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BQC Morning Comments Sept 6.24

September 6, 2024
Joe Mauck
@TradewithAFS

MORNING COMMENTS

Geopolitics:

The US presidential election is in a dead heat with 2 months until we have clarity. Election day is set for Tuesday November 5th and there will be a Fed meeting two days after on Thursday November 7th. That should be an exciting week for the markets!

Macroeconomics:

Nonfarm payrolls were reported down -19K from the forecasted number, at 142K payrolls. Wall Street was expecting a growth of 161K nonfarm payrolls and an unemployment rate of 4.2%. Hourly earnings were better than expected coming in at 04% increase, better than last month’s 0.2%. The US dollar reacted down immediately following the report, Dow and S&P 500 reacted higher on the news but still holding negative. Treasury yields were also lower. The market seemed to have expected worse based on the last week of revisions and the last couple months seeing a dwindling labor market. The Bureau of labor Statistics cut June and July’s jobs by a total of 86K jobs. They may need to recalibrate their estimator so that they don’t have to constantly revise lower every month

Ag Fundamentals:

The USDA is reporting their monthly WASDE on Thursday September 12th next week. The southern states are in the heart of harvest and we are seeing combines starting roll as far north as Kentucky, southern Illinois and Missouri. The last 6 weeks of heat and dry weather in some areas have pulled back yields slightly, but these are not the growing areas that have huge weight in regards to the USDA’s estimates. The River in Memphis is still below -6 feet and barge freight values have ticked higher in last half of September knowing that the rain is not expected to come in the next two weeks.

Weather:

Texas and the southeast received all the rain in the last 72 hours and that pattern is expected to continue. Rain storms are leaking up from the gulf into Louisiana, Mississippi, and Alabama today. This storm is not expected to solve many low river issues and may cause a slow down in harvest pace for those states. We will have a brief cool down across the Midwest amp over the weekend. expecting lows of 34 degrees in northern Minnesota. Temps will return to the mid-80s by Tuesday next week. +

EXPORT AND WORLD NEWS

The US sold China another 126K MT of soybeans yesterday; that is the second confirmed sale to China this month. Indonesia bought 165K MT of rice sourced from Vietnam, Myanmar and Pakistan. Japan purchased 87K MT of food-quality wheat from the US and Canada. Thailand purchased 146K MT of animal feed wheat on Wednesday. South Korea bought 67K MT of animal feed corn from the US yesterday.

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