BASIC & RECENT MARKET INFO

Yesterday’s news was good for a market wanting lower interest rates to boost economic activity. The stock market was strong as it should have, but crude oil was weak despite the improved economic outlook as Russia is “set” to reduce its crude oil export duty by 5.7%, Bloomberg reported on Wednesday afternoon. The new duty, starting in December, is “set” to the equivalent of $3.37 per barrel or $24.7 per mt. Grains probably suffered a profit-taking spree triggered by predictio

Highlights The Producer Price Index (PPI) is the measure of inflation at the wholesale level and the Consumer Price Index (CPI) is the rate of inflation at the retail level. This morning, China reported both indexes. The PPI annual rate was expected to be -2.7% (deflation). The actual PPI was a -2.6% (less deflation than expected, which is good) The annual CPI rate was expected to be -0.1%. The actual CPI was -0.2% (not terrible, but worse than expected). From MetSul Meteo

Highlights Fears over a wider Middle East conflict continue to mount as Iran-backed Houthi rebels in Yemen claimed responsibility for missile and drone attacks targeting a Red Sea shipping port in southern Israel yesterday. Israel claimed it killed the top two leaders of HAMAS. As expected, the Federal Reserve left interest rates unchanged yesterday and Chairman Jerome Powell talked with a softer tone than in the past about how high interest rates may go and for how long. AD

Highlights By a vote of 220 to 209, the House of Representatives elected a Speaker in the person of Louisiana Republican Mike Johnson, whose pedigree looks like Jim Jordan without as many political battle scars. He is against financial aid to Ukraine, abortion, gay marriage, wants to close the borders, forebid gender-related surgery and hormone treatment, prohibits mask mandates on airplanes, and tighten immigration standards. He probably was able to get enough votes because

Highlights A sea of red (lower prices) across world stock markets and another surge in U.S. Treasury yields on Wednesday ensured a bearish open in Asia today. So far this marketing year, US ethanol production is above last year and the five year average while ethanol inventory is below last year and the five year average. Yesterday morning, the USDA announced the sale of 132,000 mts of old crop soybeans to China. Jim Jordan received two less votes for Speaker yesterday tha

Highlights Now that the October USDA report has been issued, we can be quite confident that the futures have made their lows for the year. Soybeans did it on May 31st and corn did it on September 19th. The USDA has lowered yields for both beans and corn four consecutive months. We will get a November production update (yield, harvested acres) from USDA, but there will be no USA production information on the December S&D, just demand changes for USA crops; the USDA will updat

Highlights Ukraine’s leadership is highly stressed by Speaker McCarthy’s removal from office. They claim McCarthy, Jeffries and Biden made a secret deal last week to send more money to Ukraine. Supposedly, McCarthy confirmed yesterday the secret deal for Ukraine was true. Now, this money will be delayed, or could be rejected completely with a new speaker. About two weeks ago, Ukraine set-up a temporary “humanitarian corridor” for cargo vessels, and several ships have departe

A micro natural gas futures and options contract will begin trading on November 6th. The micro contract size will be 1,000 mbtu (million British Thermal Units). The current natural gas contract is 10,000 mbtu, and the mini-contract is 2,500 mbtu. Highlights The Panama Canal Authority said a surcharge for water use it had applied to conserve water during a prolonged drought will be reduced starting in October. The waterway has imposed a series of restrictions this year, inclu

Highlights Federal Reserve Chairman Jerome Powell suggested interest rates will be “higher for longer” and could stay above 5% this year and next. Yesterday, the Fed left interest rates unchanged, as expected, but Powell did not rule out another interest-rate hike this year. Ukraine said they are ready to resume grain from exports from Black Sea Ports using a temporary corridor, with the first dry bulk carriers in place. The bulk carriers Resilient Africa and Aroyat arrived

More on DP Contracts Yesterday, we wrote about a “dump” charge on DP grain. Several folks asked what was a “dump” charge? We have not commonly seen dump charges since the large supplies of the 2016 when the US produced 15.148 billion bushels and the carry-in (left over from the previous marketing year) was 1.737 billion, a 46 day supply. When it was all said and done, the 2016 corn crop carryout was 2.293 billion bushels, a 57-day supply. Presently, the USDA projects the 2

Highlights Dayton Cargill’s corn syrup plant is grinding 145,000 bushels per day, the largest daily grind in about three years. Wednesday evening, Cargill had 50,000 bushels inventory after receiving their first load of new crop corn earlier in the day. They are paying $6.50 for corn through Saturday. Patrick was at Dayton Cargill a little after 8 AM yesterday morning and there was no line of trucks. It certainly would be logical to expect a line of trucks after Cargill jump

Corn Carry Carry is the return storage. In the futures market, it is measured by the spread (price difference) between a pair of futures contracts. Capturing the carry is a major profit center for commercial grain handlers. Back in the day when farmers stored 30,000 to 50,000 bushels max, managing carry did not have the possibility to make or cost farmers a lot of money. Things are different now. Not only do some farmers store hundreds of thousands of bushels, the price of a

Highlights Pro Farm Tour Results for Wednesday Iowa and Illinois: Tidbits The US manufacturing Purchasing Managers Index (PMI) was 47.0; the market expected 48.9. Last month's manufacturing PMI was 49.0. The US services PMI was 51.0; the market expected of 52.1. Last month’s services PMI was 52.3. A PMI number below 50 means the industry is expecting less business in the coming month than the previous month. As a result of this poor economic news. The stock market and many c

Highlights Last half of August is going to be hot and dry for most of the Corn Belt. Suddenly, soybeans and soybean oil are leading CBOT higher. Finally, big specs are buying bean oil and selling meal. Yesterday, November beans were up 18¼¢, September oil up 87¢ per cwt, September meal up 70¢ per ton with a settlement at $404.50. The meal puts summary: Wednesday saw another batch of better-than-expected US economic data showing that interest rates increases are most likely to

The markets usually do not move very much the 24 hours before a USDA monthly S&D as traders have had weeks to determine the positions they want to hold through the report and those on the sidelines stay on the sidelines until after the report. Highlights Poland sent 2,000 troops to the Belarusian border this week. Terrible floods this week in Norway, Slovenia, Alaska, and Northeast China (corn country). Typhoon Kanu’s route changed. It will pass through China’s regions of

Highlights The world markets were really shaken by Fitch’s lower credit rating for the USA government. For a hundred years, America has been the beacon of all that is solid, successful, and reliable. A lower credit rating only happens to poorly managed entities. Yep, America is, in fact, a poorly managed entity. Putin and Turkey’s President Erdogan purportedly will discuss a revival of the export corridor. That news may have pressured corn and wheat even more than the down-

Highlights Ukraine and the EU are considering rebuilding port facilities and fund transportation of grain to ports in Croatia and Lithuania. That will take at least US$1.5 billion and how many months or years? How long will it take a Russian drone to destroy the new construction? They need to spend $1.5 billion to end the war. But then, ending the war is not the goal. Keeping the war going is the goal so all participants in government and war insiders can earn and/or siphon-o

Yesterday, Roger recommended you price 2023 fertilizer. He meant fertilizer for 2024 crops. Highlights Is the weather or the war more supportive of these markets? Does it matter? Wheat certainly gets an extra boost on the war news as the war is in “The Bread Basket of the World.” Russia took another swipe on Ukraine’s port of Odessa again Wednesday and will probably continue to do so. The Viterra and Kernel facilities were both bombed. Major damage was done. That news suppo

S&D Analysis Corn After close study of yesterday’s USDA corn S&D, it was not nearly as bearish as it appeared to us nor as bearish as the market reacted. Old crop corn exports were reduced 75 million, as expected, but feed use was increased 150 million bushels. The USDA is finally coming to the conclusion that when we have the same animal units in a year as the previous year, we will feed the same amount of corn and wheat, That and the 4 bushel yield decline pretty much wipe

Mowery Auction Company is located about 2 hours south of Chicago. They do a big business in farm machinery from west of the Rocky Mountains to the East Coast. One of their driver’s told one of our Ohio clients that a “huge” area of Central Illinois has corn two feet tall and tasseling. What do you folks in Central Illinois say about that? Highlights Red Crown Rot Found in Illinois Soybeans; read about it at: https://www.agweb.com/news/crops/soybeans/red-crown-rot-reaches-ill