9.13.24 Tredas Weekly Recap

Weekly Action:

Corn Dec24 up 7 at $4.13

Beans Nov24 up 2 at $10.06

KC Wheat Dec24 up 23 $6.00

Hogs Oct24 down 1.30 at $78.375

Fats Oct24 up 2.25 at $177.575

Feeders Oct24 up 8 at $239.225

Corn Dec25 up 4 at $4.48

Beans Nov25 up 8 at $10.58

KC Wheat July25 up 23 at $6.23

Market Recap:

The September WASDE was published Thursday. Overall, it did not have a dramatic impact on the market. Below are the main highlights.

Corn:

Yield was raised 0.5 bushels/acre to a record 183.6 bpa. If realized, this would beat last year’s yield record (177.3) by 6.3 bushels/acre. Planted area remained the same but production increased 39 million bushels. USDA lowered carry in stocks 55 million bushels so overall carryout dropped a modest 16 million bushels. Carryout is projected to be 2.057 billion bushels (13.7% stocks/use). USDA is projecting the total US corn crop to be 15.186 billion bushels. This would be just the fourth time the US crop has been greater than 15 billion bushels but is below last year’s 15.341 billion bushels of production.

USDA is projecting 5 of the top 6 corn producing states to have record yields in 2024.

Nebraska at 195 bpa (+1 above record)

Iowa at 212 bpa (+8 above record)

Illinois at 222 bpa (8 above record)

Indiana at 210 bpa (+7 above record)

South Dakota at 163 bpa (+1 above record)

For all the noise about Minnesota being wet this spring, they are still projected to have a 183 bpa yield. Time will tell.

Below is each state’s anticipated yield compared to last year and estimated yield compared to trend line.

Soybeans:

Soybean yield was kept steady at 53.2 bpa, as well as harvested acres. If realized, a yield of 53.2 bpa would beat the previous record from 2021 (51.7) by 1.5 bpa. Production was left unchanged but a drop in carry in stocks puts new crop carryout at 550 million bushels (11.1% stocks/use). Overall production is forecast to be 4.585 billion bushels, which would beat the record of 4.464 billion bushels from 2021 by 121 million bushels.

Of note: upcoming Brazilian production was left unchanged at a record large 169 MMT and the Argentine crop expected to be 51.0 MMT. This represents approximately 7.332 billion bushels of production from the two South American countries compared to 4.941 billion bushels of U.S. production.

China is expected to import approximately 3.716 billion bushels next year.

Below is each state’s anticipated yield compared to last year and estimated yield compared to trendline.

Wheat:

There were no changes to the U.S. wheat balance sheet as USDA historically waits for the September 30 Small Grains Summary.  USDA is currently projecting total wheat production to be the highest since 2016.

Something to pay attention to?? Major exporter wheat stocks/use is calculated to be 13.3%. The record low stocks/use from 2007 was 13.1%.

Weather:

A large swath of the central plains will remain dry for the next 7-10 days, which should accelerate the start of harvest for many. Any western precipitation is expected to be negligible.

There are no current threats of an early frost or freeze for the foreseeable future.

Brazilian weather gaining attention:

While September is normally dry in Norther Brazil, lately it has received virtually no rainfall. This is beginning to draw attention as soil moisture levels are at a 30 year low. Early October could be dramatically important as experts predict 2-4 inches of rain will be necessary for soybean germination.

Economy:

Economists are predicting a 25bps rate cut next week when the FED meets.

Signs of weak activity in the U.S. (largest oil consumer) and China (largest oil importer) have weighed on energy prices. U.S. ultra-low sulfur diesel and U.S. Brent Crude futures both fell to three-year lows this week.

The average 30-year mortgage rate is the lowest it has been in 19 months at 6.20%.

Legacy television networks continue to struggle. Last quarter, 1.6 million subscribers quit their TV distribution networks. This represents a 6.9% drop from the previous quarter.

Quote of the Week:

“We only die once, and for such a long time.” – Molière

Something that probably means nothing:

In August, it took a Wells Fargo office in Arizona four days to notice an employee had died in their cubicle.