We kicked off the day with Consumer Inflation Expectations and Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., Consumer Credit Change and Used Car Sales MoM & YoY at 2:00 P.M., and Crop Progress at 3:00 P.M.The July jobs report offered nonfarm payrolls coming in 206,000 jobs versus trade expectations of 190,000. Bit once again, the previous 2 months were revised lower. The May nonfarm payroll figure was slashed by 54,000 jobs (20%) to 218,000, and the April figure was cut by 57,000 jobs (35%) to 108,000 jobs. The nonfarm payroll figures continue to lose credibility as the 2nd & 3rd releases are always a downward revisions.Further adding skepticism are the results from the Household survey. The Establishment Survey showed that since December 2022, nonfarm payrolls have risen by 4.35 Mil jobs were added. Moreover, the June Unemployment rate rose to a 32-month high of 4.1%. The US economy is slowing and US interest rate cuts are in the offing with the 1st reduction potentially possible in September.
Monitoring Hurricane Beryl this weekend, the category 1 made landfall early this morning. The cone of the storm has changed as expected with tropical weather, and my most current update has the EU forecast model showing a cone with rains as northwest as Chicago proper, while the GFS shows it moving in a more southern direction, but both models concur that the Eastern Corn Belt should receive much needed precipitation. Farmers are hoping for a quick moving storm with good saturation without too much rain that could create other issues. We will have a better handle of the situation by Wednesday.CBOT Corn Rallies; South American Premiums Firm; Ukrainian Drought Imminent: Corn futures rallied Friday as model guidance remains consistent in advertising prolonged drynessand the return of heat to the N Plains and Midwest in mid-July. Additionally, South American fob premiums continue to rally. Drought development in Ukraine will be swift. Ag Resources (ARC) maintains that non-US exporter production in calendar year 2024 will be sizable, which underpins Dec at $405-415. Long term export demand is building and will be robust. Argentine second crop yields have failed to improve. Yield last week was 5.48 MT/HA (87 BPA), which implies final production of 45.6 MMT’s assuming no change in yields in the remaining 37% of unharvested corn crop. Recall USDA pegs Argentine corn production at 53 MMT’s. The point that South American basis is rising during the throes of harvest is noteworthy.ARC analyzes Dec CBOT corn is fairly valued between $4.10-450, but Mother Nature that dictates price discovery into mid-August. The last half of July weather forecasts will be watched closely over the coming week and weekend. US corn crop conditions should rise on today’s Crop Progress and the USDA out with the July WASDE report on Friday. The corn price risk is turning upwards. Beef and Pork demand are struggling, with weak numbers, in this long 4th of July weekend, it must be the economy and jobs number. Getting back to corn, weather forecast aren’t providing much in the way of hints of change that could disrupt corn’s crucial pollination window, which is well underway.The CFTC will release their Commitment of Traders report this afternoon due to last weeks 4th of July holiday. The report is expected to reflect managed money added a considerable net short to wheat, corn, and soybean position with corn nearing a record. Historically low prices and the structural make up of the market makes it difficult to sustain a CBOT break until more is known about 2023 US corn/soybean/sorghum yields.More By This Author:Beryl And Unemployment. The Corn & Ethanol Report
Hurricane Beryl Breaking Records Now CAT 5. The Corn & Ethanol Report
Sizing Up Fridays USDA Report’s And Action. The Corn & Ethanol Report
