6.28.24 Tredas Weekly Recap

Weekly Action:

KC Wheat Sep24 flat at $5.87

Corn Sep24 down 32 at $4.08

Beans Aug24 down 12 at $11.35

Hogs July24 down 2.30 at $89.60

Fats Aug24 up $2.00 at $185.30

Feeders Aug24 up $1.00 at $259

Corn Dec24 down 32 at $4.215

Beans Nov24 down 15 at $11.055

Corn seasonal average (99% through): $4.72

Soybean seasonal average (72% through): $11.85

Market Recap:

Corn:  Conditions fell for the 2nd consecutive week as heavy rains and flooding pummeled Eastern Nebraska and Western Iowa.  Ironically, both Nebraska and Iowa corn ratings improved, proving the saying “rain makes grain”.  USDA report today surprised the market by increasing corn acres by over a million acres allowing corn to forge new lows to end the week.

On a positive note, futures weakness has allowed basis to firm in nearly all areas of the grain belt. Ethanol margins have rallied near term, so the old crop cash market should be supported on the ethanol margins alone.

Soybeans: Conditions also fell for soybeans led by a double-digit loss in Indiana.  History has proven that June conditions don’t hold a lot of weight to final yield data.  Argentine oilseed workers went on strike Wednesday protesting labor reform.  This type of strike is more worrisome than trucker or port workers as it halts operation of processing plants.  One would expect government intervention over the weekend. 

Overall Grain Outlook & Basis:  Today’s USDA numbers are below and were clearly negative old and new crop.  Historically the corn seasonal is ending and Soybeans still have another 45-60 days. 

Basis has firmed near term as futures levels collapse.  Historically, farmers hesitate to empty bins mid-summer as they question what’s growing in the field.  Conditions started seasonally high, so there’s room to allow a couple weeks of slippage before impacting yield.  We are off to a great start locally, so that “I better empty bins to prep for new crop” may come sooner than one thinks.  Keep in mind as basis firms, it may be easier to mentally manage a long call against grain that’s already delivered vs grain sitting in the bin.

Weather:

Weekly rains have been abundant in the central US and near-term forecasts have shifted to a much friendly outlook showing potential rains to ease the eastern dryness as well as an ease in summer temps. 

Economy:

All eyes this week were on the presidential debate Thursday night.  It didn’t provide any fireworks or fist fights but did offer some interesting dialogue on their golf games. 

Good news on your Friday was that inflation only rose 2.6%, nearing the Fed’s goal of 2%.  This is the lowest since March 2021.  Personal income also rose .5% as spending was only up .2%.  Simple math still shows income well below inflation. 

The US economy continues its slow growth as rates remain high.  With the slowing inflation, we could see an anticipated rate drop. 

Something That Probably Means Nothing:

Quote of the Week:

“The farmer must be an optimist or they wouldn’t be a farmer” – Will Rogers

Enjoy your weekend and enjoy the 4th!!