Written Commentary
MORNING COMMENTS
Geopolitics:
Israel sent 100 warplanes over Jordan airspace into Iran and dropped explosives on Iranian missile, drone and military sites. The attack resulted with a death of 4 Iranian soldiers. Iran made a statement shortly after saying that their nuclear and oi production was not effected. Crude oil values are down $4-5 per barrel this morning on the news (currently $67.23/barrel).
Macroeconomics:
I mentioned in Friday’s afternoon comments that this week’s earning reports are expected to be important for the equity market and could cause volatility depending on the Q3 results. 5 of the “Mag 7” companies will report between tomorrow and Thursday. We also have the JOLTS job report coming out tomorrow at 10am, unemployment claims on Thursday and payroll wages on Friday. All reports regarding the labor market are important influences for the Fed’s decision that will be announced on Thursday next week. The markets odds are still heavily in favor of a 25 basis point cut to Federal interest rate.
Ag Fundamentals:
Crop progress report last week had corn at 65% harvested and beans at 81% done. Some rains over the last 4-5 days slowed pace slightly, but I imagine beans are between 90-95% harvested and corn has probably progressed 15% to +80% harvested. The COT reports on Friday were mixed, but the most significant move was the increased short position in soybeans for managed money. Changes week over week to the disaggregated futures and options can be seen below.
Weather:
Light rains expected in the northern plains tomorrow through Wednesday, hitting parts ND, SD and MN with less than 1 inch. Wednesday into Thursday rains will scatter across Iowa, northern Missouri and into Illinois and Wisconsin. Looks like we may have a light jog across the finish line after an all out sprint harvest.
Friday’s Commitment of Traders Report showed managed money covering shorts in corn, KC wheat, and canola. They increased long positions in Soymeal and Soyoil and increased short positions in Soybeans, Chicago wheat and Minneapolis wheat.
Export & World News
Iran is believed to have bought about 120K MT of animal feed corn in an international tender. Indonesia (500K MT), Bangladesh (50K MT) and Mauritius (4K MT) are all looking to purchase rice tenders.
Malaysian palm oil futures were down 6 ringgit overnight, at 4530.
Chinese Dalian futures soybeans are all lower this morning.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
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