Written Commentary
CLOSING COMMENTS
Macroeconomics:
Mixed expectations for tomorrow’s jobs report may mean market volatility to start the day. Both Hurricanes and the Boeing strike are major factors in tomorrow morning’s numbers. The JOLTS job openings report was poor, the unemployment claims was better than expected today, which leaves mixed feelings going into tomorrow morning. This week’s earning have been mostly positive, but that didn’t stop Microsoft’s stock from having one of the worst days in 2 years today. Microsoft beat earnings, Amazon had an earnings beat, Apple beat earnings and the S&P 500 looks like it wants to head back to 5200. The VIX (volatility index) is back up to early September levels when the Japan carry trade unraveled. It’s fair to say we will experience more volatility over the next few weeks.
Ag Fundamentals:
January bean prices failed to break above the $10 resistance during trade today. December soybean oil reaches it’s highest value since July 23rd this year, closing at $45.37. Palm oil prices increased to a 2 year high adding to the global vegetable oil demand picture. Corn unchanged to slightly higher stepping into the deferred months. The CZ/CH corn spread is back up to 50% of full carry as rains move farmers from the combine to the semi cab. Estimates for both Brazilian and EU corn production were lowered about 2 million metric tons each. Below i have included a chart of the December oats futures. Oats jumped up again today to come close to covering a gap set back in May.
Weather:
Eastern Europe is dry for the next 10 days while they finish up their corn harvest and winter wheat planting season. Ukraine is expecting rain over the next 10 days as their corn harvest enters the final couple laps. Ukraine is also at the tail end of their wheat planting season, so the rain should help. Both the US and South America are seeing moisture dropping over major growing regions. Brazil weather has been cooperative and timely. The US could use a few more rains before winter to replenish reserves.
The Monthly Unemployment Rate will be released tomorrow at 7:30am CST. expectations are unchanged. Additionally the Average hourly earnings and Non-Farm Employment Change will be important for the Fed’s decision next week.
“Follow the Oats.” The December oats chart nearly closed a gap in the chart created back in May 2024. This may act as resistance for oats nearby. If we trade through and continue above the previous highs, it may flip as support.
“Rain Makes Grain.” Both the US and South American growing areas are receiving needed moisture to end the week and into the next 10 days. Europe is looking awfully dry over the next 10 days.
Calendar Spreads
Spread | Last | Chg | Full | % of FC |
CZ24/CH25 | -15 1/4 | -1 1/4 | -30 3/4 | 50% |
SX24/SF25 | -12 | +2 3/4 | -26 3/4 | 45% |
SX24/SN25 | -56 1/4 | +1/4 | -105 3/4 | 53% |
MWZ24/MWH25 | -24 | – 1/4 | -30 1/2 | 79% |
WZ24/WH25 | -19 3/4 | +1/2 | -24 | 82% |
KWZ24/KWH25 | -13 3/4 | +1/4 | -24 | 57% |
Cost of Carry
Deliveries against the November contract were in line with expectations at 97 contracts.
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)
>>Interested in more commentary by Joe Mauck? Go HERE
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