Geopolitics:
Poland scrambled jets yesterday in response to a “Russian drone strike” on the city of Lviv. Lviv is hundreds of miles west of the front lines of this conflict and the airspace activity has had the foreign minister of Poland Radoslaw Sikorski concerned for weeks. This drone strike was only 70 miles from the Polish boarder. To put this strike in perspective, there is less distance between the incident and Poland’s boarder than the distance between Grand Forks, ND and Fargo, ND. Poland is a NATO member and Polish representatives have asked NATO Secretary General Jens Stoltenberg for permission to better defend airspace near their boarder against Russian attacks. NATO’s Stoltenberg rejected the proposal stating it would risk NATO “becoming part of the conflict”.
Macroeconomics:
One of the most anticipated economic reports of the year will be released tomorrow at 7:30am CST. Wall Street is expected non-farm payrolls to increase by 161K and the unemployment rate to slightly decline to 4.2% for the month of August. Over the last month we have seen signs of a weakening tone regarding US labor. This report comes in the midst of past job reports being revised lower, the JOLTS job opening report coming in lower than expected and the lowest number since 2021, the ADP survey seeing the lowest employment change to the private sector since 2021, inflation continuing and wages remaining stagnant. Everyone knows Powell is looking closely at this report tomorrow and it could sway the Fed’s upcoming rate cut decision on September 18th. Right now the market is expecting a 0.25 pt cut and a 0.50 pt cut has a 50% chance of coming to fruition.
Ag Fundamentals:
Beans closed higher today with support from the third flash export sale of the week. Today’s 126K MT soybean sale was to China. In addition, beans are supported with continued fear of dry conditions in Brazil causing a slower start to their planting season. December corn did bounce off the 50-day moving average and may hold that line as support moving forward depending on yield reports over the next few weeks. Ukraine is in the middle of their wheat planting season and they are experiencing low soil moisture levels due to a recent dry season.
Weather:
Mostly clear across the US growing regions today. Wisconsin has a storm front moving across the center of the state today, and southern Louisiana is seeing rain blow up from the gulf. Rains from developing tropical storms are not expected to reach areas of the Mississippi that are in low water trouble. Expect chillier temperatures this weekend, dropping max temps to the mid 60s. Temperatures should then warm up again to the mid 80s by Tuesday next week. There is a slight chance of frost occurring in northern Wisconsin on Saturday night, but the rest of the country should steer clear of early frost. |
