We kicked off the day with Durable Goods Orders MoM, GDP Growth Rate QoQ Adv, Durable Goods Orders Ex Transportation MoM, GDP Price Index QoQ Adv, Initial Jobless Claims, Continuing Jobless Claims, Core PCE Prices QoQ Adv, Durable Goods Orders ex Defense MoM, GDP Sales QoQ Adv, Jobless Claims 4-Week Average, Non Defense Goods Orders Ex Air, PCE Prices QoQ Adv, and Real Consumer Spending QoQ Adv at 7:30 A.M., EIA Natural Gas Stocks at 9:30 A.M., Kansas Fed Composite Index and Kansas Fed Manufacturing Index at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., 7-Year Note Auction at 12:00 P.M., Cold Storage at 2:00 P.M., and Fed Balance Sheets at 3:30 P.M.
Existing Home Sales in June, reported on Tuesday by the National Association of Realtors, were down 5.4% from May and 5.4% below a year ago. June sales were the lowest since December, and the June sales volume was the smallest since 1995! However, unsold housing inventory rose 3.1% from the previous month to 1.32 Mil homes, the largest since October 2020. Months of supply jumped 11% from May to 4.1 months, the most since May 2020, Inventory is starting to build, which should soon start to be realized in prices and volume. New Home Sales in June, reported on Wednesday by the Census Bureau, showed that sales volume fell 1% after falling 15% in May. Compared to a year ago, new home sales were down 7%. Total new and existing home sales in the first half of 2024 weredown 3% from last year and 25% less than 2022, a 13-year low of 28.7 Mill homes.CBOT Corn Market ends Mixed on wetter GFS model; US Weather Critical Next 30 Days in Determining Global Feed Supply: Corn futures were mixed with European values down on profit taking, while CBOT futures ended slightly higher and Brazil’s market unchanged. Of note is that Ukrainian premiums have added another $.15/Bu. Nothing is quoted there for new crop delivery amid drought/production concern. Whether heat/dryness across the Plains/ W Midwest will persist during August is paramount in determining fair value and whether global stocks can hold steady with last year at 310 MMT’s. Ag Resources (ARC) maintains that bearish input hinges on the hope for record 2024 US yield of 181 BPA plus. USDA projects world less China corn stocks in 24/25 at 99 MMT’s, vs. 98 in 23/24 and vs. 2016’s peak of 128 MMT’s. As such the importance of August weather can’t be overstated. Along with deepening drought in Ukraine, a sub-180 BPA US yields drop world less China stocks in 24/25. ARC’s message is that the recent year build in world stocks has been unremarkable. Price pressure will only be felt if Central US August weather is favorable. Otherwise, world feed grain prices are scoring an early seasonal low. Also, early this morning, the Peoples Bank of China lowered the rate on its one-year medium-term lending facility to 2.3% from 2.5%. China’s central bank surprised markets again by cutting another key policy rate, continuing a wave of monetary easy as it looks to support the country’s ailing economy.Consensus Forecast Stays Hot/Dry in Plains/W Midwest; Normal Rainfall Forecast in East: Yesterday, the midday GFS trended a bit cooler in the Midwest, but odds remain high a lengthy period of heat & dryness lies ahead. Ride-riding storms will favor the Great Lakes/E Midwest but elsewhere rapid soil moisture loss is anticipated. The EU ensemble model’s two-week precipitation forecast has moisture will keep record yield potential intact in IL, IN, OH, and MI but uncertainty is present elsewhere. High temps July 29-Aug 6 are projected in a range of 95-103 degrees. Extreme heat favors TX, OK, KS and parts of NE and western MO. Unfortunately the mean position of the new jet stream is projected to stay aloft Southern Canada, which limits any change of relief from Plains heat/dryness in the medium term, Concern rises if this pattern is extended beyond mid-August. A tropical system is needed to dislodge the Intermountain High Pressure Ridge with the jet stream holding across Southern Canada.Wednesday CBOT open interest data shows wheat bfell 5,722 contracts while corn was up 4,661 contracts and soybeans were up 1,935contracts. CBOT corn open interest data has yet to show a large net short liquidation. Manage money remains short a record amount of CBOT corn/soybean futures on a combined basis.Ethanol stocks jumped to 23.7 mil. Barrels at the end of high expectations and above 23.2 mb from a year ago. As margins remain strong I lean toward a 25 mil/bu increase in corn usage in the August WASDE. Implied gasoline demand surged 7.7% last week to 9.456 mbd, the highest in 8 months and up 6% YoY. Ukraine’s 24/25 grain exports thru July 24th at 2.78 mmt are up 67% from last year. Corn exports account for 1.39 mmt of the total.More By This Author:Money Supply Revealed Anemic Economy. The Corn & Ethanol Report
Critical Stage With Weather. The Corn & Ethanol Report
The Energy Report: Biden Is Out Of It
