AM Comments November 27 2024
Good morning. Futures markets in Chicago are again mixed in the overnight trading session with the wheat market lower and soybeans higher; as has been the case all week, corn is again a follower and not a leader, caught in between the two. The dollar index is continuing its downward slide into day three, which on the margin should help commodity prices in general throughout the day on Wednesday, while otherwise we expect a light/choppy holiday-like trading session, with risk-off potentially being the big theme for today and Friday. Corn futures this morning are trading around a penny higher, soybean futures are up 3-5 cents, and the Chicago wheat market is down 3-4 cents. Products are mixed, soybean meal is around $1/ton higher and soybean oil is down 40-50 points. Outside markets are mixed also, crude oil futures are up 30-40 cents/bbl, the Dow Jones index is up 20 points, and the US$ index is down 50-60 points. The S&P500 is down 5 points and the NASDAQ is down 40 points.
Today's Reports: Monthly Durable Goods; Weekly Jobless Claims; PCE Inflation; Q3 GDP Revision; EIA Weekly Ethanol Production/Energy Stocks
- This morning's weekly ethanol production report for the week ending November 22nd is expected to show production in a range of 1.095-1.116 mil bbls, while stocks are seen in a range of 21.963-22.663 mil bbls.
- Customs data from the European Commission show EU soft wheat exports in the current season that started July 1 at 9.2 mmt's as of November 24th, compared to 13.1 mmt's last year. The commission continues to note that data is incomplete for a number of countries, with Bulgaria and Ireland's figures being incomplete since the start of the 2023/24 marketing year.
- South Africa's Dept. of Agriculture has announced it will be issuing import permits for genetically modified white and yellow corn from the US as drought caused a more than 20% drop in production in the current season. Sources think the country could import up to 800k mt's of corn from all destinations in the season that runs through April.
- Biggest headline news overnight for Wednesday is a report that Israel and Lebanon's Hezbollah militant group had reached agreement on a 60-day ceasefire beginning first thing this morning. Note that no agreement has been made with Hamas, as fighting in the Gaza Strip between them and Israel continues to drag on.
- Minutes from the November FOMC meeting, released yesterday afternoon, showed policymakers were rather divided on whether further rate cuts were needed going forward, which gave economists little insight into what may happen once Trump takes office in January. The CME's FedWatch tool this morning is showing a 66.5% chance of a quarter point rate cut in the December meeting.
- Economists see headline inflation in today's PCE report coming in at 2.3%, which would be up from last month's 2.1% reading. Core inflation is seen ticking up to 2.8% on annual basis from 2.7% previously. Also out on Wednesday will be revised GDP data for Q3, which is expected to show growth in the economy slowing to 2.8%, down from 3% last month.
- Winter weather arrived in Colorado and Utah yesterday, with snowfall totals at elevation reaching 10+" in some places. Lower lying areas saw a dusting to an inch north and west into Idaho and Utah. Parts of MI/WI around the Great Lakes also saw accumulating snowfall on Tuesday.
- Forecasts through the rest of the week and into the weekend are again mostly unchanged; the eastern part of the country has nearly daily chances at light/scattered precip beginning today and lasting through the first part of next week, while the rest of the country will see several days of mostly dry weather.
- Week-two forecasts are mostly unchanged again also, as areas in the far north into Canada and also in the far south along the Gulf are the only spots with above average precip chances in the week beginning December 4th; the west coast has the biggest dry bias.
- Temperature forecasts into next week have the most extreme of the cold air staying slightly further north than what was seen previously this week, but there will still be a noticeable drop-off in temps beginning today and lasting into the weekend. Cool temps appear to bottom on Sunday/Monday, with highs through much of the Midwest in the teens and twenties in the north, and in the 20's/30's in the south, but will remain well below average through next week.
- As a reminder, there will be no markets at the CBOT tonight (Wednesday night), tomorrow (Thursday), or Thursday night, with trade resuming for a half day session at 8:30am central time on Friday; ag markets then close for the weekend at 12:05pm and will reopen at their regular time on Sunday night. Have a good Thanksgiving holiday!!!