The equation seems simple
The equation would be something like this. (End of month + First notice day + Hurricane Ida) x Impending harvest = Risk-off trade for the grain and soy markets. While most of these markets have been bent but not quite broken, there would appear to be little on the horizon, at least between now and the extended Labor Day weekend that would shore up any bullish sentiment.
According to the weekly update from NASS, we now have 91% of the corn in this nation in the dough stage, and 59% is denting. That which has reached maturity stands at 9%, which is pretty much in line with the 5-year average with North Carolina, 74%, and Texas 60% the most advanced. 93% of soybeans are setting pods, and 9% are now dropping leaves. Granted, there is not a category for turning color, but I have been just a bit surprised at how rapidly a number of fields in my areas that have begun to turn. 86% of the cotton is setting bolls, compared with 94% on average and 21% have bolls opening versus 26%. Spring wheat harvest has reached 88% complete, which increased 11%, so similar progress this week would mean harvest should be virtually wrapped up. Of course, with the often-poor yields being witnessed this year, the harvest will move at a much quicker pace.
In case you missed it, here is a picture from the Cargill facility at Reserve, LA. From reports I have read, this appears to be the only facility with significant structural damages. Still, even for those more fortunate, the power outages could delay loading and or repairs for weeks. Needless to say, this facility will most likely be out of commission for longer than that.
In Brazil, the safrinha corn harvest has reached 89% complete and obviously yields have not improved. Dr. Cordonnier lowered his estimate for the entire Brazilian crop another 2 MMT this week to 82 MMT. Rains have fallen across Rio Grande do Sul, Santa Catarina, Mato Grosso do Sul, and Parana over the weekend so planting of full-season corn should kick into gear. AgRual estimates that just over 5% of the crop is now planted. It is also worth pointing out that demand for credit for the 2021/22 Harvest Plan is running 16% ahead of last year.
We have a number of economic releases this morning, most leaning a bit to the disappointing side. The Chicago Purchasing Managers Index for August came in at 66.8, compared with an expected 69.8 and 73.4 in July. The August Consumer Confidence Index slipped to 113.8, versus the expected 124, the Consumer Present Situation Index registered 147.3, versus last month at 159.6 and the Consumer Expectations Index dropped to 91.4, compared with 108.4 last month. Finally, the Case Shiller Index for Metro home prices was 19.1% higher in June than the same month a year ago and had climbed 2% from May.
In the macros this morning, we find energies lower, metals firm, financial instruments slightly higher, equities mixed and the dollar lower.
