We kickoff the day with Baker Hughes Oil & Total Rig Counts at 12:00 P.M., Fed Harker Speech at 1:00 P.M., Cattle on Feed and Milk Production at 2:00 P.M. The Fed lowered its interest rate target by 50 basis points on Wednesday, the largest cut since the start of the pandemic in March 2020. Prior to the start of the pandemic, the last rate cut, which was in December 2018. Fed Chairman Powell repeatedly tried to assure the press that the US economy is strong, which begs the question, “Then why such a large rate cut?”. But the answer, of course, is without massive government spending, the “official” recession indicator, GDP, would have shown that a financial recession starting quarters ago. Perhaps the strongest recession bell whether has been the Conference Board’s Leading Economic Index, which has been unchanged or lower for 30 consecutive months and marked year-over-year declines for 26 straight months. Yesterday’s release for August showed that the index was down 5% from a year ago. It’s been the longest period of year-over-year declines since 2007-2009 and the longest period of contraction without the US government declaring an official recession. US and local government spending will persist indefinitely with neither candidate promising any cuts. A weakening US dollar will be the result. Central US Weather Pattern Discussion Needed Rain Impacts C Plains/W Midwest Sep 22-25; NOAA Projects Southern Plains Drought Expansion: The 10-day Central US forecast is consistent with prior runs. Needed/welcomed rainfall of .50-2.50” will blanket the US HRW Belt, MO, IA, and the entire eastern Midwest Sun-Wed. A drier pattern resumes thereafter. There’s general agreement that the tropical storms/hurricanes into early October will favor the eastern Gulf, which keeps moisture absent from the Plains and Midwest in the 8-15 day period. Warmth persists. Frost is absent from northern areas into Oct 5th . NOAA’s updated Oct and Oct-Dec climate guidance features high odds of normal temps and dryness in October. Dryness in mid/late autumn favors the Southern US as La Nina develops. NOAA’s associated three-month drought outlook projects moisture improvement across the S Plains. Ag Resources (ARC) notes that rainfall of 6-9.00” inches is needed to ease abnormal dryness currently present across the Plains and SE Midwest. Harvest will be rapid, but improvement in river transportation will be short lived as dryness worries linger. World Corn Ends Mixed; Ukrainian Cash Marert Reflects Concern Over Surplus: Dec CBOT corn fell to test support at $4.04-$4.05. There was no specific catalyst for the break, but ARC expects some 4.5-4.7 Bil Bu. Of new crop supply to be gathered by Oct 1st – and the cash market’s left to sort out large supplies. Recent old crop producer selling soon with the rapid harvest of a large crop. The outlook remains neutral into early Oct., but more positive thereafter. US export sales in the week ending Sep12th totaled 34 Mil Bu, vs. 26 Mil the previous week. This is viewed as uninspiring. However, the pace of US sales is typically weak in Sep, with more active demand noted in the Oct-Dec period. Importantly, Ukrainian fob premiums are up $.10/Bu on Thursday. This follows rumors of Bulgaria sourcing N American origin this week – which is unusual. Mycotoxin and low crop size triggers an early end to Ukraine’s 24/25 export program. End users are advised to lock in autumn/winter coverage in corrections. Upside is still pegged at $4.40, Dec, prior to expiration. On top of it all is whether the Longshoreman strike can be averted before midnight September 30th, as retailers and manufacturers are rushing in rushing in merchandise and pushing shipments to other gateway as the walkouts on the East & Gulf Coasts grow more likely.More By This Author:Fed Can’t Save Out of Control Spending. The Corn & Ethanol ReportDo The Numbers Matter? Or Is It Real Feel? The Corn & Ethanol Report Out of Sinc Inflation Keeps Rearing Its Ugly Head. The Corn And Ethanol Report
