July 15, 2024 - Newswires

Soybeans and wheat incurred double-digit losses, corn mixed after July USDA data ...

Please to note:

"While the 2024 harvest is advancing, depending on the activities keeping us busy in the field, the publication of this newsletter may vary or be cancelled. Therefore, we do not guarantee a daily release as usual. Thank you."

Good morning, Farmer Family ...

US farm markets ended mixed, mostly lower on Friday.

Corn prices picked up 0.44%.

Soybeans stumbled 1.07% lower.

The rest of the soy complex also was in the red, as soymeal lost 1.05%, while soyoil fell 1%.

Wheat prices crumbled across all the board, with Chicago SRW slumping 3.59%, Kansas City HRW dropping 2.74%, and Minneapolis spring wheat tumbling-3.43%.

• Corn rebounded from multi-year lows, although it ended the week lower for the third time in the past four weeks, after WASDE reported tighter stocks than traders had expected.
• The USDA indeed projected old-crop corn stocks to fall to 1.877 billion bushels, as feed and residual use increased.
• That fuelled a flurry of short-covering.
• However, the corn's rally was muted by USDA's estimate of a monster U.S. wheat crop.
• USDA also predicted that the 2024/25 corn crop production at 15.1 billion bushels, poising it to be the third-largest in U.S. history, with corn end stocks being the largest in six years as of September 2025.
• Last month the USDA had pegged corn production at 14.860 billion bushels.
• Meantime, U.S. 2024/25 corn end stocks are now forecast at 2.097 billion bushels, lower than the agency's estimates in June and lower than analyst expectations, but still the largest in six years.
• On the world side of the equation, the WAOB showed Brazilian 2023/24 production at 122 MMT unchanged from last month.
• For the 2024/25, USDA was still at 127 MMT.
• The Argentina 23/24 crop was down 1 MMT to 52 MMT.
• World ending stocks for the 23/24 marketing year were down 3.26 MMT to 309.13 MMT, as new crop was up 0.87 to 311.64 MMT.
• Soybeans on their part turned lower in spite the USDA cut US soybean end stocks for 2024/25 at 435 million bushels.
• That was lower than the expected 449 million bushels and a decrease from June's 455 million bushels.

• The USDA saw US soy production at 4.435 billion bushels.
• However, multiple soybean contracts had hit lifetime lows and fell precipitously earlier in the week as weak demand and a hefty global supply of soy weighed over the market.
• On the world side, indeed, the USDA left unchanged Brazil’s soybean production estimate at 153 MMT.
• The projected 2024/25 crop was held at 169 MMT.
• As for Argentina the crop was trimmed by 0.5 to 49.5 MMT.
• World soybean stocks for the 2023/24 crop were up by just .18 MMT to 111.25 MMT.
• For new crop the smaller US number helped take the stocks total to 127.76 MMT, a 0.14 MMT drop from a month earlier.
• Meantime, traders are paying close attention to weather as crops are in its key pollination season.
• There is a 70% chance of the La Nina weather pattern, characterized by cold temperatures in the Pacific Ocean, developing during August-October, a U.S. government forecaster said on Thursday.
• On the other hand, updated NOPA data will be released later in the day, with analysts estimates looking for 177.94 mbu of bean crushed in June.
• If realized, the June crush would be down 3.1% from the May crush of 183.625 million bushels but up 7.8% from the 165.023 million bushels in June 2023.
• It would also be the largest June crush on record, topping the prior mark set in 2020.
• Soy oil stocks, meantime, are projected at 1.669 billion lbs at the end of June.
• That would be down 3.2% from 1.724 billion lbs at the end of May and down 1.24% from the 1.690 billion lbs at the end of June last year.
• Wheat prices dropped, ending the week down for the sixth time in the last seven weeks.
• The government projected total U.S. wheat production at 2.008 billion bushels, an eight-year high.
• The USDA estimated the U.S. 2024 HRW wheat crop at 763 million bushels, up from its previous estimate of 726 million bushels.
• The USDA raised its forecast for U.S. wheat ending stocks to 856 million bushels from 758 million bushels in June.
• World ending stocks for wheat were also increased to 257.24 million metric tons, up from 252.27 million metric tons reported in June.
• Wheat stocks for the world were raised by 4.97, with a bulk from the US, as both Canadian and Argentine wheat production were raised.

In this context ...

Spot basis bids for corn were steady to firmer in the U.S. Midwest, supported at processing sites and river elevators by a lack of farmer offerings while Chicago Board of Trade corn futures lingered near contracts lows around $4 per bushel.

• Notably, the spot basis for corn firmed by 4 cents at Decatur, Illinois, a grain processing hub.
• The Decatur corn basis has improved by 10 cents since the start of this week.
• The corn basis also firmed at grain elevators along the Mississippi and Illinois rivers, where grain is loaded onto barges for shipment toward the U.S. Gulf, reflecting exporters' demand for corn.
• For soybeans, Midwest basis bids were mostly steady but the basis fell by 10 cents at a crushing facility in Lafayette, Indiana.
• Spot basis bids for hard red winter (HRW) wheat held steady.
• Protein premiums for HRW wheat shipped by rail to or through Kansas City were mixed.
• Premiums rose by 10 cents for "ordinary" wheat with less than 11.0% protein.
• Premiums fell by 4 cents for 11.2% and 11.4% protein wheat and fell by 7 cents for 11.6% and 11.8% protein wheat.
• Commodities fund were net sellers in CBOT wheat, soybean, and soyoil contracts, while they were net buyers in corn contracts.

After the sessions close ...

• The Commodity Futures Trading Commission’s weekly commitments of traders report showed large speculators increased their net short position in CBOT corn futures in the week ended July 9.
• The report also showed that non-commercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and increased their net short position in soybeans.
• Notably, spec funds in corn expanded their positions to a record net short of 353,983 contracts.
• That net short was an additional 17,445 contracts from the week prior.
• Commercials were net long a record 62,665 contracts on that date.
• For soybeans, the large managed money spec funds held a record net short position as of July 9 of 172,605 contracts.
• That was an increase of 31,679 contracts on the week.
• For wheat, the report showed CBOT wheat spec traders net short 69,137 contracts as of July 9, a 4,837 contract reduction on the week.
• In KC wheat, they were trimming 2,292 contracts to 40,811 contracts by July 9.

For the week ...

• Corn saw a better price action during this past week, as September was only 2.05% lower.
• Soybeans stumbled, with August down 5.25%.
• Soy meal lost 5.15% since the prior Friday, while bean oil, posted a 5.85% weekly decline.
• Wheat were slashed for much of the week.
• Chicago wheat crambled 6.74% in the September contract.
• Kansas City plumbed 5.24%, while Minneapolis spring wheat sank 5.65%.

This morning ...

Chicago wheat lost more ground, with prices dropping to their lowest levels in three-and-half months, as pressure from freshly-harvested crops in the United States and Russia dragged down the market. Soybeans dropped to their lowest levels in four years, while corn fell on expectations ample global supplies.

• Notably, the most-active wheat contract in the Chicago Board of Trade (CBOT) lost 1.3% to $5.43-3/4 a bushel as of 0334 GMT, after dropping to its lowest since April 3 at $5.41-3/4 a bushel earlier in the session.
• Corn gave up 0.8% to $4.11-1/2 a bushel and soybeans slid 1.1% to $10.53-1/2 a bushel, after falling to their lowest since 2020 at $10.52 a bushel earlier on Monday.
• U.S. bond futures slipped and the dollar firmed, as investors wagered the attack on U.S. presidential candidate Donald Trump made his victory more likely, while injecting a whole new level of political uncertainty into markets.
• The week would start per normal with the Export Inspections in the afternoon.
• The NOPA report is scheduled for release at 11 a.m. CDT (1600 GMT).
• Overnight, after the sessions close the USDA will out with their weekly Crop Progress report and updates to condition ratings and development pace.
• Skip ahead to Wednesday, and the EIA will update ethanol production and stocks data.
• The weekly Export Sales report will be back on the normal Thursday release schedule.

Canada

Conditions in the Saskatchewan province were generally drier over the past week compared to previous weeks.

• Despite the excess moisture causing crop yellowing in low lying areas in some regions of the province and lack of moisture contributing to drier areas within other regions, crop conditions are reported to be in overall good condition.
• Currently, cropland topsoil moisture is rated as seven per cent surplus, 83 per cent adequate, eight per cent short and two per cent very short.
• Hayland topsoil moisture is reported at five per cent surplus, 84 per cent adequate, nine per cent short and two per cent very short.
• Pasture topsoil moisture is three per cent surplus, 80 per cent adequate, 14 per cent short and three per cent very short.

Meantime, per latest data from the Canadian Grain Commission ...

• Common wheat deliveries into the handling system during the week ending July 7, 2024, were at 333.6k mt, with durum at 43.7k mt as well.
• Canadian wheat exports for shipping weeks 49 came in at 324,3k mt, for a total of 20.082,1k mt YTD.
• Durum wheat exports were at 30,8k mt, for a total of 3.307,3k mt YTD.
• Commercial stocks stood at 1.808,0k mt for common wheat, and at 245.3k mt for durum.
• In this context, Western Canadian wheat bids tumbled, during the week ending July 12.
• Canadian Western Red Spring (CWRS) wheat prices were down C$10.75 to C$10.87 per tonne.
• Average prices were between C$270.3/tonne in southeast Saskatchewan to C$288.04/t in southern Alberta.
• Canadian Prairie Red Spring (CPRS) prices dropped C$9.52 to C$10.27/tonne.
• The lowest average bid for CPRS was C$251.6 in southeast Saskatchewan, while the highest average bid was C$272.41 in southern Alberta.
• The average prices for Canada Western Amber Durum (CWAD) were down C$6.57 to C$12.08 per tonne, with bids between C$311.43 in northwest Saskatchewan to C$326.82 in southern Alberta.

South America

Brazil

Farmers in Brazil are expected to harvest 90 million metric tons of second corn in the present cycle, nearly two million tons more than forecast last month, crop agency Conab said on Thursday.

• Conab said second corn and total corn production will be smaller this year than in the last, partly reflecting a drop in planted area.
• For second corn, the area planted was nearly 6% smaller this season, when growers sowed 16.199 million hectares, the agency said.
• According to Conab, the harvest of Brazil's second corn crop advanced in all producing states and reached 48% of the sown area at the beginning of July.
• If Conab's estimates are confirmed, Brazil's overall second corn production will be 12% smaller than in the 2022/23 crop year.
• Total corn production is likewise seen about 12% lower at 115.86 million tons.
• Corn exports too will be significantly smaller at 33.5 million tons in this cycle, compared with 54.6 million tons in the previous year, Conab said.
• Brazil’s soybean production estimate was trimmed slightly by 0.02 MMT to 147.33 MMT in this month’s CONAB release.
• However, according to Safras & Mercado, Brazil's 2024/25 soybean crop, could grow by 13% and reach 171.54 million metric tons.
• Brazil's soy planting is poised to increase in practically all producing states, but at a smaller pace in relation to previous harvests, according to Safras.
• The consultancy projects farmers will sow soy on 47.33 million hectares, an area 1.9% larger than in 2023/24.

Argentina

Argentina's 2024/25 wheat crop will likely yield 20.5 million metric tons, or down about 3% compared to the 21 million tons previously estimated due to a lack of rain, the Rosario grains exchange said on Thursday.

Europe

European grain markets fell.

• September wheat settled 1.5% lower at 220.00 euros ($239.84) per metric ton.
• The contract fell to 218.25 euros during the session, hitting its lowest level since April 22.
• MATIF corn Aug was down €3.25/t to €216.75/t, while rapeseed fell €2/t ending to €474.5/t.
• Wheat prices fell, as widely followed U.S. government forecasts underscored ample global supply including a bigger than expected U.S. crop.
• Europe remains divided in two in meteorological terms.
• In the west, wet and unstable weather persists, and spring crops are benefiting, but it is hampering the harvesting of winter crops.
• In the east, drought and heat persist, enabling the harvest to progress rapidly but at the same time damaging spring crops.
• As a result, the wheat market continued to suffer from harvest pressure in the Black Sea, while corn is holding up better in the face of fears of lower production in the Balkans and the Black Sea.
• Rapeseed, on its part, has fallen back amid fall in Canadian canola, which is benefiting from good crop conditions.
• Meantime, Strategie Grains increased their EU production estimate for wheat by 0.5 MMT to 122.3 MMT.
• France, is expected to see stocks of soft wheat decline sharply this season due to a poor harvest.
• Harvest forecasts according to FranceAgriMer ranged from 27.1 million to 28.5 million tons.
• The wheat harvest showed little progress so far this season, due the persistent rain.
• Just 4% of the soft wheat area had been harvested by Monday 8, farm office FranceAgriMer said.
• Some 57% of French soft wheat was rated as in good or excellent condition.
• Durum wheat is rated 62% as "good to excellent".
• However, soft wheat initial results, showed a satisfactory quality and an absence of mycotoxins.
• Meantime, FranceAgriMer said French wheat exports outside the EU will be about 7.5 million tons, this season.
• That was down from 10.2 million in 2023/24.
• Also, end of season stocks were projected to drop to 3 million tons from 3.83 million.
• For barley, 61% of winter barley had been cut by Monday 8, according to FranceAgriMer.
• FranceAgriMer pegged barley production between 10.3-10.7 million tons.
• The office projected that French 2024/25 barely exports outside the EU would drop 22% to 3 million tons from 3.83 million last season, while stocks would rise to 1.74million tons from 1.40 million in 2023/24.
• For maize FranceAgriMer did not give a 2024/25 outlook.
• For 2023/24, it left almost unchanged its stocks estimate at 2.23 million tons, nearly 35% higher than in 2022/23.
• In Sweden, used to supplement Baltic region export shipments, initial barley harvesting started after rain delays.
• Meantime, trade expectations for the Sweden's wheat crop are around 2.9 million tons, up from 2.5 million last year.
• Swedish winter grains are looking good.
• Also, low Black Sea prices reduced export prospects
• Exporters are talking around 12 euros under Euronext December for Algeria-quality wheat in Swedish ports but selling willingness is very limited.

Ukraine

Ukraine has harvested 8.41 million metric tons of grains from a total area of 2.282 mln ha, so far, the farm ministry said on Friday.

• The ministry said farmers had threshed 5.72 million tons of wheat and 2.42 million tons of barley.
• As for oilseeds, as of July 11, rapeseed was harvested on 499.6 thsd ha, threshing 1.085 mln tonnes.
• The soybean harvest remained unchanged over the week, with 0.15 thsd ha harvested, yielding 0.29 thsd tonnes of soybeans at 19.3 c/ha.
• Meantime, Ukraine's grain exports in the 2024/25 marketing season had risen to 1.5 million metric tons by July 12 from 894,000 tons a year earlier, official data showed.
• Overall exports included 480,000 tons of wheat, 824,000 tons of corn and 186,000 tons of barley.
• The total export of Ukrainian flour since the beginning of the season as of July 12 is estimated at 2.2 thsd tonnes, including wheat flour - 2.1 thsd tonnes.
• In this context, Ukrainian 11.5% protein wheat for August Black Sea shipment was offered between $199 to $209 a ton FOB.

Russia

While global prices have been under pressure this month due weather conditions, now warm, dry weather has helped harvesting advance in the Russian crop belt.

• Mostly hot, dry weather is forecast in south Russia next week, which would be positive for harvest progress.
• As of July 10, more than 6 million tons of grain had been harvested in the Rostov region with an average yield of 3.45 tons/hectare, according to the region’s Governor, Vasily Golubev.
• Russia's Centre has also started to harvest wheat, with first yields around 3.1 mt/ha on average.
• That is lower compared last year's final yield 4.7 mt/ha, and lower compared with the 3-year average of 4.3 mt/ha.
• With winter crop harvest reports placing winter wheat harvest greater than 20pc complete, the USDA held Russian all wheat production at 83Mt and exports at 48Mt.
• Meantime, Russian internal wheat prices tumbled amid the harvest pressure.
• 12.5% wheat bids in deep-sea ports decreased from June to July by 16% to 15,250 rub/mt (excluding VAT), as per SovEcon estimate.
• Ruble prices declined amid unfavorable global market conditions and an improved outlook for the Russian wheat crop.
• Meantime, export prices for Russian 12.5% protein wheat for August Black Sea shipment was offered at $220-$221 a ton FOB on Friday.
• That was steady to up, against $216-221 pegging early in the week.
• Russian 11.5% protein was offered around $211-$213 a ton FOB.

China

Per latest data from the Chinese General Administration of Customs, China's soybean imports in June rose 10.7% from a year earlier.

• Chinese buyers stocked up on cheaper Brazilian beans ahead of the North American export season in the fourth quarter.
• Notably, the country imported 11.11 million metric tons in June.
• That is compared with 10 million tons a year earlier.
• However, shipments in the first half of the year fell 2.2% from a year earlier to 48.48 million metric tons, official data showed.
• For July, analysts are expecting a record volumes of soybean imports by China, likely to amount between 12 million-13 million tons.
• Meantime, China's agriculture ministry kept its forecasts for corn, soybeans and other key crops unchanged in its July outlook.
• Notably, corn production is expected at 297 MMT.
• Chinese corn imports are also expected to hold steady, with an estimated 13 MMT.
• Soybean production is expected to come in at 20.54 MMT.
• Chinese soybean imports are also holding steady, with an estimated 94.6 MMT.
• Conversely, China's summer wheat production rose 2.7% this year, official data showed.
• Production indeed rose to 138.22 million metric tons.
• Wheat acreage increased by 0.1% while yields rose 2.6%, the National Bureau of Statistics said.
• China's summer grain production rose 2.5% from a year ago to 149.78 million metric tons, while summer grain planting acreage was stable at 26.61 million hectares.
• Meantime, lots of statistics are to be released today in Beijing, including monthly house price, industrial production, urban investment, retail sales, and unemployment, along with Q2 GDP.
• Analysts and traders have set their expectations low.
• In this context, China's second-quarter pork output fell 3% from a year earlier to 13.98 million metric tons, data from the National Bureau of Statistics showed on Monday.
• China slaughtered 363.95 million hogs during the first half of the year, down 3.1% on a year earlier, the data showed.

Pakistan

Federal Government has imposed ban on import of wheat.

• In an SRO issued on Friday Commerce Ministry has clearly stated that ban on import of wheat will remain in place in all circumstances.

Southeast Asia

Malaysia

Malaysian palm oil prices ended lower, with the contract snapping two consecutive weekly gain.

• Notably, the benchmark palm oil contract for September delivery on the Bursa Malaysia Derivatives Exchange lost 0.53%.
• For the week, the contract fell 3.1%.
• Palm oil prices dropped due to higher inventories in June.
• Per latest data from the Malaysian Palm Oil Board, Malaysia's palm oil stocks at the end of June rose 4.35% from May to 1.83 million metric tons, the highest since February.
• Crude palm oil production declined 5.23% from May to 1.62 million tons, while palm oil exports plunged 12.82% to 1.21 million tons.
• However, expectations that exports would pick up in July provided some support.
• India's palm oil imports in June rose to hit the highest level in six months on robust demand from refiners for upcoming festivals.

Australia

The Grain Industry Association of Western Australia has released its initial estimate for the state’s winter crop now up and away in virtually all areas at 16.3 million tonnes (Mt) from 8.7M hectares.

• In its July crop report the GIAWA said rain at the start of July has reached most grain-growing regions of WA, with falls of 15mm or more for all areas.
• The exceptions are parts of the southern regions, and western portions of the Esperance port zone, while northern zones received well in excess of 15mm.
• As a result, WA’s crops now look “deceptively fresh”, and in general have reasonable grain-yield potential.
• “Rainfall deciles are low or very low for all areas of the state and it is going to need to be a good year from here on in to hit the current potential of 15-16Mt of total grain for Western Australia.”
• Cereals are in better condition than the break crops, which have suffered more from the late start and patchy June rainfall.
• “Canola and lupin grain yields will be at the lower end of long-term averages for their regions.”
• The total crop area in the state is up from 2023 plantings, and the area of canola is down, replaced by wheat.
• GIWA’s July area estimate for all crops are unchanged from the June figures, with the exception being canola, which is 10,000ha lower.
• Oat area has increased in traditional oat-growing regions, although there is little change elsewhere.
• “The lupin area is down again this year to 20-year lows, and pulse crop area is insignificant in the scheme of things.”
• GIWA’s estimate for the 2023-24 crop stands at 14.53Mt.
• Meantime, prices of wheat and barley in the west closed down on Friday, although canola was largely unchanged at A$790/t FIS for new crop.
• ASX Jan 2025 wheat was unchanged at A$350/t, while ASX Jan 2025 barley unchanged at $A303.90/t.
• However, the canola fall in the east seems to have slowed and prices stabilised in the back end of the week.
• On the currency side, the Australian dollar is holding around 0.6775 and the odds continue to firm for a US interest rate cut in September.
• The A$ has now risen from a low this year of 64cents in mid-April.

International grain and oilseed tenders & trade

• South Korea's Major Feedmill Group (MFG) is believed to have rejected all offers and made no purchase in an international tender to buy up to 140,000 metric tons of animal feed corn on Friday. The tender had sought corn from South America or South Africa only for December arrival in South Korea. Lowest price offered was believed to be $239.90 a ton c&f plus a $1.50 a ton surcharge for additional port unloading said to have been submitted by trading house ADM.
• Taiwan's MFIG purchasing group has issued an international tender to buy up to 65,000 metric tons of animal feed corn which can be sourced from the United States, Brazil, Argentina or South Africa. The deadline for submission of price offers in the tender is Wednesday, July 17. Price offers in MFIG's tender are being sought for one consignment of yellow corn of between 40,000 tons and 65,000 tons at a premium over the Chicago December 2024 corn contract. Shipment is sought between Sept. 8 and Sept. 27 if the corn is sourced from the U.S. Gulf, Brazil or Argentina. If sourced from the U.S. Pacific Northwest coast or South Africa, shipment is sought during Sept. 23-Oct. 12. Because of concerns about poor quality, Argentine corn will only be accepted by MFIG if it is the lowest price offered and at least 4 cents per bushel below the next cheapest offer from other origins.

Outside markets ...

Energy markets

Oil prices settled slightly lower.

• Brent crude futures settled 0.43% lower, while U.S. West Texas Intermediate crude futures fell 0.5%.
• For the week, Brent futures fell more than 1.7% after four weeks of gains, WTI futures posted 1.1% weekly decline.
• According to the University of Michigan, U.S. consumer sentiment fell in July, but inflation expectations improved for the next year and beyond.
• The U.S. Labor Department said the producer price index rose slightly more than expected.
• Still, investors expect the Fed could start cutting rates in September.
• Oil prices during the week have drawn some support from U.S. gasoline demand, after official data showed it was at 9.4 million barrels per day (bpd) in the week ended July 5, the highest since 2019 for the week that includes the Independence Day holiday.
• Jet fuel demand on a four-week average basis was at its strongest since January 2020.
• The strong fuel demand encouraged U.S. refiners to ramp up activity and draw from crude oil stockpiles.
• U.S. Gulf Coast refiners' net input of crude rose last week to more than 9.4 million bpd for the first time since January 2019, government data showed.
• However, signs of weaker demand from China could counter the outlook from the United States and weigh on prices.
• Meantime, according to the energy services firm Baker Hughes, U.S. active oil rig count, an early indicator of future output, fell by one to 478 during the week, the lowest since December 2021.
• Also, per latest CFTC report, money managers raised their net long U.S. crude futures and options positions in the week to July 9.

This morning, oil regained ground, with political uncertainty in the U.S. and the Middle East supporting prices, offsetting downward pressure from a stronger dollar and weak demand in top importer China.

• Brent crude futures rose 15 cents, or 0.2%, to $85.18 a barrel by 0425 GMT, while U.S. West Texas Intermediate crude stood at $82.41 a barrel, up 20 cents, or 0.2%.
• The dollar firmed early in the session after a failed assassination bid on U.S. presidential candidate Donald Trump.
• In the Middle East, talks on ending the Gaza conflict between Israel and Hamas halted on Saturday after three days, though a Hamas official said the following day it had not withdrawn from discussions.
• Meantime, China's economy slowed in the second quarter.
• China's crude oil imports fell 2.3% in the first half of this year to 11.05 million barrels a day, amid disappointing fuel demand and as independent refiners cut output due to weak profit margins.
• Crude throughput at Chinese refineries fell 3.7% in June from a year earlier to 14.19 million bpd, the year's lowest so far, customs data showed.

Ocean freight markets

The Baltic Exchange’s dry bulk sea freight index in London rose, marking a weekly gain on the back of higher rates across all the vessel segments.

• Notably, the overall index gained 2.6%, and 2.9% for the week.
• The capesize index rose 3.6%, posting a 0.6% weekly gain.
• The panamax index rose about 2.4%, and gained 9.6% for the week.
• The supramax index edged 0.2% higher, and was up 2.2% during the week.

Equity markets

U.S. stock indexes settled higher.

• The Dow Jones Industrial Average rose 0.62%, the S&P 500 climbed 0.55%, while the Nasdaq gained 0.63%.
• For the week, the S&P 500 rose 0.9%, the Nasdaq added 0.2% and the Dow rose 1.6%.
• Stock indexes initially moved lower.
• The US June PPI final demand rose +0.2% m/m and +2.6% y/y, with the +2.6% y/y gain being the largest year-on-year increase in 15 months.?
• The June PPI ex-food and energy rose +0.4% m/m and +3.0% y/y, with the +3.0% y/y gain being the largest year-on-year increase in 14 months.
• However, stocks recovered, and bond yields fell after the details in the PPI report suggested the larger-than-expected increase in June was mostly driven by an outsized jump in trade services.
• As a result, the 10-year T-note yield fell -2.5 bp to 4.1854%.?
• A rebound in chip stocks after Thursday’s sell-off also boosted the overall market.?
• Meantime, the University of Michigan’s US July consumer sentiment fell -2.2 to 66.0.
• The University of Michigan’s US July 1-year inflation expectations indicator eased to 2.9% from 3.0% y/y in June.?
• Finally, the July 5-10 year inflation expectations eased to 2.9% from 3.0% in July.
• In Europe, the Euro Stoxx 50 rallied to a 5-week high and closed up +1.34%.?
• China's Shanghai Composite rose to a 1-week high and closed up +0.03%.?
• Japan's Nikkei Stock 225 Index closed down -2.45%.
• Japan’s May industrial production was revised upward to +3.6% m/m.

This morning, Asian shares began the week trading mixed.

• Markets in Tokyo were closed for a public holiday.
• Elsewhere in the region, Hong Kong's Hang Seng fell 1.1%, the Shanghai Composite slipped 0.1%, in Seoul, the Kospi lost 0.1%, the S&P/ASX 200 gained 0.9%, Taiwan's Taiex lost 0.2% and the SET in Bangkok shed 0.4%.
• Markets seemed to take in stride a shooting at a rally for former President Donald Trump in Butler, Pennsylvania.
• Meantime, China reported that its economy expanded at a slower-than-forecast 4.7% annual pace in the last quarter.
• Annual economic growth fell from 5.3% in the first quarter but the 5% pace of growth in the first half of the year was in line with the government's forecast for about 5% growth for 2024.
• In quarterly terms, the economy expanded 0.7%.
• Chinese central bank left its medium-term lending rate unchanged, as expected, at 2.5%.
• Leaders of the ruling Communist Party began a four-day meeting in Beijing to set economic strategy for the coming decade.

Currency trading

The dollar index fell and posted a 5-week low.

• The dollar had carryover pressure from Thursday’s weaker-than-expected US CPI report.
• Friday’s rally in the S&P 500 and Dow Jones Industrials to a new all-time highs also curbed liquidity demand for the dollar.
• The dollar was also undercut after the University of Michigan’s US consumer sentiment index unexpectedly fell to an 8-month low.
• Limiting losses the Friday’s stronger-than-expected US PPI report.
• Meantime, the EUR/USD rose, posting a 5-week high.
• The strength of 10-year German bund yields has strengthened the euro’s interest rate differentials.
• The USD/JPY on the other hand fell, with the yen posting a 3-week high against the dollar, on signs the BOJ intervened in the forex market in support of the yen.
• According to a Bloomberg analysis of central bank accounts, the BOJ spent around 3.5 trillion yen ($22 billion) on Thursday to support the yen.
• Also, an upward revision Friday to Japan’s May industrial production is positive for the yen.

This morning, the U.S. dollar fell to 158.03 Japanese yen from 158.16 yen late Friday. The euro was nearly unchanged at %1.0893.

Settlement Prices for Key Commodity, Index & Currencies

• Chicago wheat Sep contract was down 20.4c/bu to 550.6c/bu;
• Kansas wheat Sep contract was down 16c/bu to 567.6c/bu;
• Minneapolis wheat Sep contract was down 21.2c/bu to 597.4c/bu;

• MATIF wheat Sep was down €3.25/t to €220/t;

• ASX wheat Sep contract was down A$1/t to A$346.3/t;

• US DWI Cash (durum wheat index) was down 4.69c/bu to 647.75c/bu;

• 1CWAD (Canadian durum) avg spot price was down C$4.58/t to C$318.85/t.
• EDW (EU durum) Sep contract was unchanged to €310/t;

• Chicago corn Sep contract was up 1.6/bu to 402c/bu;

• MATIF corn Aug was down €3.25/t to €216.75/t;

• Chicago soybeans Aug was down 12c/bu to 1105c/bu;

• Winnipeg canola Nov contract was down C$3.5/t to C$618.7/t;

• MATIF rapeseed Aug was down €2/t to €474.5/t;

• Brent crude Sep was down $0.37/barrel to $85.03;

• WTI crude Aug was down US$0.41/barrel to $82.21;

• BADI (Baltic Dry Index) was up 50 points to 1.997;

• Dow Jones was up 247,15 points to 40.000,90;
• S&P 500 was up 30,81 points to 5.615,35;
• NASDAQ Composite was up 115,04 points to 18.398,44;

• US dollar index (Sep '24) was down 0.348 points to 104.783;

• AUD/USD firmer at US$0.6783;
• USD/CAD firmer at $1.3635;
• EUR/USD firmer at $1.0904;
• USD/RUB firmer at ?87.8581.

That's all, thank you.

We wish you a nice day.

Author: Sandro F. Puglisi

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