Tredas Recap 8.2.24

Weekly Action:

KC Wheat Sep24 up 17 at $5.63

Corn Sep24 down 8 at $3.87

Beans Sep24 down 20 at $10.20

Corn Dec24 down 6 at $4.04

Beans Nov24 down 18 at $10.29

Hogs Oct24 down 1.60 at $76.55

Fats Oct24 down 6.575 at $181.925

Feeders Sep24 down 11.575 at $247.625

Market Recap:

Same as last week, there is very little new news in the grain markets. Funds are at or near a record short. The crop looks good overall. Forecasts are mostly friendly for the heart of the corn belt.

Next week, the focus will be on the upcoming August WASDE, which will be released Monday, August 12. This is likely to be a report where USDA changes yield. In 23 of the last 25 years, USDA has changed soybean yield expectations from July to August. In each of the past 25 years they have changed corn yield.

Corn: Talk of a record US crop continues to loom over markets. With a shortage of new information, corn found itself making new contract lows during Thursday’s trading session. The Sep24 contract traded down to $3.78 while Dec24 touched $3.95 before recovering into the afternoon. However, we ended the week on a positive note with corn finishing 5cts higher on technical buying spurred by the new lows.

Soybeans:  Similar to corn, fear of a large crop paired with a lack of exciting news had soybeans trending lower to start the week. New lows were etched on Thursday for the Sep24 and Nov24 soybean contracts at $10.05 and $10.13, respectively. Soybeans were able to make up some of the price loss today, closing 11-12cts higher. There has been some late week buying from China that hopefully continues to tick up over the course of this month.

Cattle:  The cattle complex took a beating this week largely in part to macro-market pressure. Both feeder and fat markets had a bloody finish to the week despite bouncing off today’s morning lows. Carcass weights are big - basis is narrowing.

Weather:

For the most part, it will be hot and dry across most of the corn belt over the next week to ten days. Northern states are slated for rainfall. The drought monitor for the central/eastern corn belt is nearly blemish free compared to last year at this time.

Economy:

The Bureau of Labor Statistics released a report Friday morning showing the US economy added 114,00 nonfarm payroll jobs in July, which is dramatically fewer than the 175,000 expected by the trade. The unemployment rate is now 4.3%, which is the highest it’s been since October 2021. This sent the stock market tumbling to end the week. In other news, gold hit a record high.

Wednesday, the FED stated they will maintain rates at their current level. Focus on a rate cut now moves to September where analysts are more confident of a reduction with the labor market cooling.

Since 1995, the S&P 500 has gained 960% (8% per year) after adjusting for inflation. Over the same time, the purchasing power of the U.S. dollar has been cut in half due to inflation. The top wealthy 10% of Americans own 86.9% of stocks, which has a value of about $34 trillion.

Something That Probably Means Nothing:

In the past year, Japan lost nearly one million people as their fertility rate is a record low 1.2 children per woman, which is about half of replacement level. For perspective, if you started with 100 million people, in three generations it would be just 20 million people. Japan currently has 125 million people. Japan is the third most importer of U.S. corn.

Quote of the Week:

“Each of us has a fire in our hearts for something. It’s our goal to find it and keep it lit.” -Mary Lou Retton, Olympic gold medalist gymnast, 1984

Enjoy your weekend!