the small airport there over the next week along with 35,000 fans per day to the golf course. Estimated economic benefits for the state of North Carolina directly from the event are $500 million including over $200-$250 million for the Pinehurst community. USGA and Pinehurst have entered an agreement for the tournament to return every 5-6 years starting in 2029 through 2050.

Something That Probably Means Nothing:

The GHG Accounting of War, a group of scientists, estimates the Russian/Ukraine war has produced at least 175 million metric tons of carbon dioxide emissions. They calculate the “social cost” of carbon is $185/ton. This puts Russia’s tab at $32 billion the organization claims Russia needs to pay in reparations.

 Quote of the Week:

“There is no sadder thing than a young pessimist, except an old optimist.” – Mark Twain