Both locations closing at 7pm today 

Oct 1, 2024   

Good afternoon. Higher trade at the CBOT was seen on Tuesday, with corn and wheat futures being the upside leaders for the second consecutive session. December corn traded above its 100-day moving average for the first time since June 14th, while December Chicago wheat traded within 5 cents of its 100-day average for the first time since June also. The feed grains, and specifically wheat, have a bullish fundamental story as well from continued dry weather in Russian growing areas, which has caused a delay in winter wheat seeding and an increase in Russian FOB prices.

Dec CZ Corn closed at 4.29 Tuesday, up 4 1/4. CH was up 5 1/4 at 4.46 1/2. Both closed above their 100-day moving averages. Nov SX beans closed at 10.57 1/4, up 1/4 of a cent. Jan SF was up 1/4 also at 10.75 1/2. Dec WZ wheat closed at 5.99, up 15 cents. Products were mixed, December soybean meal closed at 347.50, up $5.90/ton, and December soybean oil closed at 42.91, down 40 points. Outside day higher for meal. Livestock markets were higher, December live cattle closed at 185.17, up 37 cents, November feeders closed at 244.67, down 22 cents, and December hogs closed at 74.60, up $1.32. Outside markets are also mixed, crude oil futures are up nearly $2/bbl, the Dow Jones index is down 100 points, and the US$ index is up 40 points. The S&P500 is down 40 points, and the NASDAQ is down 250 points. Crude oil futures are roughly $1.80 off the highs, while the S&P and the NASDAQ are both working on outside days lower; the Dow is having an inside day.

USDA this morning announced daily sales flashes of 195,000 mt's of corn for delivery to unknown destinations during the 2024/25 marketing year; and also announced sales of 120,000 mt's of soybeans for delivery to unknown destinations during the 2024/25 marketing year.

As mentioned in our mid-day commentary, headline news on Tuesday was on the geopolitical front, as sources are indicating Iran has launched an expected missile attack at Israel, with reports of as many as 200 projectiles having been fired. Details are limited, but sources seem to indicate Iran gave warning ahead of time to both the US and Russia; it is unclear how many of the missiles were intercepted and how many struck targets. The attack comes following a 'limited' ground invasion by Israel into Lebanon earlier last night, and seems to represent yet another step forward in escalations of the broader Middle East conflict that began nearly a year ago. As it pertains to the US, the Biden administration has warned there would be severe consequences should Iran decide to attack Israel. Crude oil futures rallied to gains of more than 4% at one point following the news, while gold futures rallied more than 1%.

Data specific to the ag space included the USDA's fats and oils report, as well as the grain crushings report, which showed soybean crush and ethanol corn grind data for the month of August. Soybean crush in the month was seen at 5.027 mil tons (168 mil bu's), which was down 13% from July, and down 0.9% from August of last year. The number, however, is well above the NOPA figure for August, which was estimated at 158 mil bu's. Soybean oil stocks were seen at 1.629 bil lbs, which was down 19% from July, and down 8% from August of last year. Similarly to crush, the oil stocks figure was also well above NOPA's estimate of 1.138 bil lbs. In the grain crushing report, corn used for ethanol in the month of August was estimated at 472.7 mil bu's, which was down 2.3% from July, but up 7% from August of last year. 

Otherwise, last big story in the markets is the longshoremen port worker strike that began today at ports from Maine to Texas. The USDA released a statement saying that the majority of bulk grain shipments would be unaffected, but officials still estimate the strike will cost the US economy some $5 mil per day. The US government also released a statement Tuesday, saying that it was monitoring the effects of the strike on the supply chain and assessing ways to address potential impacts, while also noting that it expected the initial effect on consumers to be 'limited'.

Along with weather in South America, weather in Russian wheat areas has also been garnering attention of late. Today, the local ag ministry in the Voronezh region, which borders Ukraine to the east, declared a state of emergency due to drought; this comes following a similar declaration in May due unseasonably late frosts. The significance in declaring a state of emergency is that it allows farmers to obtain insurance payments and government support. The region was Russia's fifth largest grain producing region last year, and accounts for roughly 4% of the national grain harvest annually. Furthermore, forecasts from the EU model's 10-day outlook see little/no rain here in the short-term, which will not help the situation.

Both the US and South American forecasts were again largely unchanged at mid-day on Tuesday. The majority of the Corn Belt sees little to no rainfall over the next 10-15 days, while temps will go through brief periods of cooling with passing cold fronts, but overall remain in an above average pattern. This forecast should allow for a rapid progression of harvest. And in Brazil and Argentina, dry conditions are expected to hold in most of the country's growing areas for another week or so, while the EU forecast continues to call for significantly improved rainfall potential into the middle of October.