BQC Morning Comments For Aug 20.24

Macroeconomics: Canada will have a rough week if an agreement does not come to fruition between the two major railways (Canadian National Railway and Canadian Pacific Kansas City) and the Teamsters Union. Union strikes will begin on Thursday this week and will potentially cause losses of over $700M per day. Doubts of Trudeau stepping in to help ink a deal lead many to believe a deal will not be signed in time. The most recent offer by the Union is still leaving a huge gap between the two negotiating sides. The Canadian dollar has rallied recently against the US dollar, but we could see that exchange rate pivot with the developments the rest of the week.

Ag Fundamentals: The Pro Farmer Crop tour released its corn and soybean yield estimates for South Dakota yesterday. They estimate corn at 156.5 bushels per acre vs.157.4 bpa in SD during last year’s tour. Soybean pod counts in South Dakota were slightly higher, up 1% compared to last years Pro Farmer. estimate. The USDA, in comparison, had shown higher optimism for the South Dakota bean crop in their most recent yield estimate of 47 bushels per acre. The eastern leg began in Ohio and the results are suggesting a relatively unchanged corn yield in that area, at 183.3 bushels per acre. The USDA has Ohio plugged in for a 10 bpa yield loss year over year on corn so it will be interesting to see how opinions change between now and harvest. Today the Pro Farmer tour will hit the rest of Nebraska on the western side and will finish working through Indiana and get into eastern Illinois on the east side.

Weather: Storms are rolling through South Dakota and eastern Nebraska this morning. dryness is expected in the eastern portion of the Midwest for the next 10 days. The lower Mississippi river gauge is inching lower each day.  Memphis south needs a splash of rain in the Ohio river valley in order to receive relief and it is not in the forecast in the next 10-12 days. The River gauge at Memphis is currently at -1 foot and dropping to -5 feet by the end of the month. River facilities in that area start to run into loading issues around -8 ft to -10 ft on the gauge. This would be the third year in a row the mid south farmer has run into this low water issue.