Consumer Confidence & Richmond Manufacturing Fall Off A Cliff. The Corn & Ethanol Report

We kicked off the day with MBA 30-Year Mortgage Rate, MBA Mortgage Applications, MBA Mortgage Market Index, MBA Mortgage Refinance Index, and MBA Purchase Index at 6:00 A.M., New Home Sales and New Home Sales MoM at 9:00 A.M., EIA Energy Stocks at 9:30 A.M., 17-Week Bill Auction at 10:30 A.M., 2_year FRN Auction, 5-Year Note Auction, Building Permits Final, and Building Permits MoM Final at 12:00 P.M., and Dairy Products Sales at 2:00 P.M.The Federal Housing Finance Agency reported that the average price for single-family homes guaranteed by Fannie Mae and Freddy Mac increased by 10.% in July, falling short of the consensus estimate of 0.2% gain, marking the 3^rd consecutive month with little or no movement in housing values. Nevertheless, home prices still set a record high in July. The average price was up 4.5% compared to a year ago, marking the smallest year-over-year increase in 13 months. Among the 9 consensus regions, annualized price changes in July ranged from a 1.6% increase in the West South-Central region to a 7.5% increase in East North Central region. Mortgage interest rates have declined for 11 weeks and were below a year ago 9 months. However, the median home price remains unaffordable for the median family income, according to the NAR Housing Affordability Index.Image Source: 
Little/No Rain Projected Across US/Plains Next Two Weeks; Dryness Resumes In East Midwest After Weekend:The Central US forecast is consistent in projected tropical Storm Helene to reach Hurricane status and make landfall in FL Thursday. Soaking rain/regional flooding is projected across the Southeast into Saturday, while lesser rain impacts the far Southern Midwest late into the weekend. Otherwise, the Central US forecast into Oct 9^th is dry. Temps will be warmer than normal. The EU model’s 1-5 day and 6-10 day precipitation forecast precipitation forecasts wet to dry, with the harvest pausing across the mid/South and E Midwest until early next week, but national progress is forecasted to expand normally into early/mid-October. Warmth accelerates drying. Drought/abnormal dryness is set to expand across the US HRW Belt while excessive rainfall lodges and slows the harvest in S Midwest/Delta. The weather focus is shifting to South America by late October.Corn prices were lower in choppy trade in yesterday’s action.The Dec contract jumped to a 2-month high early but fell back due to farmer selling. The next major resistance is currently $4.32 the 100-day moving average . Crop ratings remained steady at 65% good-to-excellent. The IMO ratings suggest an average yield of 183.2 bpa, just below the USDA estimate of 183.6.
Sep 1^st Corn Stocks Estimate:Final 23/24 US corn ending stocks are pegged at 1,805 Mil Mil Bu, vs. 1,360 Mil in 2022/23 and vs. USDA’s forecast in mid-Sep of 1m812 Mil. Theres’s clearly no major disagreements with USDA, but final counts placed combined 23/24 exports & industrial use 15 Mil Bu above USDA and feed/residual disappearance 1 Mil below. Final US corn end stocks of 1.80-1.85 Bil Bu will not be market moving. There is a direct correlation between final US corn stocks/use of 12.1%. USDA’s 24/25 season average cash price sits at the very low end of fair value – but also with the US balance sheet as it stands today. However, ARC views US as caught between tightness and oversupply. US corn stocks/use below 10% correlates with the need to ration available supply and %5.00 spot CBOT futures. Stocks/use of 14% or higher correlates with $3.40-$3.90 spot futures. ARC pegs 24/25 US corn stocks/use at 11.4%, and so implies a continued range of $3.90-$4.40 basis Dec and $4.15-$4.60 basis March. Major change in US corn supply , demand and price will be a function of South American weather between November and April. ARC reiterates that US, global and exporter corn supplies are burdensome, but the issue in the short term is the sheer size of the US harvest – which follows a recovery in supplies. ARC maintains a national corn yield of 181.5 BPA, vs. USDA’s 183.6, but still total supplies in 24/25 will be 16.* Bil Bu- up slightly on last year and second largest on record some 2 BIL Bu have been harvested thus far. An additional 12.7 Bil Bu will be harvested over the next 40-50 days. Since March 2024, monthly ethanol and export disappearance has ranged from 660-705 Mil Bu. The 2024 US corn crop will be absorbed by the marketplace, but it’s sorting out current inventories that keeps in place choppy sideways trade until harvest surpasses 50% complet, which likely occurs by October 10^th. A more bullish outlook follows into yearend.More By This Author:Funds Squaring Positions During Harvest. The Corn And Ethanol ReportPort Strike Will Rise Food & Energy Prices Exponentially – The Corn & Ethanol ReportFed Can’t Save Out of Control Spending. The Corn & Ethanol Report