.....with all of the moisture forecast for the month of January east of the Rockies. Weak global demand remains a major headwind!

Higher Oman & Dubai crude prices @ end-2024 due to tight supply from Iran & #Russia also helped. Could be short-lived.

https://www.bloomberg.com/news/articles/2025-01-05/latest-oil-market-news-and-analysis-for-jan-6

Feb live cattle up ~$4/cwt this week while feeder cattle up $5.25. Will funds continue to defend long position? Heavy snowfall & bitter cold predicted in the Plains.

https://www.bnnbloomberg.ca/investing/commodities/2025/01/02/cattle-futures-rise-to-record-with-cold-blast-to-hit-beef-supply/

.....record South American production, demand concerns, "wildcard" China, & Trump trade war 2.0 remain headwinds for 2025.

.....sending prices to 2-yr high on a weekly continuation. US forecasts looking colder in January, especially for Center & East. Not surprising for this time of year.

Manitoba exported $15.5 bil of goods & services to the U.S. in 2023. Biggest item was medications with a close 2nd canola and oil at $1.3 bil in 2023. But it's in jeopardy with a threat of 25% Trump Tariffs in 2025? Frozen potatoes & veggies 4th @ $628 mil., Ag equipment $543 & $439 mil pork & live pigs.

Bitcoin is up 10% for the month, 54% since US elections & 151% for the year! 99.1% chance of 25 bpa Fed rate cut.

https://www.cnbc.com/2024/12/16/crypto-market-today.html

Cattle futures to break above resistance. US supply tightness also braces for Trump Trade War 2.0 in 2025!

https://reuters.com/world/us/usda-approves-funds-fight-screwworm-may-resume-mexico-cattle-imports-this-year-2024-12-13/

Recent GDP saw growth below projected 1.5%, & uptick in unemployment. Loonie may hit low @ $0.705 short-term.

https://cbc.ca/news/business/bank-of-canada-dec-11-1.7407231

Sharp +200 mil bu increase in US 24/25 corn export & ethanol usage = ending stocks down to 1.738 bil! Wheat exports raised +25 mil. US soy balance-sheet unchanged. Argentina soy output raised +1 MMT to 52 MMT.

.....Trump announced plans to nominate Paul Atkins as chair of SEC. It pulled back today. Up 140+% in 2024 & 48% since election.

https://www.cnbc.com/2024/12/05/bitcoin-tops-100000-as-monster-2024-rally-reaches-new-heights.html

All wheat was higher up 1.94% vs. Sept & higher vs. expected 34 MMT. Ontario soybean final yield at 51.8 & corn at 180 is too low vs. 2024 Great ON Yield Tour.

.....Crop Scout Cordonnier @ 170 (up +2). More advertised rain could result in record global 130+ MMT ending stocks. Trade War 2.0 looming, next stop $8 beans in 2025?

How will grain markets, & wheat specifically, react to Ukraine ceding territory to Russia to end war? https://bbc.com/news/articles/cn8g8ylvyldo…

.....momentum remains to the upside as the bulls won Thanksgiving. Strong soft commodity prices are largely Trump-risk-free, unlike the grains.

Sudden overhaul of 3-decade-old marketing system in No.2 global grower pushed traders/processors into expanded financing role.
https://reuters.com/markets/commodities/cocoa-firms-pour-money-into-ghana-bid-avert-more-losses-2024-11-27/

4th straight week of improvement & 3rd best in 10 yrs with the wettest Nov. (so far) on record for Southern Plains. This news is priced in but what happens in spring matters more!

New World Screw worm in Mexican cow & border likely closed for 30 days. US supplies could tighten, futures to rally +$5-10/cwt?

https://www.reuters.com/business/healthcare-pharmaceuticals/us-suspends-mexican-cattle-imports-after-new-world-screwworm-case-2024-11-25/

Soybean meal futures remain a weight on soybean futures now breaking below U.S. $300/MT not seen since 2020 with the next target $280 and than the 2016 low near $250! A bear market in meal is a bear market in soybeans. Great news for livestock producers.

.....a major headwind for CDN$ breaking below support $0.72. The 2020 low $0.68 is not out of the question on fears over geo-politics & a tariff war with the U.S.

.....suggests a run to $80,000 to $90,000 before we become overbought well above the 200-DMA.

.....approaching $100/cwt for this time of the year which is rare only 2011 & 2014 traded higher. The U.S. cash market also remains resilient with funds long over 74,000 contracts!

.....stating that it was taken due to CPI reaching the bank's 2% target. BoC said to expect further interest rate cuts, but pace & timing yet to be determined.

https://www.bnnbloomberg.ca/business/economics/2024/10/23/banks-lower-prime-rates-to-595-after-bank-of-canada-move/

.....and increases the chance of a 50 basis point interest rate cut in next weeks Bank of Canada meeting to 67% on October 23rd.

https://www.reuters.com/markets/canada-inflation-slips-16-lower-gas-prices-2024-10-15/

Fed projected that rate could fall another 0.50% by end of 2024, 1% in 2025, & 0.50% in 2026. CME FedWatch Tool currently showing higher chance of 0.50% cut again in Nov FOMC.

- to 98.7 vs 105.6 in Aug, biggest drop since Aug '21. Concerns due to jobs & inflation. Hope is that lower Fed rates will boost economic growth & profits.

https://www.cnbc.com/2024/09/23/stock-market-today-live-updates.html

.....fund short covering over a dry weather outlook in Brazil, more stimulus from China & concerns over a dry fast finish in the U.S. in the past month.

https://www.voanews.com/a/china-unveils-broad-stimulus-measures-to-revive-sputtering-economy/7795961.html

.....lower slaughter & cheap feed allows more time on the feedlots. Futures breakout above support as uptrend continues; neutral-friendly Sept. USDA Cattle on Feed report.

USDA cut 24/25 US & global production. US yield cut to 807 pounds/acre, lowest since 2015. Spec funds' short-covering accelerates.

https://www.bnnbloomberg.ca/investing/commodities/2024/09/16/cotton-jumps-as-traders-cover-bearish-bets-on-storm-output-risk/

Futures see biggest weekly gains in 16 years. Record number of wildfires in center-south growing region. Brazil mills expected to halt cane processing as early as end-Oct.

https://www.bnnbloomberg.ca/investing/commodities/2024/09/20/sugars-biggest-jump-since-2008-is-a-fresh-threat-to-food-prices/

Fed's "dot plot" shows rate at 4.4% by end of 2024. FOMC policy statement said the committee members have gained greater confidence that inflation is moving sustainably towards 2% goal. FOMC policy statement said the committee members judge inflation goals and employment risks roughly in balance.

.....hitting Bank of Canada's target. In its 3rd consecutive cut since June, BoC cut rate to 4.25% in Sept. Next meeting on Oct 23- question is, will it be 25 bps or 50?

https://www.cbc.ca/news/business/inflation-bank-of-canada-target-1.7325365

US economy created fewer jobs vs expected in August, reflecting a slowing labor market. More reason for the Fed to cut interest rates later this month. 

https://www.cnbc.com/2024/09/06/jobs-report-august-2024.html

Corn 13% in drought vs 49% LY, soybeans 19% vs 13% LY. Warm & dry conditions favored for crop maturation & early harvesting.

.....to begin an anti-dumping investigation into canola imports from Canada in retaliation for Canadian tariffs on Chinese EVs. Futures recovered some but (gap-down) pressure continues.

Nvidia earnings beat Wall Street expectations! EPS $0.68 vs. $0.64 est, Revenue: $30.04B vs $28.7B est. Despite 122% revenue growth and data center revenue up 154%, shares dropped 4%. Investors are unfortunately disappointed with slowing growth, even as net income doubled. After 2 years of stellar performance, it's getting tougher to impress, and the massive beats of late '22 are harder to match.

this year’s French soft wheat harvest likely to be the lowest since 1980 shows lower test weights and protein compared to the past 5 years with only 26% meeting 76 kg/hectolitre standard. Protein content also reduced 74% above 11% (vs. 85% avg.).

Heat dome baking Midwest, with temps hitting 99°F+ & heat indexes soaring to 115°F. High humidity, partly from "cornsweat" moisture released by crops like corn worsens situation. The 3rd weather scare of the summer will be short-lived.

9,000 Canadian rail workers have been recalled as the lockout ends, averting further disruptions to the export-driven economy. Railways are restoring service, while Teamsters plan to appeal the lockout in federal court.

Oil prices are surging, with Brent topping $81 and WTI nearing $77. Geopolitical tensions, including Israel's strikes on Hezbollah, Russia's major drone and missile strike on Ukraine, and Libya's force majeure on oil facilities, fueled the spike.

OPEC+ & SaudiArabia will decide on whether to proceed with production increases from October amid economic uncertainty, falling crude oil futures, spreads, a weaker Chinese economy, & refinery margins. WTI bouncing from support, a break below opens up $60-handle...

Canada's TSX stock index retreated from record highs as TD Bank reported its first loss in 20+ years, and the railroad stoppage threatened the economy. It closed down 84.26 points (0.4%) after hitting a record high.

Wheat prices down to $5.20/bu, lowest since Sep 2020. Logistical issues & bigger Ukraine production add to woes. The Canadian rail strike has prompted early grain sales, as over 90% of Canada's grain is shipped by rail, with 25.3 MMT expected for 24/25.

Potential freight rail stoppage in Canada could disrupt the agri-supply chain, hurting wheat, fertilizer, and meat shipments. The strike could affect U.S. exports & imports, costing millions daily. Could impact US ethanol & potash into Canada.

Alberta crop conditions deteriorating due to drought & heat, but real damage likely limited to some regions? Current yield projections not way off vs 2023 final, although further cuts possible? Spring wheat & dry peas higher; barley, oats, & canola lower

commodities volatile this year, with record highs in orange juice & cocoa futures, fluctuating crudeoil prices, & rising gold prices. Base metals like iron ore have slipped. Soft commodities higher due to adverse weather.

Crudeoil prices dropped over $2/barrel on hopes that MiddleEast peace talks might ease supply risks, coupled with concerns over China's weak economy. WTI dropped 3% to $74.37.

Gold prices at new record highs, with trade projecting $3,000/ounce in 2024. Israel-Iran tensions & US elections add to the safe haven asset's surge. Spot steady near $2,508, while US futures hit new highs $2,540.8/ounce.

Mid-tour top observations ONyield24. corn is not wowing us like last year. Tip backs due to moisture stress. No weed or disease pressure. corn plant population a new record high. soybeans surprising us with lots of pods & big yields. Thank You Platinum Sponsors.

S&P 500 closed higher as strong economic data eased slowdown fears, setting up major indexes for their best weekly performance of the year. S&P & Nasdaq closed higher for the 7th straight session. Inflation moderation has calmed recession concerns.

5 new renewable diesel plants boosted U.S. production by 44% to 282,000 bpd, per EIA. The U.S. now has 22 plants, West Coast capacity more than doubling. The shift is accelerating, but it pressures biodiesel producers due to lower incentives.

Consumer spending exceeded expectations in July as inflation eased. Retailsales rose 1% vs. a 0.3% forecast. Excluding autos, sales were up 0.4%, beating the 0.1% estimate. June sales were revised to a 0.2% decline.

U.S. annual inflation slowed to 2.9% in Jul, the lowest since 21, with CPI up 0.2%. Higher housing costs could keep a Sep rate cut on the table. CME projections for a 0.5% cut in Sep down to 25.5%. The minutes might hint at a larger/emergency cut, though unlikely.

US PPI (Producer Price Index) rose 0.1% in July, below the 0.2% expected. Core PPI was flat. FedWatch now shows a 54.5% chance of a 0.50% cut (higher probability) & 45.5% chance for a 0.25% cut. PCE needs to be down.

USDA reported a record US 24/25 corn yield 183.1 bpa, above expectations & vs last month’s 181 bpa. soybean yield a record 53.2 bpa, above & last month’s 52 bpa. 24/25 US soy crop 4.589 bil bushels with ending stocks 560 mil bu = futures down sharply!

Ukraine rushing to export as much grain as possible this summer, despite Russian attacks on key ports, doubling July exports to 4.2MMT. More near-term supply for this oversupplied global market.

Global investors poured $98.58B into money market funds by Aug. 7, the biggest weekly influx since Apr, driven by U.S. slowdown fears and yen strength. Global equity funds saw $6.33B in outflows, while bond funds attracted inflows for the 33rd week.

Pre-report estimates for the next weeks WASDE where USDA excepted to lower harvested acres but offset with higher yields. Could be a bearish surprise and the forecast weather so far in August has been perfect grain filling weather.

The EPA is investigating renewable fuel producers over fraudulent biodiesel feedstocks using palm oil. New SAF plant in NE boosts biofuel demand long-term, but we keep kicking the can down the road. EPA’s probe since Jul 2023 also demand-friendly.

If North Carolina were a country, it’d rank as the 7th largest corn importer globally, mainly for livestock feed and ethanol. But with drought impacting, 80% of crop is in fair or worse condition, yields could drop driving up demand.

After crops were stricken by drought in the U.S. east, the flooding from tropical storm Debby is too little too late.

U.S. corn conditions fell 1% to 67% GE, while soybeans improved to 68% better than expected for a 1% drop. Winter wheat harvest is slightly ahead of avg; spring wheat is behind. Illinois leads in corn ratings with 81% GE. Corn yield trade talk of 185 - 190 bpa!

USDA reports U.S. corn & soybean good-to-excellent ratings fell last week, corn -2%, soys -1%, and wheat -4% but normal for this time of the year. All crops remain well above of the 5-year avg & remain in better condition than in 23 definitely no cause for alarm.

International markets plunged, causing U.S. markets to drop. The S&P fell 8.6%, NASDAQ dropped 5.4%, but this a healthy correction not a recession with U.S. Q3 GDP expected at +2.6%! Since Mar COVID lows markets are up 150%, buy the dip!

U.S. market slid after a weaker jobs report sparked recession fears. Dow fell 475 points (1.2%), S&P dropped 1.6%, Nasdaq declined 2.3%. With the unemployment rate rising to 4.3%, highest since Oct 2021. CME now expecting a 58% chance of a 50 point rate cut by Sep.

Since 1980 the U.S. Fed has either hiked or lower U.S. interest rates during every single election year except 2012 when interest rates were already at 0!

The 10-year Treasury fell below 4% for the first time since Feb. Jobless claims surged to 249000. Continuing claims hit highest since Nov 2021. The ISM dropped to 46.8. This headline news lowered the chance of a Sept. rate cut from 87.7% to 74.5%.

U.S. crop ratings actually improved in July, pointing to a stress-free corn pollination period, with a cool/wet July and timely rains it suggest a USDA corn yield estimate in the August crop report that is higher than 181 bpa.

The Fed held rates in todays July meeting but hinted at future cuts. Dow hits a record high above 41,000, NASDAQ +2.43%, US $ -$0.309, and US 10 Year Yield -0.14%. CME Fed Watch surges from 87.7% to 91.7% for a Sep rate cut.

Prices hit new lows in corn, with soybeans following the trend. Traders suggest soybeans have bottomed out, but it could still drop further. Prices haven't yet reached 20/21 lows from the U.S.-China trade war. With a possible record crop expected.

Crude oil prices hit June lows due to concerns about China's demand and a potential Middle East ceasefire. Brent fell to $79.01/b and WTI to $75.15/b. Poor Chinese economic data continues to impact prices. OPEC to meet Thurs, but no changes in output are expected.

Freezing temps in Argentina worsened 24/25 wheat crop already hurt by severe drought. Rosario earlier reduced wheat planting area by 2.9% to 6.7 mil Hc due to drought. With Arg being such a small player the markets dont care, with wheat now drifting to new lows.

Shares of crypto firms rose after Trump's promise of friendlier regulation. Analysts see a Trump win as positive for crypto, Trump pledged national bitcoin stockpile and aims to mine all remaining bitcoin in the U.S. Bitcoin +18.6% in Jul!

Investors face more big tech earnings this week, poor results could trigger more selloffs, like Wed's decline in S&P & Nasdaq. Alphabet’s positive revenue led to a 5% drop due to fears of AI spending. With the Magnificent 7 down $2 tril market cap in Jul

WTI crude oil is down 1.65% the 3rd weekly decline as Chinese demand raises concerns. The end of 2024 summer driving season and bigger production increases by OPEC+ members this fall and winter will continue to weigh on prices.

PCE index matched Dow analysts' expectations at ~2.5% YoY, down 0.1% MoM. Despite the decline, it's not fast enough. CME traders lowered Sep cut expectations to 87.7% from 93.3%. US yield & US $ Index fall with next FOMC meeting Jul 31st. Investors cheering news.

Real GDP grew at a 2.8% annualized rate from April to June, surpassing economists' 2.1% expectation and following a 1.4% increase in Q1. The consumer may not be as tapped out as we think as alot of the growth was driven by strong consumer spending.

Its the 2nd day of the wheat tour and U.S. spring wheat in NW and N-central ND is set for record yields. Avg estimates at 53.7 bu/ac, up from 45.7 YOY and the 5-year avg of 40.02. There are record winter & spring wheat crops coming with harvest 4-6 weeks away.

Bad news for global demand, Chinese officials report a bumper wheat crop that will push the grain harvest to its largest level in 9 years. With wheat still at lows not seen since 23 and well below the 5 year avg. They expect 23 mil Ha of wheat with yields up 2.6%.

The 1st day of the U.S. Quality Council Wheat Tour in ND projects record yields for spring wheat in south & east ND. With an avg hard red spring wheat yield of 52.5 bu per acre up from 48.1 bu in 23 and more than 5-year avg of 42.2 bu.

U.S. corn & soybean conditions remain above 5 year avg with IL. IN and IA showing increase from last week, soil moisture still higher YOY & the long-term avg with no threat to pollination. If conditions do not start falling the gains in futures will come to an end!

Despite a strong U.S. economy, many Americans feel otherwise. A survey found 60% believe U.S. is in a recession citing high costs & financial struggle. Is the consumer tapping out because of affordability? The economic data suggest otherwise.

Speculators set a new record for net short positions in soy with strong U.S. crops and an oversupply of beans in China which have driven futures prices near 4-year lows. Canola net short also grows but markets have since been spooked by a North American weather scare.

America is expanding canola, companies are investing in canola for biofuel with TN and KY acres are to grow by 7X! Scoular Co is converting a facility to process canola. The biofuel market in North America is expected to reach $20bil by 25.

China's soybean surplus is growing due to record purchases & low feed demand, pushing down prices for soyoil & soymeal. This oversupply may reduce imports during the U.S. peak marketing season, pressuring prices already near 4 year lows.

Swollen shoot has infected 81% of a major cocoa region in Ghana, world's second-largest grower. This comes after dry weather in ivory coast sent cocoa prices surging to record highs! Two countries produce 60% of the worlds cocoa production and tree crops take time to replenish.

China the worlds largest producer for urea, dropped its exports 86.2% in the first half of 2024 due to Beijing's efforts to cool domestic prices, risking a global supply squeeze threatening prices. Beijing limited 24 exports to 944000 MT

A 60% tariff on all Chinese exports to the U.S. could halve China’s annual growth rate, reducing GDP by 2.5 percentage points if implemented by a Trump administration. The tariffs could impact exports, consumption, and investment.

Global chip stocks dipping as ASML, Nvidia, and TSMC hit by reports of tighter U.S. chip export restrictions by Biden administration, Trumps comments. But we have been down this road before not the first time buy the dip on fear selling.

Derecho brought 30 tornado warnings across Midwest, with 86mph winds causing tree damage, flooded roads. Agricultural impact seems minimal with little crop damage and power recovery in progress, storms will likely be a non starter for ag as rain makes grain.

Traders now see a 100% chance of a Fed rate cut by Sep, with 91.6% odds for a 0.25% reduction. This follows Jun CPI data showing a 0.1% drop, bringing inflation to 3%, lowest in 3 years. With the Dow up 675 points to a new record high!

Funds expanded their record short positions this week in corn & soybeans according to the latest CFTC report. Despite semi-friendly USDA July crop report on corn, market sentiment remains negative, indicating potential price declines ahead.

China’s economy grew by 4.7% in Q2, the slowest in five quarters, missing the 5.1% forecast. Retail sales and new home prices fell, showing weak consumer confidence. Policymakers have yet to boost domestic demand in a protracted property downturn.

Times are getting tough farmers, and although the USDA did not adjust corn & soybean yields in today’s USDA WASDE report they did surprise with better usage and lower ending stocks to provide a futures bounce to stop the bleeding for now.

U.S. Treasury yields rose on a hotter PPI reading but is set for a weekly decline after a surprise drop in the June CPI. Despite the hotter than expected headline PPI, chances of an interest rate cut went up to 88% from 86% yesterday for Sept.

This week’s drought monitor shows minor drought reductions in major corn and soybean growing regions. Rain from Hurricane Beryl remnants helped the Midwest's east, while the previously oversaturated west dried out, improving overall crop growth conditions.

with less signs of LaNina developing, the Australian meteorological bureau has suggested that we may not see its development until as late as next year with only a 50% chance of it occuring later this year! The 2024 summer weather scare is over!

The S&P 500 hit a new record above 5,600, rising 0.6%, driven by semiconductor stocks. The Nasdaq also hit an all-time high, up 0.9%. SPX posting 36 new 52-week highs while the Nasdaq Composite recorded 26 new highs so far in 2024.

Looks like another "kick the can down the road" for the USDA July crop report due out Friday June 12th. Timely July rains so far with hurricane Beryl hitting some of he driest U.S. ECB growing regions means trend to above avg trendline yields. More pain ahead!

Despite 24 being as wet as 19, U.S. corn acres increased? In 2019, both acres/yields fell by 3.1 in corn & 8.5 million in soybeans. Yields fell 8 bpa in corn & 2.1 in soybeans by the final crop report in January. Something doesn't add up! What makes 24 so different?

As hurricane Beryl gets downgraded to tropical storm, the areas that were too wet in USMidwest will dry out and the areas that were too dry will be hit with residual rains. Great news for growers but not for the markets. Dec. corn needs to hold $4.0425/bu!

CFTC data showed a significant fund short in corn, with Managed Money traders selling 58,872 corn contracts for the week ended July 2. This includes both liquidated longs & new shorts. In real time, Funds could now be net short over 365,000 delta-adjusted contracts.

Bond yields fell as US unemployment rose unexpectedly to 4.1%, highest since Oct '21, & vs expected 4%. 10-yr Treasury off -0.065 to 4.28%. Fed wants lower inflation but worsening labor market raised bets on a -0.25% interest rate cut in Sept to 75% vs 64% last week

In June, the UN food price index held steady at 120.6 points, unchanged from May. Increases in veg oil, sugar, & dairy were offset by lower cereal prices. The index remains 2.5% lower than last year & 24.8% below its peak in 2022, after record highs were set

South America bracing for LaNina. In transition phase now. Memories of recent rare three-peat 2020-23 La Nina (followed by ElNino) warn of possible historic drought that could impact the upcoming crop.

Southern Russia & eastern Ukraine getting prolonged extreme heat in major growing regions, with temps 100+. SovEcon recently raised Russian 24/25 wheat crop +3.4 MMT to 84.1 MMT due to high yields in the south. Other Black Sea region crops at risk?

Eastern midwest drying out causing expansion of moderate drought, while places like Minnesota & the Dakotas with their record levels of rain continue to be waterlogged & more rain expected.

corn & soybean prices hit ~4-year lows on heavy supply outlook. Stocks burdensome- USDA June 1 corn stocks @ 4-year high of 4.99 bil bu with 61% held on farms (most since '99). Soy stocks @ 970 mil bu, up +22% Y/Y, also saw 48% on farms (most since '06).

Mexico's new government plans to abandon AMLO's aim to cut yellow corn imports, great news for U.S. farmers as mexico is one of the largest markets for U.S. corn at 40+%! AMLO's GM corn restriction originally sparked a U.S. trade dispute.

After a very wet plant 24 we lost 10% of the Ontario corn acres to soybeans & SW Ontario looks the worst (biggest corn counties look the worst) as we also lost 5% of the soybeans acres so best guess 2 million corn, 3.135 million soybeans. he light ground will be the best this year while the heavy clay the worst! Haldimand Niagara and Renfrew counties look the best!

China expected to import record volumes of soybeans in Jul, driven by lower prices and concerns over potential trade tensions with U.S. if Trump returns, (old tariffs were never removed?) possibly adding some much needed pressure on soys.

USDA June 1 Hogs & Pigs report was neutral. With hog futures already down 20.5% all of news has already been priced in so look for the bleeding to stop & a corrective bounce near-term form oversold conditions. But cash and cut-outs need to show some life soon!

StatsCan's Jun 24 acreage report shows Canadian farmers planting more soybeans, lentils, peas, oats, but less acres wheat, canola, corn, & barley vs. last year. Total whaet acres were lower vs. expectations while canola was higher. News was already priced into futures. The March 24 Ontario survey was spot on forecasting 2.21 corn, 3.137 soybeans & 1.033 wheat vs. Stats Canada at 2.2, 3.1 & 1.09 respectively.

In the June 1 USDA hogs & pigs quarterly forecast, continued increases in the number of pigs/litter may continue to offset herd reductions but any negative news is already priced into oversold hog futures.

2024 June StatsCanada Principal Acreage Pre-report est. coming in high after a wet/delayed 24plant & reports of switching to oats barley. We could get a bullish surprise with canola acres below 21.2 & wheat acres above 27 with rally in prices in spring.

Congestion at Singapore's container port has reached its worst level since COVID-19 due to vessel re-routing to avoid the Red Sea. This disruption has caused bottlenecks in Asian and European ports. Global port congestion is at an 18-month high, with 60% of ships waiting in Asia. Over 2.4 million TEUs were anchored as of mid-June.

In northwestern Iowa, a major U.S. corn-producing region, flooding has caused river levels to surpass records set in 1993. By July 9th of that year corn futures surged 15.5%! Will 2024 repeat and rhyme?

Dome of Death has vanished 1st week of July staying in the SE so no threat to the crops in Midwest means no spooking of the funds & more pressure on prices. One last chance to rally grains comes from either this Fridays USDA reports or July 11th crop report.

New York cocoa futures on ICE fell over 10% to a month lows as speculators liquidated long positions, with good weather in Ivory Coast and Ghana raising production prospects. Demand weighs on prices, as Nestle predicts consumers will cut back on But this tree crop demand remains inelastic. Double top could be bearish long-term if we break support at $7,000.

U.S. N/C Plains in SE SD, SW MN & NW IA facing continued flooding from this weekend with more rain forecast. Some regions getting 15 to 18 inches! Billions bushels & thousands acres lost but futures as funds think "rain makes grain."

Eastern China's hotter temps delay corn planting in key regions with 35% of annual production. Some areas have irrigation to beat dryness, but others face lower planting/yields. La Nina around Jul-Sep may bring heavy rains, worsening crop damage.

U.S. jobless claims fell by 5,000 to 238,000, bit above expected 235,000, remaining historically low. 4-week avg up to 232,750, highest since Sept. reuters reported- this data & tepid retail sales last month keeps Sept Fed rate cut on the table?

WTI crudeoil over $82! Seasonal demand, lower inventories, refinery runs, weather risks, and OPEC+ extending production cuts thru Q3 should tighten the market. Escalating Middle East tensions between Israel & Iran-backed Hezbollah keeps trade on edge. $90?

Weekly drought monitor shows worsening dryness in the Midwest. heatdome likely to further reduce soil moisture this week & worsen drought in next week's update, especially for the ECB? Developing young crops could see a drop in USDA crop conditions?

Nvidia is now the world's most valuable company (AI boom!), surpassing Microsoft with a market cap of $3.34 trillion. Shares rose 3.6% on Tuesday. Nvidia up +174% this year & up 9-fold since end of 2022!

US corn & soybean GE ratings down -2% wk/wk to 72% & 70%, but remain higher Y/Y & vs the 5-yr avg. Futures find support. Heatdome over parts of the US Midwest & Ontario. Center to east US growing areas drying while to the west, wet conditions concern.

US Treasury yields dropped after May retail sales rose only 0.1% vs expected 0.2%. Also a downward revision to April data- now shows 0.2% decline. Weaker consumer spending could prompt Fed to cut rates later this year, potentially multiple times?

More trade wars! EU, which is the main pork exporter to China, is hit with retaliatory anti-dumping probe in response to their EV export curbs. Negotiations ongoing. Bad news for EU pork exports but opens door for more US pork sales to China?

Heatwaves affecting 30-40% of China's major corn and wheat growing regions, though authorities talking up another bumper summer grain harvest this year! More smokescreen? If heat continues/intensifies/expands, crop losses will increase, prompting more imports?

Three tech giants Microsoft, Nvidia, and Apple now hold a combined market value of $9.2 trillion, surpassing China's stock market excluding Hong Kong. Their $3.255 trillion worth each exceeds China's $9 trillion in actively traded stocks.

The latest IRI plume forecasts LaNiña development in July-September 2024, persisting into winter 2024-25. ENSO-neutral conditions are currently present, with a 65% chance of La Niña this summer and an 85% chance by winter.

China's record heatwave, with temps up to 107°F, are impacting 30-40% of key growing corn & soybean regions. This benefits the U.S. as Brazil imposes a 20% tax on these crops. As the largest importer, China’s demand may rise further.

May’s U.S. PPI fell 0.2% from the previous month & was up 2.2% YOY vs. the expected 2.5%. More good news but the Fed now forecasting only 1 rate cut for 24 (60.5% chance for the 1st cut in Sept). It will keep the U.S. $ Index elevated.

USDA's WASDE report disappoints, fails to show a bullish wheat story. Argentinian corn forecast remains high despite bug infestation. No shift in market sentiment; focus back to weather. Russian export ban or extreme US heat needed now for a rally.

U.S. inflation slows in May with CPI +3.3% year-over-year 0.1% below market expectations. 10-year yield down ahead of Fed meeting, US $ Index -0.944. Takes chance of first interest rate cut from 47% to 61.3% in September. Takes the pressure off the Fed to be hawkish and how many more better data points do we need to get a cut?

A state of emergency declared in Russia's most productive producing region in Rostov due to drought, with crop losses estimated at up to 30%. This following damage from May frost, with crop losses at about 1 mil ha or 2.4 mil AC out of 32.5 total.

Significant spring rain in southern Prairies reduced droughts. Though long-term deficits persist, with soil moisture not fully recovered. By end of May, 59% of ag land was Abnormally Dry or in Moderate to Exceptional Drought, down from 75% last month and 85% in April.

2024 NOAA May precip totals Apr/May 2019 10.17" (128th wettest in 130 years), Apr/May 24 9.88" (126th) with corn at 1% & 5% drought. USDA might surprise with lower corn yields on the 12th? In Jun of 19 USDA cut corn yield by 10 bpa. Could we see a 5 bpa drop to 176 bpa?

Possible ring of fire, heatdome or highpressureridge for the U.S. Midwest late June to July. This atmospheric blocking pattern can cause extreme heat, with forecasts 6 degrees above normal causing damage during pollination in corn. 24 weather scare is coming.

Hot U.S. economy, hot housing mkt, hot inflation & now a hot May payroll 272,000 better than expected will not change the trajectory of U.S. interest rates with a 50% chance of a 25 point cut at Sep. meeting but next weeks post Fed meeting narrative key. US $

The pre-report estimates for 24 June crop report for the U.S. corn yield at 181 bpa is too high as this year was just as wet as 2019 & someone could get surprised! We need a friendly USDA to keep the short covering bounce going or we could be in a house of pain!

BOC and the EU cut rates, with the U.S. possibly next as falling crude oil lowers the price of goods along with CPI and PPI. Could the Fed cut sooner than expected on July 31? With an 81% chance for a pause, markets still remain skeptical of a July cut.

Nvidia's market cap surged past $3 trillion, propelled by demand for its AI chips. Compared to Microsofts 3.146T and Apples is 3.004T. Share price rose over 4% to $1,219. Following a 3,224% increase over 5 years with major tech giants as customers.

Chicago wheat down for the 6th straight day after hitting a high at the end of May on concerns about damage to Russian crop. This is despite sovecon further reducing Russia's wheat crop to 80.7 MMT from 82.1 & below 23's at 93 MMT. The news appears to be priced in for now. $6.50 support needs to hold on a weekly basis.

The BOC cut interest rates by 0.25% to 4.75% the 1st since 2020 to combat inflation after 6 holds. Canada is the first G7 to cut with possibly up to 8 cuts by the end of 25. Bearish Short term the Loonie if U.S. continues to hit pause but bullish long term.

U.S. corn starting at 75% good-to-excellent but it took us 7 weeks to get planted and still have 2-3 weeks left to get the remaining 9% of corn & 22% of soy beans to be planted. Rain makes grain until it does not. We started well but will not finish well.

Extreme weather plagued the US Corn Belt with some regions wettest May in 132 years. April 24 was wetter than 19 & May could surpass it when NOAA data is released. Could this be a repeat of 2019 with PP acres? USDA could surprise in June acreage report June 28th.

The BOC may cut interest rates to 4.75% -.25% on Jun 5 with 83% chance, with 3 more cuts likely in 24. Or will they surprise & hit pause for more economic data & cut at next meeting Jul 24th? A cut this week would be bearish for the CDN $ & a + for basis if the U.S. Fed delays.

Rainfall in Australia, with more expected may increase the country's wheat harvest by up to 1MMT. This boost in wheat production would help offset global supply concerns following crop losses in Russia, which drove Chicago futures 10-month highs.

The Feds preferred inflation measure was +0.3% in April & +2.8% vs. last year inline with expectations matching the gain in March. Stocks higher, US $ Index lower & 10-year yield trades below 4.50% with a 48% chance of the 1st interest rate cut in September.

This weeks U.S. drought monitor showing almost completing erasing droughts across major corn & soybean growing regions, with winter wheat ay 25% & spring wheat ay 3%. Rain forecasted through the first week of June but a little too late to help yields.

Real GDP increased at an annual rate of 1.3 percent in the first quarter of 24 likely due to a decrease in consumer spending. down from the advance estimate of 1.6% and notably slower than the 3.4% pace in the final three months of 23.

The S&P 500 just achieved its best weekly streak in 35 years, rising in 23 of the last 30 weeks a record since 1989, per DB. If it closes up this week it will mark 24 gains in 31 weeks, a feat last seen in 1963. The index has rallied 25%, adding $12T in market cap.

USDA says 83% of corn is planted with 68% of soybeans complete but what it does NOT tell you is the month of May had extreme U.S. weather with 469 tornadoes, 3,475 severe wind events & 1,640 severe hail storms. Some regions in May saw the wettest in 132 years!

This week's USDA crop progress report for May 28 reported better than expect U.S. soybean planting by 2% at 68%, as expected for corn at 83%, slightly behind expectations for spring wheat by 3% at 88% and winter wheat conditions fell 1% more than expected at 48% G-E.

According to USDA Birdflu particles were found in one cow at a U.S. slaughterhouse, but not in 95 others. Meat from these animals didn't enter the food supply. Two U.S. dairy workers tested positive. No live virus found in milk or beef after cooking.

Friday's storms formed a 600+ mile derecho, starting in Nebraska and moving through Iowa to Illinois. By definition, a derecho must have wind damage extending 400+ miles, be 60+ miles wide, with gusts of at least 58 mph.

Extreme drought is causing severe issues in Mexico corn production -17% from 23. The drought has led to U.S. corn imports, with Mexico buying 4.45 Mil bu surging 42% YOY. Look for higher import trend to continue even with a new President elections this weekend.

Stripe rust detected in winter wheat fields in southern Ontario prompts monitoring by OMAFRA. Thriving in temps of 10-15°C with high humidity, it can cause yield reductions if left untreated. OMAFRA recommends scouting, and fungicide applications for effective control.

The markets got spooked by China's military drills around Taiwan which aim to test its capability to "seize power" over the island. These exercises, the biggest in over a year, follow the inauguration of Taiwan's president, who Beijing opposes.

Rains have delayed planting season 2024 in Midwest but alleviated droughts in Iowa, Montana, Kentucky & Wisconsin. Talk of replants, mudding it in, compaction, prevent plant & weed control less than ideal. After a wet Apr/May a high pressure ridge in June could bake crops & create prefect storm.

Orange juice prices soaring Brazil, world's largest producer, reports a poor 24 outlook. São Paulo/Minas Gerais expect to harvest 232M boxes, -24% YOY, marking the lowest since 89. Weather/greening disease hit production hard. Futures +62% since 01-19-24.

U.S. soybean futures are trending high surprising many perma bears as rumors about 20-30 canceled Brazil soybean cargos, PNW is now more competitive than Brazil. China remains "wildcard" but 24 Brazil soybean crop may not be as RECORD large as many thought!

Tech-based Nasdaq hits record highs, driven by Nvidia. Today’s Q1 rev. $24.5B expected, +241% YoY. Q1 contribution to S&P 500 growth est. at 40%. Positive earnings will drive market sentiment despite markets overreacting to inflation worries again after U.S. Fed minutes.

The price of wheat is testing resistance at $7.00/bu as IKAR lowers 24 Russian wheat production to 83.5 mmt down 9.5 mmt or 349 million bushels) from the start at 93.5. A dry/cold weather forecast not looking good & next shoe to drop a Russian export restriction!

U.S. milk production down 0.4% vs. last year down less than expected due to bird flu. Despite a 55,000 head decline in dairy cows an 8 lb increase in milk production per cow is offsetting sending Class III milk futures lower. A double top could be bearish!

Silver futures the white metal surged to highest since 2013 above $30/ounce fueled by a lower U.S. CPI print & expectations that interest rates will come down by end of 24. With a weakening U.S. $ it will attract more investor dollars in gold & silver.

The drought monitor shows a halving in droughts and dryness across top corn and soy growing areas in just two months. The Midwest is nearly drought-free, preparing for La Nina. While this bodes well for summer, it presents continued challenges for planting season 2024.

As of May of 2024 new crop 24/25 U.S. corn, soybean and wheat sales are small compared to other years. China may have already been waging a silent trade war with the U.S. for months and could turn into a BIG problem for U.S grain export demand!

Reports Canadain smoke in U.S. cornbelt as far south as Iowa! Over 135 active fires, 39 out of control in BC & Alberta. Is this a repeat of 23 when timely smoke in Jun created better than expected USDA U.S. yields & sent grain prices plunging?

New U.S. tariffs on china, targeting metals, semiconductors, & EV, could prompt retaliation, impacting U.S. ag. Commodities most sensitive to trade with China soybeans & cotton. This is just the start if Trump gets in as President in 25!

CONAB increased its 23/24 soybean crop forecast +1.162 mmt despite headline news of flooding in southern Brazil suggesting they were too low to start off with or news was already baked in but USDA still an outlier.

Speculators reduced their net short positions in the grain complex last week as of May 7th on global weather threats in the U.S., Canada, South America, Europe, Russia and Australia! Funds net buying in corn was the largest since May of 2019!

China's May 24 crop report has soybean import forecast down to 94.6 mmt vs. USDA 109 , corn import forecast down to 13.0 mmt vs. USDA 24.6? Let the debate begin like CONAB vs. USDA on South America. Frosts continue to down russian wheat forecasts USDA at 88 vs. IKAR at 86.

More frost in Ukraine & Russian wheat that continues to get beaten up, threatening 10% of SW Russian crop that makes up 40% of total. Add dry weather concerns/replanting = new weekly closing highs as USDA reports 24 SRW US wheat crop that is 106 mb less than 23.

Class 3 milk prices have surged by 25.3% since early April due to increased slaughter of dairy cows amidst a bird flu outbreak. If this rise continues it could possibly lead to an all-time record high above of U.S. $24/pound.

Areas Texas, Dakotas and Ohio are the wettest on record for last 60 days, dating back to 1893! April rainfall CornBelt 1.74" above normal, wettest April since 2013 & 8th wettest on record! The 7-day outlook is drier, but planting will be limited too many are soaked!

Wet weather and mixed temperature is causing concern for wheat growers in France the provider for 5.4% of the world's total wheat production at 767 MMT. This comes after a freeze in April likely reducing crop forecasts and ratings further.

Flooding in southern Brazil disrupts food storage and shipping, threatening exports. Port access cut off, rail halted, and roads blockaded, increasing freight costs. Silos also flooded adding to more potential damage and loss in soybean production.

Canada's main stock index rose to its highest level in nearly a month, driven by financial stocks amid hopes of interest rate cuts. TSX up 0.13% at 22,289.31. Financials climbed 0.3%, led by Brookfield Asset Management.

Stats Can Mar 31 stocks report friendly. canola, barley & all wheat stocks were lower than expected. durm slightly higher. The most dramatic change was oats halving Y/Y, flaxseed had the largest jump at 73.91%

Severe weather alert as National Weather Service warns of dangerous thunderstorms in the Plains Monday likely to damage crops and farms. Oklahoma to Kansas faces rare Level 5 'high risk' of tornadoes. multiple tornadoes, large hail expected.

As the old saying goes in stocks "sell in May & go away" but the new one in ag commodities is "cover in May & go away" for the big spec hedge funds! While funds still remain short grains expect this trend to continue as the upside momentum builds.

The proportion of U.S. drought is cut by 50% since Oct. 1 of 23 thru end of April 24. Improvements seen in Rockies, Plains, & Great Lakes. Meanwhile, the HRW wheat continues to deteriorate in KS, OK & TX. Mild rainfall in Mississippi valley to help plant24.

Pre-Report estimates for Stats Canada's March 31st report out next week Tuesday May 7the forecasting a decrease in Canadian wheat, durum & oat stocks. Weak demand see canola and barley stocks higher vs. a year ago.

Heavy rainfall Rio Grande do Sul, Southern Brazil, over 500 mm or 19+ inches in past month with more flooding/rain. 17% corn & 40% soybeans at risk, 1 & 8 mmt respectively. 23/24 Brazilian soybean crop low 140's vs. USDA at 155 friendly futures!

Railway workers at CN & CPKC vote to strike by May 22, threatening Canada's & US critical grain & fertilizer exports. Negotiations stalled for 6-months, concerns over safety provisions but a wet delayed U.S. planting season trumps this news.

U.S. Feds next move is NOT an interest rate hike! This is great news & will go a long way to helping market psychology & investor sentiment. A 45% chance of a U.S. interest rate up in 24 drops to almost 0 with one rate cut for Nov. lower treasury yields = lower US $ Index.

IRS, DOE release Greet rules for SAF credits. A one size fits all plan does not work for farmers nor does cover cropping and no till farming. Its a start but more work needs be done as cheaper sugar ethanol from Brazil provides larger tax credit.

New contract lows soyoil not seen since Jan. 21 as we await the GREET rules later today all weighing on soybean & vegtable oil complex including canola. EIA reports Feb soyoil usage at lowest since Dec '22 & Argentine Oilseed Maritime workers on day 2 strike.

U.S. testing ground beef in states with bird flu outbreaks in dairy cows but assures the meat is safe. Milk, more testing is needed to analyze whether "any viral particles" are present. This latest headline news will weigh on the cattle complex.

U.S. testing ground beef in states with bird flu outbreaks in dairy cows but assures the meat is safe. Milk, more testing is needed to analyze whether "any viral particles" are present. This latest headline news will weigh on the cattle complex

Concerns about solar panel installations disrupting farming are echoed across the U.S. Midwest. Risks to soil quality and future crop potential loom large. potentially harming food production, Is short-term gain worth long-term ag risks?

U.S. soybean exports to China face increasing competition from Argentina in 2024, adding pressure on declining U.S. market share. Brazil's dominance and rising Chinese demand contributing. With Argentina's bumper supply, potentially impacting U.S. exports.

The avg U.S. pork cutout value over the summer months (June to August) for the years from 2012 to 2023 is $96.50/cwt. $120/cwt is rare but have a good chance to hit in 24 as have already been above $100? Have those hanging orders ready!

Global stocks are set for their worst month since September, but strong tech earnings could spur a Wall Street rebound after a higher than expected US PCE +2.8%. Japan's yen hit a 34-year low, MSCI's global stocks index -3.4% for the month.

U.S. drought monitor shows dryness almost gone in Michigan and Iowa's extreme drought receding. Wisconsin and Minnesota also seeing improvements as the 8-14 day weather forecast remains wet. But be careful what you wish for as plant 2024 gets delayed.

Early wildfires in Alberta and B.C. might signal a tough summer, with drought conditions elevating fire risks. Alberta has seen 198 wildfires, while B.C. faces early fires after 23's record-breaking season. We might be looking at a repeat of 2023.

10-14 day U.S. plant 2024 weather too wet! Is this repeat of 2019? May 12, 19 US soy were only 8% planted 2019 Jun acreage report -4.6 million soy acres. Final 2019 soy yield -2.1 bpa to 47.4! Soy futures +$1.325/bu, low May 13 $8.1550, high June 17 $9.48/bu.

10 -14 day U.S. plant 2024 weather too wet! Is this a repeat of 2019? May 12, 19 U.S. corn was only 30% planted. 2019 June corn acreage report -1.1 million corn acres. Final 2019 corn yield -8 bpa to 168! Corn futures +$1.0925/bu, low May 13 $3.6375, high June 17 $4.73/bu.

China's soybean imports from the U.S. halved compared to last year China imported 2.18MMT of soybeans from the U.S., while imports from Brazil surged by 81% to 3.02 million tons, comprising over half of total imports. Overall arrivals hit a four-year low of 5.54MT.

New contract lows in soyoil futures as speculators turn bearish amid global veg oil price weakness. Net short position in CBOT soy oil surges to 53,295 contracts (record short -109,950 in 2018) largest weekly selling since 2006!

Investors are getting tried of sticky inflation, monetary policy & geo-politics rotating out of AI stocks with Nasdaq -2.0% while DOW was +0.56%. Perhaps the funds are finally rotating in to ag commodities adding a war risk premium?

The pork industry is having a comeback driven by declining feed costs and increased demand. Wean-to-finish is seeing profitability rise, reaching $5.50 per head. International demand for U.S. pork is growing, with exports up 7.5% in 23 and to continue rising in 24.

Prices of oil surged 3% after Israel attack near Isfahan Iran, but it was limited. Lets see what happens on the weekend as the region remains on edge & being short these markets is too risky. Look for a commodity short squeeze heading into the weekend.

Argentina's corn harvest faces further significant cuts due to spiroplasma spread by leafhopper insects. The outbreak has already slashed forecasts by 6.5 million tons. Northern provinces see losses of 40-50%, far higher than usual 5%.

U.S. wheat farmers face profit challenges in 24 due to large global supply and high production cost. Despite good crops, many farmers may not break even. its particularly dire for wheat farmers in Great Plains, facing losses despite better yields.

Gold prices remain near record highs amid MiddleEast tensions. Potential escalation could further boost gold demand. Analysts project $3000/oz in 6-18 months. Despite rate cut expectations easing, gold outlook still remains bullish.

Pork output experiencing its first quarterly decline in China for nearly four years during Jan-Mar with farmers slaughtering fewer pigs to buoy hog prices. Pork production down 0.4% to 15.83MMT, first drop since Q2 2020 with 194.6 mil hogs killed.

U.S. Stock Indexes dipped over growing concerns over Iran-Israel conflict escalating, the S&P 0.47%, the Dow down 0.18%, Nasdaq down 0.84%. The 10-year treasury hit a 5-month high at 4.63% on higher-than-expected US Mar. retail sales, signaling hawkish Fed policy.

Confirmed HPAI at NorthCarolina and SouthDakota dairy farms bring the total to 24 farms in eight states affected by H5N1 avian influenza. Infections in some states are linked to dairy cattle imported from Texas, where the virus was first detected.

Oil fell after Iran's weekend attack on Israel as news is priced in with WTI at $84.89. Keep an eye on the region as 31% of global oil production comes from the Middle East. A closure of the Straight of Hormuz would add a further geo-political risk premium.

Leafhopper infestation persists in Argentina, affecting second-grade corn in SantaFe province. The insect transmits dangerous bacteria causing corn stunt disease. Central and northern regions are hardest hit, with significant losses for producers.

This is unprecedented, 17 U.S. states restrict cattle importations from areas with bovineflu cases in the U.S. USDA advises extreme caution in cattle movements. WOAH/CDC emphasize surveillance, biosecurity, & PPE use to prevent virus spread.

Recent droughts have been shaking up the U.S., overall topsoil and subsoil conditions listed as adequate+surplus from the USDA have been in decline YOY. Poor subsoil and topsoil conditions may pose challenges for plant24 and its harvest for corn and soybeans.

March U.S. CPI +0.4%, better than expected annual inflation at 3.5%. Core CPI, +0.4% monthly, 3.8% annually. Stocks fell, Treasury 10 year yields at 4.50%, U.S. $ 1.05, 5-month high, CDN $ to 5-month low $0.73. 35.7% chance of first cut in July. BOC unchanged 5.00%.

Global temps hit new high for the 10th consecutive month in March breaking 2016 record at 14.14 degrees despite easing ElNiño . More severe heat may reduce yields. Livestock & crops maybe at increased risk from heat stress.

World food prices bounced back in March, rising from a three-year low, led by increases in vegetable oils, meat, and dairy products, according to the FAO. The index averaged 118.3 points, up from 117.0 points in February, with vegetable oils surging by 8%.

Palmoil futures surge on seasonal March Malaysian export boost, up ~30% vs. Feb. Also +16% rise in March production is from a low base in Feb. Lower Ringgit vs USD is supportive. Veg oils recovery continues.

Soft commodities like sugar & cocoa +455%/400% are leaving the ag commodities behind in the dust like corn -52.3% since peak of 22! Both sugar/cocoa have one thing in common drought. Will a 24 looming La Nina do the same to the ag commodities?

Soft commodities like cocoa & sugar futures are outperforming all other commodities +400% & 85% since start of 23 from drought while NaturalGas down 85% since peak in 22 but historically cheap. Time to book your corn drying needs!

Wheat futures +2% amid rumors of Russian export curbs, later refuted. Russian wheat prices up prompting traders to cover shorts. Cheap but poor Russian wheat flooding global markets. Firming Russian fob market driving optimism.

This week's Drought Monitor brings a mixed bag across the Midwest. Dryness gone in Ohio with overall reductions seen. Severe droughts down slightly across the board. However, moderate droughts expand a bit from Missouri to southern Illinois and western Kentucky.

Following Gold, Silver prices surge to a 2-year high at $26.55 per ounce, up 11.5%. Unlike gold, ETF investors are flocking back to silver, purchasing nearly 1200 tons in the past three weeks. Silver ETF holdings up by 570 tons since start of year.

HRS wheat planting has started in the U.S. According to USDA's first 24 Crop Progress report, 56% of U.S. winter wheat is in good/excellent condition, up from 50% in late Nov. & much better than last year! Best rating for 4 years!

16 out of 41 major commodities performed poorly in Q1-24. Natural Gas biggest loser, down 30.31%, followed by Soymeal (-12.51%), MN Spring Wheat (-10.85%). Chicago & Kansas City wheat rounded out the top 5 worst performers. Time to BUY NG & lower 24 drying corn costs!

Q1-24 saw a turnaround for commodities, with 26 out of 41 posting gains compared to just 12 at the end of 2023. Cocoa led with a 132.75% surge, followed by Lean Hogs at 27.44% and Bitcoin at 27.17%. Cattle, crude oil, and cotton also made it to the top 10!

Gold futures hit a new high, driven by U.S. rate cut expectations and its safe-haven appeal. April futures hit $2,264.2 today. China's weak economy and real estate sector drive demand while banks globally diversify reserves, fueling rally.

Bird Flu spreads to U.S. dairy cattle for the first time, detected in several states including Kansas, Michigan and Texas. Agencies stress safety of pasteurized dairy products. Impact on milk supply limited, no price increase expected.

Encouraging news as drought conditions improve across the Midwest week over week! Moderate and severe droughts receding in Wisconsin and Minnesota, while extreme droughts lessen in Iowa. The only area seeing dryness creep back in is Kentucky.

24 U.S. planted corn & soybean acres could revert back to the mean/average as margins/economics suck on all crops. WE would not be surprised if total acres in corn/soybeans come in near the 10 year average in todays USDA March Planting Intentions Report.

FAS forecasts reduced soybean planting in China for 2024-25 due to lower prices and higher corn margins, dipping from 10.05 to 9.95 million hectares. Despite steady soybean intake at 103MMT, domestic consumption is forecasted to reach a record 120.8MMT.

Official figures released on Tuesday revealed a remarkable surge in Argentina's beef exports, hitting a record high not seen in over 50 years. February saw shipments of 82,548 metric tons, marking the largest monthly export volume since 1967!

The Francis Scott Key Bridge collapse in Baltimore will have no impact on ag but will freight cost, it is the 29th largest port in the U.S. and it will impact farm machinery as it is a key importer at 1.3 million tons in 2023.

Its official Agricorp is out with final Ontario 23 corn yield 202 bpa a NEW RECORD HIGH surpassing 21's 200 bpa vs. ONYield23 at 203 bpa! Soybean yield 53 vs. ONYield23 at 53.5. Its been 6 straight spot on years out of 8! Thank you scouts, farmers, hosts/sponsors!

Cocoa market's record intensifies, it marks 39 record closes since Nov 28 of 23, destroying the old record of $5368 set in July 1977! Very thin trading makes it for only the very faint of heart! Cocoa futures surged 4.5% to $10080!

Past La Nina analog years like 2020/2010 weather resulted in a mixed final soybean yields with 2020 Derecho year soybean yields defying projections +8% but a 2024 yield drop to 49 bpa could see soybean futures rally back to test the ceiling at $14 for a 6th time.

Top U.S. corn & 2nd largest soybean grower Iowa faces mandatory water restrictions in its 4th year of drought as plant24 nears. Dry conditions, impacting 23% corn, 19% soybean acres. Farmer's talking 89yeardroughtcycle. Livestock farmers looking for feed supplies.

The USDA predicts China's soybean imports to hold steady at 103 MMT in 24/25, matching current levels but 2 million tons lower than 2023/24's forecast. Stable demand in poultry, driven by competitive prices and soybean meal usage, offsets hog sector decline.

Pirates attack Bangladeshi-owned ship off Somalia, taking hostages as piracy resurgence alarms industry. Recent strikes by Houthi militia provide cover for attacks. Concerns rise over higher costs and risks for shipping companies. Navy & industry officials on alert.

AAFC Mar update raised Canada's 24/25 wheat crop est., exports, usage & carryout. canola crop reduced, crush raised & carryout .barley & corn crops & stocks raised. peas & lentils crops & stocks Report was supportive canola, oats, peas & lentils.

The use of AI will revolutionize health monitoring on farms. By detecting subtle changes in behavior, prototypes flag illness in pigs long before it's visible to human eye. This is crucial as animals often hide symptoms, posing challenges for even senior barn staff.

NOAA predicting LaNina summer 24 which could impact U.S. yields. 2010/2020 were similar analog years with La Nina & corn yield drops of 7% & 5% respectively. A similar outcome in 24 with La Nina looming could see corn yields168 & prices above $6.00?

London cocoa at new highs due to supply concerns in Ivory Coast & Ghana. Driven by threats to crop quality amidst inadequate rainfall/heatwave. Arrivals at Ivorian ports since Oct. -27% YOY. May Ice Cocoa traded $8,500 (old record $3,500), July above $7,700/mt.

Wet conditions in England causes concern about sowing winter wheat varieties in spring. The UK wheat area is expected to fall 15% YOY due to dismal weather, potentially the smallest area since 2020. However, rain makes grain?

U.S. 10 year Treasury yields steady ahead of FOMC meeting. The Fed expected to keep interest rates unchanged with a possible 46.5% chance of the 1st 25 basis point cut in June but that could get postponed to July. inflation remains sticky with no excuse to cut yet.

This week's drought monitor shows improvement in Illinois, Indiana, Ohio, Michigan, Missouri, & Kansas after heavy rains. Moderate drought expanded in Missouri, Wisconsin, Minnesota, northwest Iowa, Michigan Upper Peninsula, & Wisconsin.

Major African cocoa plants in Ivory Coast and Ghana halting or reducing processing due to an inability to afford bean purchases. Cocoa prices more than doubled in past year, furthered by a projected deficit in global cocoa production and shrinking cocoa stocks.

U.S. is losing ground in global corn exports as Brazil gains momentum. In 2023, Brazil surpassed the U.S. in corn shipments, securing nearly 30% of the global market share in 2023. Both countries combined now account for almost 60% of global corn exports.

Intense rains in Argentina pose challenges for soybean harvesting in the 23/24 season, it may soon lead to crop damage. Floods hit parts of Buenos Aires, with up to 75 mm of rain. Rains may benefit the 24/25 wheat crop, excess moisture threatens crop harvest.

StatsCanada early 2024 acreage est showed canola off -3.1% Y/Y to 21.394 mil, a 4-yr low! All wheat up +0.1% to 27.045 mil, biggest since 2001! corn up +1% to 3.885 mil, soybeans off -0.3% to 5.592 mil. Producers' planting intentions can will shift some

CONAB slashed crop production forecasts due to adverse weather. Soy output cut by 2.6MT to 146.858MT, with lower yields in key regions. Corn production estimate lowered to 112.753MT, Second-corn production expected to drop by 14.7% compared to last season.

Ukraine's grain exports in early March reached 1.54MT, down from 1.93MT last year. Total exports for the July-June marketing season dropped to 31.2MT from 34.2 million. Wheat exports accounted for 12.5MT, corn 16.7MT, and barley 1.76MT.

Bitcoin prices surged to a new record high above $72,000 following the UK's Financial Conduct Authority permitting cryptocurrency-linked exchange-traded products. The FCA will allow exchanges to list crypto-backed ETNs for professional investors.

FAO global food price index dropped 7th consecutive time in Feb to 117.3 points, lowest since Feb 2021, off -0.7% vs. Jan & -10.5% Y/Y. The drop was led by major cereal price drops despite sugar/meat increases. Cereal prices -5% vs. Jan to -22.3% Y/Y.

US 10-year Treasury yield dropped to 4.04%, lowest since early-Feb. US dollar index broke sharply below its recent trading range & key supports to 102.615 as trade weighs in US FederalReserve comments & expectations of rate cuts this year (starting in June).

ABARES forecasts a potential 6% rebound in Australia's agriculture production for 24-25, raising industry's value to $90.8 billion, the third highest on record. Forecasts also predict rise in farm incomes, with average broadacre farm cash incomes at $192,000.

Midwest drought worsens +3.68% wk/wk to 77.15%. Iowa's extreme drought worsens +1.6% to 20.18%. Illinois D1-D4 worsens +14.29% to 21.66%. Missouri D0-D4 worsens +13.93% to 99.49%. Significantly worse vs. 2012 across the region! LaNina to worsen situation?

Recent years have seen changes in US beef production, with a decline of 4.7% in 2023 and a further projected decrease of 2.9% this year. To mitigate these fluctuations, the USDA expects a 10.7% increase in beef imports and an 8.3% decline in exports.

Bitcoin hits all-time high $68,791, fastest-growing BlackRock ETF +$10Bil in just 37 days! This surge follows +150% climb in 2023, with ETF turbocharging rally. ETFs make it more acsessible for investors for investors, propelling $4.2bil net flows in a month.

Adverse weather in 2023 expected to slash wheat and barley production in Kazakhstan's grain-growing region for 2023-24. USDA lowered wheat harvest estimate by 26% to 12.1 million tonnes. Quality issues lead to excess feed-grade grain.

U.S. wildfire smoke is early in 24 as 1.255 million acres ravage Texas Panhandle, killing livestock (85% cattle in panhandle) & destroying crops. Wildfires in OK (31,500), NE (71,000) & MN (2000). A warm dry risk to Mar/Apr = very bad start

Despite rising U.S. stocks of corn, soybeans, & wheat, sorghum is scarce. 23/24 projected exports 240 million BU, mainly to China, with tight ending stocks 22 million BU. Strong demand/dry soils suggest anin acres away from U.S. corn/soybean acres.

High fertilizer prices still influenced by natural gas, global trade, international tensions. Russia's role as major fertilizer producer is impacted by sanctions. Europe instead buys higher from US, "why sell to US farmers for cheap when Europe pays a premium?

Production is booming in SAF, with exponential growth projected 55M gallons in 2023 to 1.789B by 2028 with goal of 35B gallons by 50, leveraging corn-ethanol industry to meet demand. Challenges with price/availability remain but L-T positive for U.S. corn farmer.

Cordonnier projected new crop U.S. soybean production at 52 bushels per acre, totaling 4.5 billion bushels on 87.5 million acres. maintaining estimates for South American soybean production at 145MT for #Brazil and 50MT for Argentina.

U.S. economy grew at solid 3.2% in Q4, slightly revised down from 3.3%. Inflation mildly up, while growth slowed from 4.9% in Q3. 23 saw 2.5% growth, up from 1.9% in 22. Signs of slowing momentum in retail, housing, & manufacturing. No recession or no landing forecasted.

Some good news for a change in grain complex as funds have been quietly covering their record short combined positions in all wheat flavors from Nov. 23 at -198,652 to -134,598 +64,054. Look for a similar trend in the coming months in other grains.

2024 May cotton futures rise 2.32 up 2.4% to new contract highs. $95.60 is a 2-year channel top and a key pivot point is $96.55 and a close this Friday will suggest a bullish continuation of the bull trend to $113 -155 in 3-5 months.

London/New York cocoa futures parabolic as dry weather lowers production driving demand. London cocoa +4.2% 5,572 pounds/ton, Ice +3.5% $6,468/ton. Seasonal winds Africa worsen crop outlook. Deficit 23/24 could to 500,000 tons 7 year low.

Potential drought looms for Saskatchewan in 2024 as minimal snowpack and above-normal temperatures raise agricultural risks. The province is the world's largest exporter of peas, lentils, durum wheat, and canola. Lower yields could affect exports.

Record close in the DOW above 39,000 and S&P 500 & NASDAQ at all-time highs! Thanks to a blow out 4th quarter earnings by NVDA with a year to date performance +60+%!

In 2023, Russian grain exports soared to a record 66 million tonnes, worth nearly $16.5 billion. Key markets included Egypt, Turkey, Saudi Arabia, India, and China. Despite lower global prices, ag export revenue surged to $43.5 billion.

Comparing droughts in the U.S. midwest in 24 vs. 12 the start of 24 is much worse & what will a return of La Nina bring? Iowa at 56+% in a D2-D4 drought. Will we get lucky again with timely CDN smoke in June & timely rains in July?

Concerns rise in Brazil as forecast remains bleak through March as Safrinha corn crop lacks subsoil moisture by 4 inches according to NOAA. Reliant on soil moisture, it faces vulnerability due to slow planting pace.

Great Lakes ice cover at historic low 2.92%, well below the usual 40% for mid-February. NOAA's Great Lakes Environmental Research Lab notes this is the lowest since records began in 1973. Dry conditions ideal for starting the spring soybean crop.

US Dollar hit 3-month high as US inflation data (up 3.1% in Jan) beat expectations (2.9%), severely weighing on chances of a US Fed rate cut in March. March US$ Index futures hit 104.855 yesterday, +4.52% in less than 2 months. Rate cut now in June?

The 10-year U.S. Treasury surged to a new high at 4.269%. Inflation +0.3% in Dec. hotter than expected +3.1%, raising doubts about Fed rate cuts. The dollar index, +0.6% at 104.66, DOW down over 500 points. CME Fedwatch 38.9% for a June rate cut.

Malaysia's palm oil stocks hit a six-month low in January due to plummeting production, despite steady exports. This decline supports benchmark futures, vital for the world's second-largest palm oil producer, after Indonesia, which faced a 10% drop in 2023.

According to CFTC & COT report speculators added to their short positions in soybeans -130,300 but remain shy of record high on May 14, 19 at -165,000. Fund managers reversed their selling in soymeal, but added to cotton futures sending prices +12.4% in 24!

RSE reveals that 14-day heatwave caused damage to Argentine Soy, with prime soybeans in the core region experiencing 10-30% loss, second-class soybeans -10% of planted area. Recent rains restoring conditions, with up to 80 mm of rainfall already, more expected!

High temperatures and low rainfall impact soybean crops in Argentina, with 41% facing stress. Buenos Aires Grain reports 77% of first-class soybeans in good condition but warns of losses in second-class soybeans due to heat wave.

With SPX topping 5,000 next target 5874+17,5%! aka “rational” exuberance. This is not a bubble as SPX trading 20X earnings & NASDAQ at 25 vs. the Dotcom bubble 30/70. SPX +14% after inflation annual return past 15 years twice L-T average over 220 years!

US Climate Prediction Center predicts a shift from El Niño to ENSO neutral by April-June 24 (79%), followed by a growing chance of  La Niña by June-Aug 24 (55%). But we never had a "super" El Nino so La Nina (hot/dry weather pattern) could come in sooner.

Red Sea shipping route attacks drive demand for alternatives. However, due to the canal's lower water levels demand cant be met. As Ships reroute expect prices to go up to compensate. Canal officials wait until the end of the 2Q before evaluating draft depths.

Goldman Sachs/Bank of America boost NVDA's price target to $800 on strong AI demand/improved GPU supply. Shares surge to record highs above $700 but valuation is being stretched near-term. NVDA, Amazon, Meta, Alphabet, could lead SPX earnings growth in Q1 24.

EU Commission President Ursula von der Leyen proposes retracting EU's plan to halve pesticide use amid farmer protests. EU farmers welcome the move, EU emphasizing the need for a sustainable farming future.

Argentina's farms brace for a heat wave as the 15 day forecast turns drier affecting key crops soy and corn. Harvest forecasts hinge on adequate rainfall, with concerns about potential reversals in production forecasts if weather conditions do not improve.

Oil fell despite a Middle East attack. Traders prioritize China's economy over tensions. Brent at $82.40/barrel, US WTI at $76.78/barrel. China debt crisis concern impacts demand more than attack. US vows response, Iran denies involvement. US stresses no war intent.

IMF raises global growth forecast for 2024 to 3.1%, citing U.S. strength and China's fiscal support. U.S. to grow at 2.1%, euro zone and Japan at 0.9%, and U.K. at 0.6%. Central banks may consider rate cuts in the second half of the year.

U.S. Fed expected to maintain rates amid rapid economic growth/easing inflation. No landing predicted, but risks remain. Relief for consumers as borrowing costs fall with falling inflation. Investors continue to cheer the news with stocks at record highs.

UK halts Canada trade talks over beef and cheese dispute. Negotiations paused amid disagreement. Talks may resume for stronger trade ties. Both sides express readiness to continue discussions. Bilateral trade data: £25.9bn in 2023, 2.7% of Canada's total.

A 25 Trump reelection could mean a new China/US trade war, raising tariffs +30% or more on China, +10% on trade partners. Economists warn of destabilizing impact on economies, projecting $1.6 trillion cost & 700,000 lost jobs. A game changer for grain markets.

S&P 500 at record high on earnings optimism- Netflix up +12%. Microsoft +1.3% reaching $3 trillion market value. Alphabet, Amazon & Meta each up 1+%. Semiconductor index at record high on strong chip demand outlook. Some caution as Tesla results awaited- EV demand a concern?

China Ag ministry aims to cut hog output due to oversupply, debt & losses. Farmers lost $10.6/hog average in '23. pork output hit 9-yr high at 57.94MMT. Sow herd down -2.5mil to 41.42mil. Ministry will guide to reduce production capacity & fatten pigs

Breakthrough Clear Flame Engines using 100% renewable E98 ethanol for heavy-duty trucks saves 50% in fuel costs! 3% of heavy truck market = 1 billion bushels of new corn demand! The technology, lowers emissions & offers cost-effective solution for the ag sector.

Mato Grosso/Parana lead, as they lower soybean production to 150.1 mmt down from 159.1. Planting for the 2nd corn crop has begun. Look for further downgrades as yields disappoint.

according to container shipping giant Hapag Lloyd. Maersk calculates the lengthier round trip of 10-12 days (7K Km+) raises costs by 50%.

EIA report said stocks up +1.3 mil barrels as of Jan 5 to 432.4 mil, vs expected 0.7 mil drop. Europe's weak economic outlook added to oil demand concerns.

https://www.reuters.com/business/energy/oil-prices-extend-gains-after-us-crude-stocks-draw-2024-01-10/

2023 as a whole, the index is @ 124, -13.7% off Y/Y.
Meat Index 110.4 in Dec, off -1.8% Y/Y, for 2023 as a whole it is off -3.5% Y/Y.

https://www.fao.org/worldfoodsituation/foodpricesindex/en/

..... with investors shaking off concern that US regulators won’t authorize ETF to directly hold the digital-asset. Bitcoin was up +150% in 2023!

Kansas wheat in drought unchanged wk/wk at 56% & better vs. last year at 88% (of which 48% was exceptional drought).

..... vs. end of Nov and significantly better Y/Y. Illinois wheat conditions off wk/wk & Y/Y.

Lower US$ supportive...
Brazil's Mato Grosso reportedly is planting 2nd season cotton on abandoned soybean fields.

Ag exports boosted vs. Brazil as their real makes new contract highs. Add Brazil's crop weather concerns & likely delayed harvest, the US grain export program is supported in Q1-2024?

Rail closings @ El Paso & Eagle Pass, Texas disrupted entire supply chains & crimped trade. The pleased grain industry called for avoiding a repeat of this situation.

https://www.bnnbloomberg.ca/us-mexico-border-railroad-crossings-reopen-after-five-days-1.2015052

- as the US$ drops & yields fall. Middle East war a factor too.

.....but technicals are weak as chart breaks down into new lows.

Iowa, E Nebraska & Kansas, SE South Dakota, S Minnesota, SW Wisconsin, & N Missouri have precip deficits of 20 inches or more over last 4 yrs.

https://www.dtnpf.com/agriculture/web/ag/news/article/2023/12/18/driest-western-corn-belt-lifetime?referrer=NLSnapshot

Current supplies are ample but demand is holding on.....

Soybean harvest already delayed, pushing main corn season. They usually sow less corn when they miss ideal Jan/Feb planting window.

https://www.reuters.com/markets/commodities/brazilian-farmers-slow-fertilizer-buys-drought-dampens-corn-planting-plans-2023-12-18/

A break above $77 could breach recent downtrend. Since the Middle East conflict began in Oct, this sort of regional involvement was feared to fuel crude futures...

32% affected by D1+ drought, down 5% from prior week & much lower than 2022. Washington has just 1% of its crop in drought. Kansas continues to struggle, 64% of its wheat in D1+.

.....thanks to Chinese purchases. This was the 10th straight week of both corn and soybean sales coming in over 1 mmt.

Short-term nothing changes with regards to global balance sheets.

.....and 3 rate cuts in 2024. New all time high at $37,139 up 14.5% in less than 2-months!

5th straight day of decline as near-record US exports boost supplies. Futures dropped by ~quarter from peak in late-Sept. 

.....and are scouting the world for supplies. Could be the 6th straight higher close, & a triple bottom on Mar 24 Chicago wheat, creating a massive short covering rally.

All wheat up by 7+% to ~32 mmt. Canola saw a 5.5% jump to 18.3 mmt. Futures priced in a lot of this?

Wheat production is estimated at 25.5 mmt, -37% lower Y/Y. Canola off -33% Y/Y to 5.5 mmt.

44% in at least D1 drought, +2% wk/wk. Kansas winter wheat at 65% (+3% wk/wk) with 5% in extreme drought (D3). Drying this early is not good with an El Nino milder/dry winter forecast.

It's an overall bearish report near-term but the markets focus will soon turn back to trading South America weather.

.....with long-term support at $65.00 despite war in Israel-Hamas.

.....greenhouses by 50%. Field trials will look for a 25% boost in yield, starting in Manitoba, Sask, and Montana in spring of 2024.

Spec funds (as of 31 Oct) are only long 735 contracts from high of 19,486 as of mid-June. A break below long-term support $235 could see $217.05/cwt by year-end.

.....& a lower bias. This reduction could be first ever for this time of the year. Markets do not have this priced into futures.

.....after dropping to record lows for 2nd starlight year, near -12 feet ft. Welcome news as it could improve export demand, barge activity, & increase basis.

.....the popularity of Beyonce tour & Barbie/Oppenheimer films, both of which some think contributed to U.S. 4.9% GDP Q3 growth rate.

Most of the damage is considered to be minimal but drought did more damage & USDA wheat estimate at 24.50 mmt is 10% too high.

.....Ukraine's Infrastructure Ministry denied that there is a suspension, adding ports in the Odessa region are still processing ships.

.....as the biggest sun oil producers take a bigger market share, capitalizing on currency depreciation. This weighs on canola & soybean oil values.

Sizable global potash supply in jeopardy as Israel’s key port operations impacted. Add higher US & European natural gas, fertilizer prices go even higher!

Some ECB states lagging. Early farmer focus more on beans, corn will get its turn soon. But harvest expected to slow down due to rain thru upper Midwest.

The drop comes after the 10-year treasury bill rose to a 16-year high of 4.8% as a result of the Fed's promise to keep rates higher for longer.

https://www.cnbc.com/2023/10/02/stock-market-today-live-updates.html

Similarly, Ohio saw a 27% increase in D1, which has sat at 0% since mid-August. Some relief was seen in IA and WI but extreme drought remains.

Stats Canada 2023 July Grain Stocks Estimates

Source: Stats Canada, QTPLus

40% soybeans vs 38% LW & 21% LY. North & Central Illinois turned very dry again. It'll get worse next week? 7 worst states MO, IA, NE, MN, WI, KS & TX make up 50% of US corn crop.

IA corn good-excellent is -17% worse vs 2022 (IA accounted for 18+% of US crop); soybeans G-E also -17% off Y/Y. IA currently is 99.49% in drought.

Best corn crop that Ontario farmers have ever produced! Variability & white mold in soybeans could be an anchor on yield but a great finish could offset.

Record-breaking corn & soybeans yields across the province, with the east & southwest leading. Compared to 2021, many of the counties outperformed on yield.

Pro Farmer released their crop tour estimates with a corn yield of 172 bpa (USDA 175.1) for a crop of 14.960 bil bu (USDA 15.111 bil bu) and a soybean yield of 49.7 bpa (USDA 50.9 bpa) for a crop of 4.110 bil bu (USDA 4.205).  

If the hot dry finish continues into September, the U.S. final national corn yield could be a sub-165 bpa and the U.S. soybean yield sub-49. This will create a story in corn and send futures back to $6.00 as ending stocks fall to 1.5 - 1.6 billion bushels. Soybean futures will need to ration demand with ending stocks at 150 million bushels or less and futures could see $15 - $16/bu. The lows are in!

US crop & soil moisture conditions will be impacted. Soybean development will be impacted the most but it can also affect corn grain fill.

UBS expects deficit of 1.5+ mil bpd in Sept, following ~2+ mil bpd deficit in July & Aug.

https://cnbc.com/2023/08/04/oil-prices-set-for-sixth-weekly-gain-as-producers-pledge-output-cuts.html

Yields higher with 10-year Treasury yield trading ~4.18% & near its highest since Nov 2022.

https://www.cnbc.com/2023/08/02/stock-market-today-live-updates.html

Illinois saw a +4% increase to 47% S-VS while Indiana saw a -3% drop (41%). Iowa also saw +4% increase to 67% S-VS, +21% higher Y/Y.

.....constrained by deep production cuts from OPEC leader Saudi Arabia, providing support for prices which are expected to rise in coming months.

https://www.reuters.com/business/energy/oil-inventory-drops-set-stage-higher-prices-2023-07-31/

59% (+4% wk/wk) of corn & 53% (+3%) of soybeans are now in at least D1 drought conditions. These numbers are up from 29% & 26% last year respectively.

Central & Southern IA is expected to see heat index values up to 110 F, KS up to 104-112 F. Bad news for yields if this extends into mid August.

Increases in D1, D2, & D3 affected areas. Wisconsin and Minnesota both saw significant regression. WI saw a 4% increase in both D2 & D3 conditions, while MN say 10%+ increases in D1 & D2 areas!

US drought continues to weigh on the crop. Spec fund net length in cotton is climbing.

If heat & dryness next week is confirmed for end-July & August with below avg. soil moisture, it could create fireworks.

23/24 global corn production up to 1.220 bil MT, +9.0 MMT vs. prior.
And Black Sea grain trade issues raise market volatility.

Almost the entirety of the US is forecasted above normal temperatures. Combining that with below normal precipitation throughout the eastern corn belt, crop conditions may take a hit.

MO & MI corn poor-very poor ratings now at 33% (-6%) & 14% (-8%). IL & MI beans saw significant improvement as their P-VP sit at 22% (-7%) & 15% (-12%).

US becomes a little more competitive globally, providing a tailwind for exports near-term.

Support from ideas that US Fed could finally slow interest rate hikes, better demand outlook...

https://oilprice.com/Energy/Crude-Oil/OPEC-Raises-2023-Oil-Demand-Forecast.html

Imports dropped to 1.45 MMT, off 400,000 MT vs. last month. Consumption expected to drop -100,000 MT to 7.4 MMT.

As of last week, there were no areas in WI under D3 conditions and just 16.67% in D2.

Minimal rains expected for upper Midwest, while lower corn belt and Delta may receive more precipitation. Dryness worries persist in northern Midwest despite recent rains.

Despite a bearish USDA report, technical signals suggest a long-term buy, with potential for further upside towards $106.57 - $116.05/cwt before seasonals wind down.

.....increased probabilities in Ontario, Quebec, northern Manitoba, and BC interior. Normal precipitation for most southern ag regions, drier bias in north.

USDA June Hogs & Pigs next week- June 29. Market is trading a tighter supply outlook both near term & longer term due to liquidation. Higher feed prices on account of drought = further liquidation.

More price increases & food inflation, a major concern during El Nino. Govt. output est. up to record 112.74 MMT vs 107.7 LY. Annual consumption @ 108 MMT.

https://www.reuters.com/markets/commodities/indias-wheat-output-10-lower-than-government-estimates-trade-body-2023-06-21/

SovEcon cut 23/24 Russian wheat harvest est, EU cuts in various regions, US drought expands, India crop lowered. Will wheat takeover leadership from corn?

Lower conditions (worse vs expected), & no drought busting rains forecasted with an expanding drought by end of week continues. Some "more" rain than earlier expected will keep volatility alive?

Corn harvest 37.5%, production 36 MMT (-30% Y/Y). Lowest number of trucks with soy & corn in at least 22 years seen at major grain ports!

While signaling more rate increases, they said they are not far away from target. Expect rate to top @ 5.6% this year, implying 2 more +0.25% hikes in 2023, up from last 5.1% est in March.

https://www.reuters.com/markets/currencies/dollar-droops-bets-build-fed-pause-yuan-6-mth-low-2023-06-14/

Insufficient recent rains, & in near-term forecast, will keep the premium intact. Fund buying is accelerating? New crop #corn futures aiming to break above the recent downtrend line.

Similarly, Soybeans 59% G-E vs LW 62% & expected 60%. Subsoil moisture short-V. short up +3% to 47%, Topsoil moisture S-VS up +2% to 46%. Both supportive of higher futures.

Jan-April pork export vol up +14%, valued $2.62 billion (up +13%).

Beef export vol -10% Y/Y, value -18%. Jan-April export vol down -8% & -21% value ($3.21 billion) vs last year’s record pace.

NOAA expects influence on US to be weak in summer but more in late-fall thru spring. By winter, 84% chance of moderate++ strength & 56% of strong El Nino.

https://www.cnbc.com/2023/06/08/el-nino-is-here-and-could-bring-warmer-temperatures-extreme-weather.html

Government is trying to boost Rice production during slow monsoon season. Purchasing price of new-season rice raised +7%, highest increase in 5 years!

ECB topsoil 67% short-V. short vs LWs 47% & early April’s 6%.
US subsoil 44% vs 37% LW & early April’s 33%. ECB 57% vs LW’s 39% & early April’s 11%.
MI continues to struggle the most!

ABARES projected 2023/24 winter canola production at 4.9 MMT, off -41% Y/Y but still above the 10-year average! Is dry weather taking on a global significance in 2023, impacting Ag in multiple geographies?

This week's crush data showed meal inventories in April were largest since May 2021. But US meal export demand has been strong due to Argentina's dire bean crop situation his year.

.....while trade weighed merits of US Fed possibly skipping a rate hike in June. Payrolls up 339K in May vs 190K forecast, & following +253K rise in April.

https://www.cnbc.com/2023/06/02/dollar-sags-as-fed-bets-ebb-debt-bill-passes-aussie-soars.html

Not enough moisture for the young 2023 crops. Today's mid-day runs tilted drier for the "I" states & next week's market open will be weather inspired!

Drought continues to bake US cattle country as grazing supply dries up with no real improvement in outlook, accelerating cattle contraction.

Jeopardy rising. N0 rain in the 10-day forecast. Iowa City temps hitting near record highs, not seen since 1934! ECB topsoil 47% short/very short!

Will export demand suffer without the Chinese market, especially as they continue to try & shift purchasing Ag away from US?

https://www.nbcnews.com/news/world/china-covid-second-wave-xbb-variant-omicron-rcna86171

.....that China's economy continues to stumble out of the gate, post-Covid.

https://financialpost.com/commodities/mining/copper-price-plunge-china-economic-growth

ECB conditions worse in top crop producing states MN, IA, IL, IN & NE! Soil moisture concerns mean that June & July rains are critical. Spark for higher prices? Comparisons to 2012...

Drought weighed but limited disease. The N/E yields will not offset lower S/W yields on Day 2. Yields/abandoned acres will be lower than USDA. Next stop $10.00/bu.

.....as US Fed holds interest rates higher for longer before they start to pivot lower.
Risk of US default over debt ceiling higher vs. prior stand-offs.

.....the latest sign of uncertainty around China’s economic recovery.

92 million corn looks high! Minnesota also lags due to heavy weekend rains soys at 10%. Farmers eye potential replanting in June before conditions dry up.

Some regions even facing D2 severity! Most of Saskatchewan is dry as well. Manitoba not that far behind.

The beef industry feels the heat too, as 1/3 of beef cows graze in TX, OK, NE, and KS with 37% of pastureland rated P-VP. Central Missouri now in D3!

It is unlikely to bring heavy rains to Argentina Ag area before Sept & the drought-hit soil will likely see slow recovery.

https://www.reuters.com/business/environment/more-than-90-chance-el-nio-through-winter-says-us-cpc-2023-05-11/

It caused shut in of 319,000+ barrels of oil/day (3.7% of Canada's production). 88 wildfires were burning across Alberta, with 24 out of control. Ag affected too.

https://www.cbc.ca/news/canada/edmonton/farmers-rush-to-save-livestock-as-wildfires-rip-through-alberta-1.6834470

Canada’s April CPI data is set to be released on May 16th after a decline to 4.3% in March. Great news for the stock market, as concerns of higher inflation hindering economic growth ease up.

Supportive for both canola & spring wheat futures as Canadian central Prairies expected to get very little over next 10 days.

.....& sustained its stellar rally driven by bets for pause in US #Fed rate hikes. Spot climbed to $2,072.19, shy of record $2,072.49. https://cnbc.com/2023/05/04/gold-hovers-near-record-high-levels-as-fed-hints-rate-hike-pause.html

Reports of drone attack on Kremlin that threatens to escalate ongoing fighting between Russia & Ukraine and further jeopardize the impending Black Sea grain corridor deal extension.

.....projects Asia-Pacific GDP to expand +4.6% in '23 after +3.8% in '22, & to be the most dynamic of the major global regions. What recession?

https://www.cnbc.com/2023/05/01/imf-asia-outlook-china-india.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail

No deal yet. Recently, global crude oil traders sought payments in other currencies. Western sanctions on Russia & shortage of US$ weigh!

Fundamentals, led by drought on the Plains, supporting fund length. No renewal of Black Sea Grain Initiative also tightening global stocks- more talks scheduled.....

Slumping inventories & drop in pvt. investment held back early year gains. Inflation higher vs expected. IMF forecasting +1.6% growth in 23. But big tech stocks +34%, NASDAQ +14%, & S&P500 +6%, what recession?

2023 Farms.com Risk Management Ontario survey estimated intended corn acres at NEW RECORD 2.277 mil, soybean 2.95 mil, & All wheat 1.168 mil. Stats Canada reported acreage intentions for the province very close to those estimates.

As is the trend, futures response to the report could see another 2 days (at least) of upside?

Soy oil was also pressured by weaker global veg oil & crude oil. Macro recessionary fears attacking all markets! A $2.4- $3 discount in Brazil soybeans an anchor as well.

Take the over on this number but spring weather outlook may have shaved some acres? All wheat @ 26.3 mil vs 22's 25.38- take the over on spring wheat?

.....from low of USDA March planting intentions report to summer high of $1.05/bu and it works 14 out of 15 years? Summer 23 high could be $9.50 - $10.00/bu.

89-yr drought cycle is alive & well but when will it hit I-States? Could happen next 3-5 yrs as Mother Nature repeats but does not necessarily rhyme.

But are these lower prices on borrowed time as they may have bottomed. Would not be surprised if US natural gas prices trade back above $4.00 by summer?

China’s economy grew by faster-than-expected 4.5% in Q1 while oil refinery throughput rose to record levels in March. https://cnbc.com/2023/04/18/oil-steady-as-markets-look-ahead-to-china-gdp-data.html

But the fundamentals need to turn higher soon. Domestic & export demand needs to come to the rescue like in the last 2-years!

We are not out of the woods yet & if China demand fails to pick up, crude prices could fall once again despite the OPEC cuts.

https://www.cnbc.com/2023/04/05/oil-edges-up-as-opec-cuts-us-inventories-brighten-outlook.html

S&P dropped -0.58% today, Dow off 200 points, & Nasdaq down -0.52%. But expect markets to pause & continue higher on resilient US economy?

https://www.cnbc.com/2023/04/03/stock-market-futures-open-to-close-news.html

KS G-E off -3% to 16% & P-VP up +3% to 57%. OK also dropped while TX steady-lower. Weather continues dry this week with temps warming to raise crop stress in some parts.

Friendly report as funds were fearful of more supplies. Lock for a hard bounce for futures (V-SHAPE BOTTOM) from oversold conditions! But Dec 2022 inventory revised +1.8%.

Oil prices supported by lower US crude stockpiles & halt to exports from Iraq’s Kurdistan region... 
https://cnbc.com/2023/03/30/oil-steadies-us-crude-draw-offset-by-russian-supplies-stronger-dollar.html

KC HRW broke above recent 5+ month downtrend yesterday. Chicago SRW & MN spring what also recovered in March.

Texas conditions improved, rest were off. HRW wheat weather in Southwestern Plains expected to continue to be dry/mostly dry for next 10 days.

With funds record short let the "short squeeze" begin! Look for a bounce back to mean/avg $848.7/MT the 200-day moving average in coming months.

But Russian sources then said govt. does not want to ban wheat exports but will try to ensure exporters pay farmers enough to cover avg production costs, supporting prices @ $275+/mt.

.....but 108 mil bu biz was gained from China in last 8 days! The reductions will stop & ending stocks could drop again?

.....following the discovery of an atypical case of mad cow disease earlier.

https://www.bloomberg.com/news/articles/2023-03-23/china-agrees-to-resume-brazilian-beef-imports-after-mad-cow-case#xj4y7vzkg

Inflation has fallen 7 out of past 8 months since reaching a high of 8.1% in June 2022. On the right track, interest rates have peaked with a pivot to lower rates by 2024. Hopefully US CPI is on the same track.

11.59 MMT from US vs 10.04 MMT prior. Brazil fell -36% to 2.24 MMT.

.....& fears of more bad banking news near-term? Biggest weekly rise in 4 months, & expectations rise for less aggressive US Fed interest rate hikes as it tries to rein in inflation.

On Feed 96%, as expected & same as prior month. Placements during Feb 93% vs expected 94% & prior 96%. Marketings 95% vs expected 96% & prior 104%.

HRW wheat areas continue to miss most of the noteworthy precip over the next 10 days.

This follows Friday's collapse of Silicon Valley Bank- the biggest failure since the 2008 financial crisis.

https://www.reuters.com/markets/rates-bonds/us-federal-reserve-governors-hold-closed-door-monday-2023-03-12/

.....most contracts saw levels not seen since July 2022. Argentina's corn crop downgrades are supportive but Brazil could offset?

Some recovery to start next week?

Rosario cut 22/23 soybeans to 27 MMT vs prior 34.5, corn by -7.5 to 35. Buenos Aires cut soy to 29 from 33.5, corn 37.5 from 41. USDA @ 33 & 40 resp. Crop conditions drop further.

Tight supply outlook & drought continue to provide support.

.....it is already priced in and Kansas wheat futures held the January lows, and funds too short Chicago.

Is this CRP acres on steroids?

https://www.pnas.org/doi/10.1073/pnas.2301355120

.....drones and other technology to help counter an expected Ukraine offensive later this year

https://www.wsj.com/articles/as-china-calls-for-peace-u-s-believes-beijing-is-mulling-artillery-and-drone-deliveries-to-moscow-aee2b62a

Too much moisture across Great Plains in 2nd week of forecast today? More snow for northern Plains & upper Midwest Saturday night & Sunday; follow up precip likely later next week.

.....in some of the Italian city’s smaller canals dropped because of unusually low tides. Mountains have very little snow.

https://www.cnbc.com/2023/02/24/gondolas-left-stranded-as-venices-canals-run-dry.html

.....western sanctions to be removed. But the peace plan imploded. Will the next shoe to drop be a nuclear flex?

https://news.sky.com/story/ukraine-war-china-unveils-12-point-peace-plan-as-it-calls-for-ceasefire-12818707

New low on the street! Will it drop to sub-30 MMT? They lowered corn to 41 MMT off -3.5 from 44.5 MMT (USDA @ 47). Argentina production has more downside risk.

Incredibly intelligent, highly elusive beast capable of surviving cold climates by tunneling under snow. Result of cross-breeding domestic pigs with wild boars.

https://www.theguardian.com/us-news/2023/feb/20/us-threat-canada-super-pig-boar

Last year, higher demand saved the industry's bacon!

Soy output low on the street is 34 mmt (Oil World), down from 55 mmt, but could we see sub-30? USDA still too high at 41. Arg + Brazil total soy much lower vs expected?

.....(biggest m/m PPI increase since early summer). US Fed on track for additional rate hikes of +25 bps in March, April & May? Gold set to fade some more?

.....become endemic for 1st time in some wild birds that transmit to poultry. It is now a year-round issue & record outbreaks cannot be solved quickly on farms

https://www.reuters.com/world/bird-flu-spreads-new-countries-threatens-non-stop-war-poultry-2023-02-15/

It was up by 6.4% in Jan Y/Y (more than expected) but down vs 6.5% in Dec. 7th straight month of cooling since peaking @ 9.1% in June. US Fed will want to see steeper easing?

Higher Matif wheat in 2022 drove Chicago prices higher. Is a short squeeze underway now? corn will also garner support from this.

Dairy products supply is growing across major exporters. Milk futures have been on a downtrend since peaking last spring, but are we bottom-forming?

.....(1.47 MMMT up +2% vs. prior record in '21, value $11.68 bil up 10% Y/Y). pork exports finished lower Y/Y but value 3rd biggest, only trailing highs from 2020 & 2021.

https://www.usmef.org/news-statistics/member-news-archive/2022-beef-exports-set-annual-records-strong-finish-for-pork-exports/

Canadian Quarterly Grain Stocks as of Dec. 31, 2022

(in MMT)	Stats Canada- Dec. 31, 2022	Trade Est.- Dec. 31, 2022	Stats Canada- Dec. 31, 2021	Y/Y Change
All Wheat	22.294	22.3	16.816	+32.58%
Durum	3.695	3.9	2.533	+45.87%
Wheat ex-Durum	18.599	N/A	14.283	+30.22%
Canola	11.356	11.7	8.786	+29.25%
Barley	5.072	4.5	3.152	+60.91%
Oats	3.591	3.6	1.882	90.81%
Corn	11.862	N/A	11.530	+2.88%
Soybeans	3.654	N/A	3.205	+14.01%
Peas	2.115	N/A	1.593	+32.77%
Flaxseed	0.454	N/A	0.253	+79.45%
Lentils	1.439	N/A	1.212	+18.73%
Rye	0.344	N/A	0.259	+32.82%

Source: Stats Canada, QTPlus

2nd season corn 12% planted of expected acres, lagging LY's 24%. If wet delay continues in the next 2 weeks, trendline corn yields in Brazil will not be possible!

.....although they did not expand any. Until profitability perks up, expansion is likely on hold, but drought volatility remains.... Feed demand to fall.

.....canola 11.7 vs 8.79 LY. Despite sharply higher Y/Y stock expectations, we could get a market surprise with lower than expected stocks, given strong demand?

US beef inventory 29.8 mil (lower vs 2014), new record low, off -4% Y/Y. Beef replacement heifer off -6% vs expected -3.5% drop. Milk heifer replacements off -2% vs expected +0.1% gain! Baked in?

In 2022, futures hit all-time high @ $8.11, & then fell -60% in 8 months. Demand for oats remains very strong & will continue in 23/24. Overdue bounce finally happening.

.....housebuilding demand dropped given very high interest rates. Futures nearing highest since Oct 2022, supported by tight supplies & likely demand recovery?

.....biggest EU-supplier Russian diesel. At stake is a renewed rise in oil prices, & commodities along with it?

https://www.ft.com/content/ea2ea6b2-00ce-4971-858c-bfb1b0f8be4c

Additional rain expected over the next 10 days, but mid-day model took some of the forecasted rain out. More consistent rain needed..... Brazil crops downgraded further.

.....limiting cattle into feedlots near-term. But weather will clear, so bottom is near? USDA 2023 Jan Cattle on Feed report- further herd reduction?

It sent tons of water into stratosphere, which could warm Earth. Some say we could exceed 1.5°C of global warming in next 5 yrs.

https://www.npr.org/2022/08/03/1115378385/tonga-volcano-stratosphere-water-warming

Anec said Brazilian supplies are needed after soy dollar program depleted local Arg stocks, & fears of the punishing drought reducing their soy production in 2023.

https://www.reuters.com/markets/commodities/brazil-making-atypical-soy-sales-argentina-anec-says-2023-01-12/

They increased 22/23 global #wheat output est to 796 MMT (new record supported by record Aussie crop!), up from their prior 791 MMT est.

Will tomorrow's USDA WASDE surprise & swing it in corn's favor? Trade estimates are in a wide range with the avg favoring the bears for now?

The bias heading into the Jan 12th Winter Wheat report is that USDA will release bearish data- bigger than expected acreage, but the range is wide, so someone will get surprised?

US Fed will rely on CPI updates (next one up on Thursday) to decide on further interest rate hikes. Inflation has been gradually tracking lower?

Severe US drought prompted herd liquidation, & need for feed is pushing cattle northward from the southern regions.

.....in Kansas, Montana, Nebraska & the Dakotas. Market attention shifts to next week's Jan WASDE & winter wheat seeding reports...

The new year started with sell pressure in grains but fundamentals should take over longer-term.

Drought & herd reduction weighs on supply. Meat demand will hold up in 2023 even as global supply of meat continues to shrink?

Nov daily crush rate 6.31 mil bu/day, close to Oct 6.34 mil bu/day.

Late frosts & ongoing severe drought caused Buenos Aires Grain Exchange to cut crop to 12.4 MMT vs. initial 20.5 MMT seen at beginning of season.

Corn off -2% wk/wk to 15% G-E; P-VP up +3% to 26% (LY 76% G-E & 1% P-VP).
Soybeans off a steep -7% wk/wk to 12% G-E; P-VP up +5% to 25% (LY 73% G-E & 4% P-VP).
Drought expanding in southern Brazil!

Tighter feeder supplies still impact the market. Extreme cold in cattle regions, in western Midwest, US Plains & western Canada, fuel livestock stress & impacts producers' marketing plans.

Pork bellies up +35% m/m & up +116% Y/Y @ 54.359 mil lbs.
Beef up +2% m/m & up +6% Y/Y @ 521.869 mil lbs.
Total red meat down -4% m/m but up +10% Y/Y.

.....weighing on gasoline & all crude products as well. China is the wildcard & if & when they reopen for business, crude could trade back to $100 in 2023?

.....& second biggest exporter US business. La Nina continues & South American cropping not out of the woods, tightening 2023 global supplies. This is just the start of the 2022/23 weather scare in South America!

.....on Friday with lower corn exports. We could see reductions in the Argentina crops?

Barley oats higher, corn slightly lower, soybeans as expected.

Stats Canada 2022 Dec. Grain Production Report

Source: Stats Canada, QTPlus

.....despite US Fed's aggressive interest rate hikes to tackle inflation. But a lower US$ is friendly future export pace.

.....leading the grains complex. Some China easing of zero COVID policy & continued Argentina crop concerns support.

.....corn slightly lower, soybeans & oats steady. Canola though could come in lower based on Prairie provinces' yield est?

Geopolitics taking over from demand-supply fundamentals! Heating oil tracking crude lower on demand destruction near-term?

..... to encourage farmer sales of old crop soybeans held as inflationary hedge. Headwinds once again for US sales that dominate seasonally at this time ahead of Brazil's new crop availability.

This tops the previous record of 50.5 mil in 2015. Meat supply tightened, raising demand for pork, beef, lamb?

https://www.reuters.com/business/healthcare-pharmaceuticals/avian-flu-outbreak-wipes-out-5054-mln-us-birds-record-2022-11-24/

Cases surged to new record forcing Govt to curb movement & delay recovery in 2nd biggest global Crude Oil importer. IMF says China needs to keep recalibrating COVID Zero strategy. Bearish crude oil near-term!

72% of Prairie abnormally dry/in drought (including 80% Ag land) @ end-Oct, up vs 70% prior. Temps higher than average. Many wary of planting winter wheat on dry soil.

.....due to concern over lower demand in China, stronger US$, & US supply availability. Baker Hughes raised US rig count +3 to 782, up +219 Y/Y.

Nearby futures has failed to break above 100 DMA in 6 attempts in past year only to resume downtrend & trade to new lows! Seasonal high in Oct. & weakens in Nov.? We will flirt with $0.68-$0.70 by year-end?

Chinese refiners already began slowing down Russian oil imports from next month. Reduced buying by the Asian giants would leave Russia chasing, & depressing prices?

https://www.reuters.com/business/energy/indian-refiners-becoming-wary-buying-russian-oil-eu-sanctions-loom-sources-2022-11-16/

.....during war with Ukraine. 2 people were killed in explosion in eastern Polish village, Warsaw held emergency meeting.

https://www.theguardian.com/world/2022/nov/15/stray-russian-missiles-feared-landed-poland-ukraine

.....to remove obstacles for Russian grain & fertilizer export, & lifting sanctions on Russian banks & allowing freight insurance at normal rates?

https://www.ft.com/content/85ffe3ea-c713-4c0d-8b6d-80da3c328c1f

.....peak in shelter inflation & slower wage growth. They expect core personal consumption expenditure (PCE) falling to 2.9% by Dec 2023 from 5.1% now.

https://www.reuters.com/markets/us/goldman-sachs-expects-significant-decline-us-inflation-2023-2022-11-14/

.....pressuring poorest countries more, who likely imported less food. World food prices soared to record levels this year.

https://www.fao.org/newsroom/detail/FAO-Food-Outlook-highlights-rising-food-import-bills/en

.....with a transition to ENSO-neutral favoured in February-April 2023, 57% chance (up from 54%). So, 75% chance that South America could get a crop weather scare in 2023?

.....on better export news (#China is back to buying) & record crush margins. There is no room for errors, Brazil remains a wildcard but its still too early.

Soybeans, corn, beef, & dairy sales lead the way, with top markets being China, Canada, Mexico, Japan, EU, South Korea. Tremendous demand continues!

After topping in late Sept, it broke below its old resistance/now new support @ $110. But US CPI on Thursday @ better than expected +7.9% could see the global reserve currency reverse course once again!

But recessionary fears & demand destruction concerns remain headwinds. Futures are creeping out of oversold territory after falling 46% from peak in May!

Yara said it was now operating at 65% of European ammonia capacity (it had cut output to just over 1/3 of total capacity for much of second half of the year).

.....U.S. Fed continues aggressive rate-hikes. Support provided by recent bullish EIA inventory draw & tight stocks.

.....71% soybean area, 70% corn, 74% winter wheat & 75% spring wheat. Very concerning- ECB getting too dry since Aug 1, farmers reporting dust & little moisture 3 feet into ground.

Has the commodity currency bottomed for now and the U.S. $ Index peaked? US Fed likely to follow suit sooner rather than later?

Brazil cane harvest delayed in center-south. But sugar market expected to be well supplied next year. Global macro concerns weigh as well.

More earnings data to be released...

Conducive weather in major producer Brazil provides excellent conditions for crop flowering. Brazil Arabica coffee exports in Sept. up +18% Y/Y.

But US Fed could now get more aggressive with future interest rate hikes & keep rates higher until price increases cool of...

https://www.cnbc.com/2022/10/12/stock-futures-are-up-as-investors-await-inflation-data.html

.....demand concerns remain in a recessionary scenario. RBC says it could fall to $60/barrel next year in the most bearish demand destruction scenario...

Ending stocks could drop even lower in upcoming USDA updates?

.....hinders West's attempt to cap Russia prices. Next OPEC meeting set for December, to determine next adjustment.

https://www.reuters.com/business/energy/opec-heads-deep-supply-cuts-clash-with-us-2022-10-04/

Grazing on pastures expected to be lower vs. prior years. Future beef demand concerns weigh due to high interest rates, energy costs & inflation.

Palm oil & Soybean oil recovery continues. Strong Canadian crush margins & price-competitive exports, including China business, support.

Most of the cut in corn was from lower expected US production at 354.2 MMT vs prior 364.7 MMT.

Some forecasting a 30-40% drop vs. 2022? European Matif wheat futures up 16% since hitting a low on Aug 18, 2022.

Core inflation (ex-food & energy) fell to 5.2%. Some relief for Bank of Canada (which raised interest rates 3% thus far this year)?

Downward sloping downtrend creates new lows & lower highs. US Fed expected to raise interest rates by 75bps this week (if not more?). More US$ strength = lower CDN$ & higher basis.

High temps for parts of Midwest & S. Plains support cooling demand. La Nina winter deep freeze could raise heating demand, supporting gas prices? Soaring LNG could take fertilizer prices up as well.

Including corn, feed remains elevated. If China returns to buying from US, add more risk premium? South American production also at risk with 3rd straight La Nina?

Up 15+% this year, it is crushing the #euro & #yen to 2-decade lows & #pound to lowest in ~40 years.

Tighter monetary policies to tame inflation hurt energy consumption outlook. Hit lowest since January earlier this month.

US Fed committed to interest rate hikes (Bank of Canada too). Lower CDN$ is supportive for Canadian Ag basis...

US$ strength a headwind. Stats Canada #wheat production est. was higher vs expectations & prior est.

.....along with all wheat & barley. Despite tighter inventories, veg oil/palm oil weakness weighs on canola.

All wheat, barley, oats, soybeans & corn higher vs prior. All Prairie crops significantly higher vs last year's drought disaster!

At current stage in growing season, soybeans will benefit more (vs corn) from conducive weather. Buy corn, sell soy!

This follows China's halt on meat shipments from 2 other US plants in the past month, citing the presence of ractopamine.

https://www.bloomberg.com/news/articles/2022-08-29/china-halts-some-meats-imports-from-u-s-processor-tyson-foods#xj4y7vzkg

.....but lower vs expected for canola, barley & oats. All much higher Y/Y after last year’s western Canadian drought disaster.

US Fed says aggressive rate hikes on the cards to cool inflation. Recent higher job openings data suggests economy is strong despite 2 straight quarterly GDP drops.

This will be the 3rd time that La Nina has continued for 3 years in a row in ~70 years of records! 3 consecutive La Ninas happened in 1973-76 & 1998-2001.

Next year ~50 US counties (8 mil people) expected to experience temps 125+ F. 30 years later, extreme temps will be experienced in 1000+ counties (108 mil) mostly in South & Midwest. TX & FL will bear brunt of climate change, + Midwest.

https://www.cnbc.com/2022/08/15/south-midwest-will-see-worst-increases-in-extreme-heat-by-2053.html

Rain along valley fell 30% in July & Aug is ~60% lower. Temps soar & expected to last another couple weeks, they will pump water & look to seed clouds.

https://www.reuters.com/world/china/chinas-yangtze-river-shrinks-heatwave-drought-threaten-crops-2022-08-15/

NOAA says TX had warmest spring-summer, Oklahoma July was 4th warmest. KS July in top 20%. US 76.4F was 3rd warmest. '23 wheat planting in jeopardy as 3rd consecutive La Nina takes hold?

https://www.dtnpf.com/agriculture/web/ag/blogs/ag-weather-forum/blog-post/2022/08/11/continued-la-nina-unfavorable-wheat?referrer=NLSnapshot

Production 12.6 mil bales, lowest since 09/10, high abandonment in Southwest. Carryout 600,000 bales lower, 12.6% stock/use ratio -8% lower Y/Y & lowest since 1924/25!

Worsening drought & successive heatwaves in France, Romania & Hungary strained crop during crucial summer growth. Will they import US corn?

2014 high of $118.35/cwt was on July 7! Marketing hole ahead? Oct could narrow discount next Monday as it remains wide historically. This despite recession fears, given elastic meat demand.

.....but it remains +13.1% higher Y/Y. Steep drop in veg oil & cereal, while sugar, dairy & meat also fell some.

UK's grim economic outlook also pushing some safe-haven buying as Bank of England raised interest rate by +0.5%, largest since 1995?

Phase 1 deal was likely already dead, now it's surely buried? Demand will be a problem moving forward, especially into 2023 without China? Who will replace them?

Job openings fell most in 2+ years in June as labour demand eased in retail & wholesale, but labour market remains tight, hence more rate hikes likely.

.....off 0.4% & 0.7% vs April forecast. World Bank in June cut 2022 global growth to 2.9% vs earlier est. 4.1% due to similar macroeconomic pressures.

Furthermore, OPEC+ to raise output by 100,000 barrels a day in September. More proof that inflation trade is unwinding into recession trade?

.....mostly due to increased China import demand as domestic prices climb. ASF, inflation & global growth concerns are still risks to meat demand.

Midwest will face dryness & excessive heat? Bullseye on Iowa. Drought Monitor showed dry conditions form west & south rapidly spreading east.

USDA is @ 51.0 bpa. Strong crop in the making but still 6 weeks left before harvest- all will be weather-watching!

US crude is @ big discount vs international Brent. US crude stocks dropped 4.5 mil barrels (vs expected 1 mil drop) last week to 422.1 mil.

60% (& rising) of cattle in drought area. 50% of pastures in P-VP condition. 2022 so far, #beef cow slaughter highest since 1996- 2nd lowest beef cow herd in 50 yrs!

They increased 22/23 global wheat production to 770 MMT, up +1 MMT vs prior outlook.

DB runs trains with aid cargoes to Ukraine, & now will load grain on return journey.

https://www.reuters.com/world/europe/germanys-deutsche-bahn-plans-trains-ukraines-grain-exports-2022-07-21/

.....above 0.7 mil bpd after export restrictions lifted in recent days- expected to return to 1.2 mil bpd in a week/10 days.

https://www.bnnbloomberg.ca/oil-slumps-with-stuttering-u-s-fuel-demand-libya-ramp-up-1.1794771

This despite milk supplies remaining tight worldwide. Global Dairy Trade price index fell -5%, now lowest since Sept 7, 2021 auction.

This despite Bank of Canada raising interest rates by a historic full percentage point yesterday to fight inflation. US$ Index continues march higher, testing 1.09, & is a headwind.

Central banks are resorting to steep interest rate hikes to rein in runaway inflation, and the tighter monetary policy in turn weighs on growth prospects...

USDA raised 2022 & 23 US beef export prospects as demand strengthens. 2022 average US cattle price expectations also raised. Livestock futures generally buoyant.

Look for US Fed to follow suit at their July meeting? US CPI @ 4 decade high 9.1% vs 8.8% expected & 8.6% prior.

Following the volatility of last 24 months or so, with record spikes & steep corrections, do we see a more stable market ahead?

.....exports unchanged at 75.23 MMT. Total corn production increased from 115.22 MMT to 115.66 (USDA @ 116), exports increased from 37 MMT to 37.5.

.....exports unchanged at 75.23 MMT. Total corn production increased from 115.22 MMT to 115.66 (USDA @ 116), exports increased from 37 MMT to 37.5.

Crisis due to 3 yrs of drought & warmer temps. & this year, crop seeding reduced due to high input costs!

https://www.cnbc.com/2022/07/05/italy-declared-a-state-of-emergency-because-of-drought-in-the-po-river.html

.....as all run for cover on recession fears. Covid-19, Russia-Ukraine conflict (black swan events), inflation push world further into uncharted territory?

Weather takes back seat at the moment for prices...

June 2022 Canadian crop areas (Mil Acres)

Source: Statistics Canada, QTPlus

.....(their longest river), doing more damage to crops hit by an early summer #heatwave; makes irrigation impossible.

https://news.sky.com/story/italy-looming-agricultural-catastrophe-as-saltwater-from-adriatic-damages-crops-12642432

57% of topsoil is rated adequate-surplus vs 75% mid-June & 59% LY. Subsoil is 59% adequate-surplus vs 72% mid-June & same level LY.

What a wild ride! End of month, end of quarter, margin calls and expiration all played a role. It appears to be pricing in reduced demand due to anticipated economic slowdown.

Worsening crop progress + bullish crop reports + return to extreme heat = potential 2022 summer "melt up"?

.....; it was the first to peak, first to fall & now bottom. Look for a similar pattern in all other grain markets. If "flash drought" in July verifies, corn will become the leader!

This would create more demand? But we need more global supplies! Saudi Arabia is increasing monthly supplies, next OPEC meeting June 30th.

Add wheat market drop, & global food inflation eases some? But we are in weather markets & with summer ahead, concerns linger...

https://www.bloomberg.com/news/articles/2022-06-21/global-food-inflation-gets-reprieve-as-wheat-to-palm-oil-tumble

.....& 90s in Canada's E. Prairies. Extreme 105-110F possible in parts of Central Plains. Week 2 keeps high pressure ridge in Great Plains.

Just adds to their export handicap, on top of Russia reportedly seizing their grains & controlling ports.

https://www.reuters.com/markets/commodities/ukraine-says-24-million-hectares-winter-crops-wont-be-harvested-because-war-2022-06-15/

Are they too high on corn acres after the wet, cool & late N. Plains planting season, including Ohio, & given high input prices?

May US inflation @ new 40-year high 8.6%. Crypto crashes as Bitcoin @ 18-month low. Recession fears L-T support at 3700.

Sentiment also fouled by more (possible) China zero-COVID lockdowns and/or big US Fed rate increase this week?

US largest orange grower Florida under hurricane & citrus greening disease pressure. Also, drought hit biggest producer Brazil, tightening global supplies!

.....& no seed! Total 13.7 mil acres left to plant as of June 1. No bumper crop? Higher prices? Stocks reman tight!

2022 Western Canadian Crop Acreage Left to Be Planted As of June 1

Source: Provincial Government Data

Even with lower consumption, global grain ending stocks remain tight. Global soybean output expected to rise +11% Y/Y.

What next? Can't write this story if we tried!

https://www.reuters.com/world/russias-un-envoy-storms-out-ukraine-meeting-over-european-statement-2022-06-06/

For '21, 18.84 bil vs expected 18.8. '20 @ 17.13 vs expected 17.1. Plan to deny 69 small refiner waiver petitions very supportive corn for a change!

.....unlike 2008, with new normal at $100/barrel? Saudi could suspend Russia from OPEC+ due to sanctions related to Ukraine war.

Research facility near Ukraine seed bank was damaged. Both are in Kharkiv, which Russia has bombed.

https://www.reuters.com/world/europe/ukraines-giant-seed-bank-risk-being-lost-war-rages-2022-05-31/