Soybean Winning Streak + USDA Farm "Profit" Forecast

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Futures and options trading involves risk of loss and is not suitable for everyone.

Here’s the latest update from the markets:

🌾 Soybean Futures:

Winning Streak: The Nov24 soybean contract closed higher for the fifth consecutive day on Thursday, gaining 2 cents per bushel. Despite high yield estimates, some traders worry that August’s heat and dry weather might lead to losses. Recent interest from China in US soybeans aligns with typical seasonal patterns.

🌾 Corn and Wheat Futures:

Snap in Rally: Corn futures ended their five-day winning streak with a decline yesterday, while wheat futures also halted their recent gains.

🌾 US Drought Monitor:

Conditions Worsen: The drought has worsened in parts of the Corn Belt due to above-normal temperatures and minimal rainfall. Ohio, Indiana, Illinois, Iowa, and other areas are seeing deteriorated conditions, while Wisconsin and Michigan saw some improvement. Rainfall in the High Plains improved conditions in central Kansas but worsened them in western South Dakota and Nebraska. See the USDA’s drought PDF HERE.

🌾 Mississippi River Impact:

Barge Rates Surge: Declining water levels on the Mississippi River due to drought have led to a nearly 20% increase in barge rates. Restrictions on barge traffic are in place, affecting corn and soybean shipments and making US exports less competitive. Further declines in water levels are expected with minimal rain in the forecast. See maps/graphics below.

🌾 Brazilian Soybean Weather:

Dry Conditions: Most key soybean areas in Brazil will remain dry for the next 10 days. Forecasts suggest rainfall in southern Brazil through mid-month, with a possible return of rains to central areas later in September. This drought may delay planting, with September marking the transition from the dry to wet season. See maps below.

🌾 US Farm Income:

Less Decline: USDA estimates net farm income at $140 billion this year, down 4.4% from 2023. This is better than the earlier projection of a 26% decline. Despite lower corn and soybean prices, the estimate is 15% above the 20-year average. Total crop receipts are expected to drop by $27.7 billion, a 10% decrease. Click HERE for the USDA release.

🌾 US Ethanol Production:

Slight Decline: Weekly ethanol production fell to 1.06 million barrels per day, a 1% drop from the previous week but up 5.4% year-over-year. Ethanol stocks are at 23.4 million barrels. Implied gasoline demand decreased by 4% from the previous week and 1.4% from last year. Over the last four weeks, implied gasoline demand is up 1% from last year. See charts below.

🌾 Flash Sales:

Soybeans: USDA reported multiple flash sales of soybeans on Thursday. US exporters sold 126,000 metric tons (5 million bushels) of soybeans to China and 189,700 metric tons (7 million bushels) to unknown destinations for the 2024/2025 marketing year.

🌾 Gasoline Prices:

Fall to Six-Month Lows: Gasoline prices have dropped to a six-month low, with the national average at $3.32 per gallon. This is $0.15 lower than last month and $0.49 lower than last year. Prices are expected to fall further as winter-grade gasoline becomes more common. Analysts anticipate prices could drop as low as $3 per gallon by year-end. The average retail price is already under $3 in nine states. Oil prices are pressured by China’s economic struggles and additional OPEC+ supply this fall.

Stay updated on these market movements as they can significantly impact the agricultural and energy sectors! 🌾📉💧