We kicked off the day with Export Sales, GDP Growth Rate QoQ 2^nd Est, Corporate Profits QoQ Prel, GDP Price Index QoQ 2^nd Est, Goods Trade Balance Adv, Initial Jobless Claims, Retail Inventories Ex Autos MoM Adv, Wholesale Inventories MoM Adv, Continuing Jobless Claims, Core PCE Prices QoQ 2^nd Adv, GDP Sales QoQ 2^nd Est, Jobless Claims 4-Week Average, PCE Prices QoQ 2^nd Est, and Real Consumer Spending QoQ 2^nd Est. at 7:30 A.M., Pending Home Sales MoM & YoY at 9:00 A.M., EIA Natural Gas Storage at 9:30 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., 7-Year Nore Auction at 12:00 P.M., Fed Bostic Speech at 2:30 P.M., and Fed Balance Sheet at 3:30 P.M.

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The Mortgage Bankers Association’s weekly survey showed that the average 30-Year Mortgage Rate last week declined 6.44%. This marked the 6^th consecutive week of year-over-year declines and was the lowest weekly average since April 2023. The decrease in rates has simulated new demand. The MBA’s Mortgage Application Index last week was 20% higher than a year ago. However, the index is barely above the 2023 low and is 70% less than the 2020-2021 average. Due to tight inventories, home prices have risen far faster than incomes. The National Association of Realtors Home Affordable Index, which measures whether a typical family could qualify for a mortgage loan on a typical home. If the index is above 100 shows the degree to which the median home price. Below 100 means the median family income cannot afford the median family home. The index is presently near the lowest level since 1985 and has been below 100 in 14 of the last 16 months,

Gulf Moisture Improves S Plains/Delta Soil Moisture; Limited Rain Forecast in Midwest; Intermittent Heat Continues Through Sep6:

The Central US forecast is consistent with prior runs. A rather active pattern of rainfall favors TX & the Gulf/Southeast, with soaking rainfall of 2-7’ to favor TX & LA. Midwest rain stays scattered/moderate in nature and favors IA/MN nearby. Large swaths of NE, SD, MO, and IL face near complete dryness into Sep 4^th . The EU Ensemble model has recently overtaken the AI models in accuracy. It’s an unfavorable finish to the ’24 growing season. Dryness and recent heat will compound stress caused by disease in the principal Midwest. Temps overall moderate after Thurs/Friday, but highs in the upper 80’s/low 90’s will appear occasionally in the week 2 period. The top end US corn/soybean yield potential has been trimmed – the degree to be determined by rainfall the first 3 weeks of September.

World Corn Market Choppy; South American Premiums Firm; Chinese Import Demand Sluggish into November:

Chinese government officials have urged grain importers to purchase less foreign grain claiming to have ample demand due to weaker demand. CBOT futures shed modest premium following better-than-expected rainfall in portions of MO, Southeast IA, and Northern Il. China has confirmed it’s plan to keep barley/sorghum imports slow until their corn harvest is nearly completed to prop up domestic prices. Ag Resources (ARC) expects that China secures 20-24 MMT’s of corn in 2024/25 – the difficult question is who will be the supplier – the US, Argentina or Brazil. Price will determine from whom China secures corn later this year. China’s domestic corn premiums vs. offers are historically elevated ($3.40+/Bu), and ARC reiterates total world trade through late August is record large by a wide margin. Global feed grain demand growth is intact into 2025. The corn story is unchanged. US ethanol production, exports and production margins remain elevated. Competition from South America, Ukraine, and Russia is down sharply from last year. Seasonal trends as well as fundamental input support a bottom. Midwest foliar diseases could pull the US corn yield below 180 BPA the final. Following September liquidation, who is left to sell corn futures at 4-year lows – not the US farmer. Corn is forming its seasonal/annual low.

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