We kicked off the day with Chicago Fed National Activity Index, Export Sales, Initial Jobless Claims, Continuing Jobless Claims, and Jobless Claims 4-Week Average at 7:30 A.M., Fed Hammack Speech, S&P Global Composite PMI Flash, S&P Global Manufacturing PMI Flash, and S&P Global Services at 8:45 A.M., New Home Sales and New Home Sales MoM at 9:00 A.M., EIA Natural Gas Storage 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., 5-Year TIPS Auction at 12:00 P.M., Fed Balance Sheet, Building Permits Final, and Building Permits MoM Final at 3:30 P.M.
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The USDA’s October update to US food expenditures showed that total food sales in August rose 5% from a year ago to $213.6 billion, stopping just short of the all-time high that was set in May but setting a record high for the month of August. This is compared to the Consumer Prices report that showed the food price index rose just 2.1%in August. The USDA data shows that Jan-Aug food expenditures rose by an average of 4%, while the CPI data shows just a 2% increase in food costs. Food at home expenditures rose 3% from a year ago to $93.7 billion. Both were just under record highs that were set in May, but both were record highs for the month of August.
Central US Forecast Maintains Better Rain Chances Oct 30-Nov 5:The Central US forecast is consistent with prior runs in that a more active pattern of precipitation develops beginning late this week. Light showers impact IA, Mo, and IL Fri-Sat. Better organized and widespread rainfall is forecast in the 6-15 day period, with potentially soaking amounts covering the E Plains and southern Midwest. The midday AI model advertised rainfall of 2-4” in OK. E KS, AR, MO, IL, and IN Oct 30-Nov 5. The NOAA’s projected two-week soil moisture change is positive. The shift is viewed as timely. Corn and soybean harvest will be near completion in early November, while winter wheat moisture concerns will be confined to the far western HRW Belt. Additionally river logistics improve at least slightly in mid-and late November if wet forecasts verify.
CBOT Corn Rallies for Third Day; Bull Trend to Struggle Without Adverse South American Weather:Global corn markets ended higher for a third session on yet more US export sales and positive ethanol production data. Cumulative ethanol production through Oct 18th is up 3% year-over-year, while USDA projects a modest decline in corn grind in 24/25. Production margins have contracted but there’s nothing to suggest weekly output won’t stay 1-2% above year-ago levels into December. US export sales today are estimated at a sizable 85-100 Mil Bu.Yesterday the USDA announced the sale of 100 thousand MT (4 Mil Bu) of corn to destination unknown. US corn disappearance will be robust in the first half of the crop year. Yet Ag Resources (ARC) doubts Dec CBOT corn can trade above $4.30 for any length of time until/unless heat & dryness impact recently planted crops in Argentina & S Brazil. There just nothing to indicate 24/25 US end stocks drop below 1.9 Bil Bu. ARC recommends against chasing this rally, and be prepared to catch up on hedges above $4.35, basis March. A 67% retracement of mid-Oct’s break occurs at $4.22, Dec, and $4.40, March.
Drier Trend Supports Planting in Argentina; Regular Rain Remains Probable in Central & Northern Brazil into Early November:A favorable mix of rain/sun lies ahead for both Argentina and Brazil. The EU’s 1-5 and 6-10 day precipitation forecast show a shift from soaking rain Wed-Thurs to prolonged dryness in Argentina next week is nearly ideal as the bulk of soybeans there are planted in November. Rainfall in N Brazil expands modestly in the next 6-10 day period, with 10-day accumulation in Mato Grosso do Sul, Mato Grosso, and Goias pegged at 2-4”. It remains a normal early spring climate setup in Aouth America. Argentine rainfall late November will be monitored as a weak La Nina is possible, but it’s rare for the Brazil monsoon to sputter after it commences, and there will be no shortage of soil moisture in Argentina and Southern Brazil the next 30 days.More By This Author:Harvest Rally? The Corn & Ethanol ReportRecord U.S. Yields & South American Weather Concerns. The Corn & Ethanol ReportFunds Piling On Shorts Again. The Corn And Ethanol Report
