We kicked off the day with Fed Bostic Speech at 7:00 A.M., Chicago Fed National Activity Index at 7:30 A.M., S&P Global Composite PMI Flash, S&P Global Manufacturing PMI Flash, and S&P Global Services PMI Flash at 8:45 A.M., Fed Goolsbee Speech at 9:15 A.M., Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., Fed Kashkari Speech at 12:00 P.M., and Crop Progress at 3:00 P.M.The Commitment of Traders report showed that for the week ending Sep 17, funds continue to cover their net short ag market positions. Funds bought 8,200 contracts in soybeans, 10,600 contracts across all 3 wheat exchanges, 2,700 contracts in meal, 2,000 contracts in hogs, and 1,950 contracts in feeder cattle. Funds sold nearly 3,000 contracts in soybean oil, 2,700 contracts in corn, and 359 contracts in the live cattle market. Across the 10 principal ag markets, funds bought 19,400 , paring the net short position to 249,000 contracts or the smallest since early June. Ag Resources (ARC) expects the total net short positions in agriculture will be covered in the coming weeks. More data on the US harvest will be available, and S American crops can be better assessed to determine whether funds begin building a net long Ag position or return to their bearish outlook.
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On the Weather Front:We will be watching Disturbance 1 in the Northwestern Caribbean Sea and Gulf of Mexico that has a 70% chance of formation in 48 hours and 90% in seven days. Environmental conditions appear favorable for further development of this system, and a tropical depression or storm is likely to form over the next couple of days as the system moves northward across the northwestern Caribbean Sea and into the southeastern Gulf of Mexico where additional development is possible.Tropical Storm Possible in Southeast Sep28-30: Lasting Harvest Interruptions Absent from Central Plains/Midwest:The major forecasting models are in broad agreement that a tropical storm/hurricane impacts the eastern Gulf in late Sep., and soaks the Southeast with rainfall of 1-3+” . Otherwise, the forecast is consistent with prior runs. Moderate to heavy shower activity will be widespread from NE to OH Sun-Tues. A drier pattern resumes across the Plains and W Midwest in the 6-15 day period. Abnormal warmth continues through the first full week of October. Central US rainfall nexr week does not foreshadow a lasting pattern change, with below-normal precipitation into mid-winter. ARC’s bet is that heavy rains impact the Southeast/East Coast in late Sep, but confidence is low on the exact placement of tropical-based shower activity.
Corn Sheds Additional Premium Ahead of Harvest; Ukrainian Cash Market Rallies Again; Choppiness Forecast Next Week:Friday’s Cattle on Feed was viewed overall as neutral. Dec CBOT corn ended weak for a second day closing below the 5-day moving average on hedge-related selling and an otherwise lack of breaking news. Rainfall early next week will cause only a brief pause in fieldwork, with tropical events into early October be centered on the Southeast/East Coast. Some 4.5-4.7 Bil Bu of corn will be gathered by Oct 1st . Interior cash markets are reflecting large existing supplies. The caps rallies in the short run. Ethanol margins in the cash market remain positive amid a modest uptick in DDG values this week. Ukrainian corn is again priced above US origin, basis fob, and issues in the Black Sea/Europe are numerous. Too much rain halts harvest in France while disease and poor yields have been recorded in the Balkans and Ukraine. 3 of the 4 major weather models keep Brazilian heat/dryness in place into October 6th . Net boost in soil moisture favor Rio Grande du Sol in S Brazil, Paraguay, and fringe producing areas in E Argentina.The outlook is unchanged. Risk leans bullish, but be prepared for ongoing sideways trade into late Sep/early Oct. There will be no shortage of supplies during autumn. Friday’s CBOT corn open interest rose 15,310 contracts, with soybeans up 6,005 contracts, and Chi wheat up 73 contracts. However, October option expiration was large, corn option open interest was off 137,391 contracts.More By This Author:
Funds Squaring Positions During Harvest. The Corn And Ethanol Report
