BQC Morning Comments For Aug 13.24

Macroeconomics: The Producer Price Index report came in lighter than expected. PPI only coming in at 0.1%, putting pressure on the dollar. The Japanese carry trade is mostly unwound, but some are still concerned there may be more more issues surrounding the currency leverage. Iran watch is still on everyone’s radar.

Ag Fundamentals: Record bean crop on the table, yields set yesterday by the USDA at 53.2 bpa. we have received plenty of supporting rains recently and there is little concern for the rest of the growing season. Looking for support in December corn. if we can close today above 3.99 we can start talking about a key reversal and a possible short term low. The possibility of this year’s corn crop getting bigger from here is not off the table.  USDA lowering acres helped soften the blow of a +183 bu yield, but it is possible for production numbers to increase from here. It is easy to come up with bearish news with such a large global supply, but with prices dropping lower exporters are optimistic that export demand will improve.

Weather:  The last 3 days of precip fell in central Kansas, northern Missouri and parts of southern Iowa. Oklahoma got hit with some healthy rain storms as well hitting some cotton country and leaking into western Arkansas. Kansas getting hit with rains this morning which will move through Missouri and finish up in Southern Illinois by Wednesday. The northern plains will see rain later today starting in south Dakota and working its way through parts of north Dakota and Minnesota by Wednesday evening.  Keeping an eye on Tropical storm “Ernesto” over the Lesser Antilles, models do not expect this storm to threaten the gulf.