We kicked off the day with Fed Kugler Speech at 6:00 A.M., Initial Jobless Claims, Continuing Jobless Claims, Jobless Claims 4-Week Average, PPI, Core PPI MoM & YoY, PPI MoM & YoY, PPI MoM & YoY, and PPI Ex Food, Energy Trade MoM & YoY at 7:30 A.M., Fed Barkin Speech at 8:15 A.M., EIA Natural Gas Storage at 9:30 A.M., EIA Energy Stocks at 10:00 A.M., 4-Week & 8-Week Bill Auction at 10:30 A.M., 15-Year & 30-Year Mortgage Rate at 11:00 A.M., Dairy Products Sales at 2:00 P.M., Fed Williams Speech at 3:15 P.M., and Fed Balance Sheet at 3:30 P.M.

Photo by Jesse Gardner on Unsplash

The Consumer Price Index in October rose o.1% from September to set a record high of 315.66. This marked the 10^th consecutive month higher, while core inflation (less food and energy) rose for the 46^th consecutive month. The annualized inflation rate was at a 3-month high of 2.6%. Compared to January 2020, the CPI was 22% higher in October, reflecting a further erosion in purchasing power of the US Dollar. One dollar in October 2024 had the same purchasing power as $.78 in January 2020. The last 4 years have seen the largest decline in purchasing power since the 1980’s as the US money supply and government spending have been hugely inflated. This trend is not likely to change anytime soon, as more than half of the money from various spending bills in the last 4 years has yet to be distributed.

Change in South American Weather?

Models Lack Consistency on Argentine Precipitation Forecast-No Issues Today; Expansive Wet Pattern Ahead in Brazil:

Model agreement in Argentina beyond the next 10 days is poor. Forecast have alternated between allowing rain to return to key areas of Argentina’s crop belt beyond Nov 10^th and stagnant dryness. Crop threats today are limited amid the absence of extreme heat and as abundant rain fell across Argentina in October. But amid cooler than normal equatorial Pacific Ocean temps, closer attention will be paid to long range guidance in Argentina. The EU ensemble model has been the best performer so far this season in South America. The tropical monsoon continues to perform normally. A welcomed expansion of precipitation into southern Brazil occurs Nov 18-23. Water availability is not an issue in Brazil.

Central US Weather Pattern Discussion

Surplus Soil Moisture to be Established in HRW Belt by Late Nov; Intense Dryness Confined to ND/NE and far E Midwest:

The rapid erosion in the coverage of Central US drought continues. The major forecast models, along with the NOAA, are in broad agreement that yet more rainfall impacts OK, KS, and nearly the entirety of the Midwest and mid-South over the next 6-7 days. Mississippi River levels are set to surge or stay above critically low levels into the latter part of the month. The intensity of the Central US rainfall since Nov 1 has been timely. If the NOAA. If the NOAA’s projected soil moisture anomalies on Nov 27^th, assuming the current two-week forecast verifies, additional improvement is offered to E Plains, W Midwest & Upper Great Lakes. Positive anomalies will be in place across the vast majority of HRW production areas while drought will have been ended in IA & WI.

World Corn Markets Unable to Rally; US Export Demand Stays Enlarged Ahead of Potential Tariffs, Argentine Weather to be Watched:

CBOT corn futures ended weak for a third trading session. Weakness in wheat and soy products can’t be ignored. But corn’s relative strength against neighboring markets is noteworthy, and while the US has lost it’s competitive edge for Dec-Jan delivery, US export commitments continue to expand rapidly. Exporters yesterday sold another 27 Mil Bu to Mexico & unknown destinations. On a known basis since Oct 31^st, exporters have sold 111 Mil Bu, with cumulative sales as of Nov 13^th calculated at 1,236 Mil Bu-or 53% of USDA’s annual forecast with 42 weeks remaining in the crop year. Pace analysis suggest USDA’s annual forecast is 25-50 Mil Bu too low, a rather large physical export program lies in the offing this winter. Resistance at $4.35, basis Dec, and $4.50, basis March, stays intact without adverse S American weather. But a La Nina-like forecast in Argentina over the next two weeks will be monitored. Ag Resources (ARC’s) bet is that both breaks and rallies will; be labored. US recoveries to sell. Weekly US production to be published today. This morning’s EIA report should feature ethanol production for the week ending Nov 8^th near unchanged from the previous week and up 5-6% from the same week in 2023. Crude stocks are anticipated to expand seasonally into the holiday season.

Hurricane Watch:

Tropical Depression 19 is expected to reach hurricane strength in the next 12 to 24 hours according to Fox news this morning. The National Hurricane Center updated advisory this morning at 4:00 A.M. EST expects the system to approach Belize and the Yucatan Penninsula. It is too early to determine the impacts the system could bring to portions of the eastern Gulf of Mexico, including Florida, the Florida Keys, and Cuba during the middle portion of next week. Residents of these areas should regularly monitor updates to the forecast. These storms tend to be tricky and when Hurricane soon to be Sara will be murk in the waters of the Gulf.

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