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WEEKLY ECONOMY, COMMODITY & ENERGY REPORT: AUGUST 29^TH 2024.

OVERVIEW

The price for corn was down from the previous week. In contrast soybeans and soybean meal were higher this past week, reversing the declines over preceding weeks. Corn and soybean prices were influenced by the August 2024 WASDE Report, the Pro Farmer Crop Tour and by farmers selling to avoid further declines and to make room for the 2024 harvest beginning in mid-to late September. More moderate weather conditions suggested high corn and soybean yields and proportionally lower prices as confirmed in the August WASDE. There was some technical selling arising from geopolitical concerns and in response to revised projections for harvests in Brazil and Argentine. Contributory factors included ongoing disruption in shipping in the Red Sea and Panama Canal, carryover from the 2023 U.S. crop, export orders and the predicted ending stocks of corn and soybeans from the 2024 crop. The August WASDE Report contained updated values from the extensively revised June/July Reports. A small proportion of the 2024 corn crop is now mature. Concurrently a high proportion of the soybean crop is setting pods consistent with the five-year average but apparently with superior crop condition as compared to 2023. The transition from a neutral phase to a La Nina event is expected during the fourth quarter but will not affect the 2024 harvest. The September WASDE and USDA Survey and recent field evaluations should provide updated projections of yields, anticipated exports and adjusted prices for the 2024 crop.

At 11H00 CDT on August 29^th the CME corn quotation for September delivery was down 1.6 percent to 367 cents per bushel for September delivery. Corn price was influenced by acreage planted and yield, ethanol demand and the ending stock from the 2023 crop. Export orders for the current market year have increased in response to lower prices. Volumes and price are indirectly influenced by wheat availability as influenced by weather, the Black Sea wheat and corn crops and events in the Red Sea. Orders by China resumed at the end of the 2022-2023 market-year and have continued through mid-August stimulated recently by a decline in the Dollar Index albeit with increased ocean freight. Total exports for the current market year are 35.9 percent higher than for the corresponding week during the 2022-2023 year.

Soybeans were priced at 969 cents per bushel for September 2024 delivery, continuing below the 1,000 cent psychological threshold. Price was up 2.8 percent compared to 943 cents per bushel for September delivery last week. Higher prices were attributed to a projection of ending stock, despite more farm selling, but with recent higher export orders and projections of availability from the 2024 U.S., Brazil and Argentine harvests. Total exports for the current market year are 15.0 percent lower than for the corresponding week in the 2022-2023 year.

Soybean meal traded at $312 per ton for September delivery, up 1.6 percent from $307 per ton last week. Price was influenced by demand coupled with high crush volumes for consecutive months from December 2023 through July 2024 inclusive, although with a lower volume in June. Price will fluctuate to reflect the CME price for soybeans and the demand for biodiesel despite the adverse financial situation in this sector. The market previously responded to the increased 2023 crop and higher stocks together with projections for 2024 in the Revised August WASDE Reports updated from July.

On August 28^th at 20H00 WTI was $2.57 (+3.6 percent) higher from last week to $74.50. Price was influenced by geopolitical uncertainties and tensions in the Middle East with only moderate demand for crude as world economies and especially China have retracted. It is evident that U.S. production is a moderating influence on World price, attaining an average of 13.3 million barrels per day in July with ample reserves. There was an upward trend in WTI price during the week resulting in a range of $71.93 up to $74.90 with a peak of $77.42 per barrel on August 25^th.

The U.S. strategic reserve was down 0.85 million barrels to 425 million barrels with a storage capacity of 600 million barrels. Crude oil inventory at Cushing, OK. was down 2.4 percent to 27.5 million barrels last week. High U.S. production is constraining domestic and international prices. The recent decline in energy cost during the past month is reflected in deflation possibly influencing the FOMC in their anticipated lowering of the benchmark interest rate at the September Federal Reserve meeting.

Economic data released during the past quarter (Q2 GDP; PCE, Confidence, Productivity, Employment) confirm a generally stable to slowing economy but with a downward trajectory in inflation. Second Quarter GDP was revised upward to 3.0 percent from the previous projection of 2.8 percent. The data-driven Federal Reserve FOMC passed on lowering the benchmark rate on July 31^st. Federal Reserve Chair Jerome Powell and Reserve Bank

Governors are signaling at least one reduction in the 10-year rate during 2024 in the fall. The August 2^nd Non-farm Payrolls Report and labor data clearly indicated the danger of prolonging the high benchmark interest rate that is clearly impacting the U.S. economy. Qualified commentators are now suggesting that the Fed is “behind the curve” again on adjusting rates downward with a consensus for a 25 basis points and a hoped-for 50 basis points reduction at the September meeting. The markets responded favorably to the remarks by FOMC members and Chairman Powell at the Jackson

Hole Summit on August 23^rd almost confirming a reduction in the benchmark interest rate at the September Federal Reserve Meeting.

Macroeconomic U.S. factors:-

• Most economists in academia and the private sector are still confident of a “soft landing” for the economy and supported by the release of the revised Q2 2024 GDP and the August 21^st preliminary revision of 2023/2024 job creation. This data is coupled with recent economic parameters including the ECI, CPI and PPI and with fluctuation in bond rates. Annual inflation as measured by CPI declined from 8.9 percent in June 2022 to 2.9 percent in July 2024. This is in part a response to a series of 11 FOMC rate raises that curbed inflation and cooled the labor market but without precipitating evident unemployment. There is obvious stability in the bank sectors in both the U.S. and Europe. Lower energy prices are contributing to deflation.
• The Federal Reserve held the benchmark interest rate steady at the monthly FOMC meeting on July 31^st, the eighth sequential pause. The Federal Reserve commentary indicated that progress has been made in reducing the rate of inflation with an anticipated pivot at the September FOMC meeting with a reduction of at least 25 basis points. Chairman Powell in Congressional testimony and documented in FOMC minutes has indicated that decisions would be based on demonstrated progress in reducing inflation, as confirmed by a basket of key economic data, towards an annual 2.0 percent target by mid-2025 that now appears feasible.
• The August 14^th Bureau of Labor Statistics release of the July 2024 CPI confirmed a 0.2 percent increase from June, 0.1 percent below forecast. The annual increase of 2.9 percent was lower than the 3.0 percent projection and at a three-year low. The increase in the core value (excluding food and energy) was up 0.2 percent from June and 2.3 percent for the 12-month period, both down 0.1 percent from estimates. Food at home was up 1.1 percent year-over-year. The category of ‘meat, fish and poultry’ was collectively up 3.0 percent for the year with inflation in egg prices noted by observers. Food away from home was up 2.8 percent from July 2023 mainly when purchased at QSRs (+4.3 percent) compared to full service restaurants (+3. 8). Energy was up 1.1 percent from July 2023 with gasoline down 2.2 percent, electricity up 4.9 percent and natural gas up 1.5 percent. The shelter category was up 0.4 percent for the month and 5.1 percent over the past year. The macro trend is inclining towards reduced inflation but constrained by the shelter category that is detracting from deflation. The CPI heavily influences FOMC rate decisions.
• The August 29^th release by the Bureau of Economic Affairs documented the revised preliminary estimate of Q2 2024 GDP of 3.0 percent up from 2.8 percent, and above the Q1 value of 1.4 percent. The preliminary Q2 GDP value was influenced by higher consumer spending.
• The Department of Commerce reported a 1.0 percent increase in consumer spending in July after a 0.2 percent drop in June suggesting continued demand.
• On August 30th the Bureau of Economic Analysis released the July Personal Consumption and Expenditure Price Index. The core index (excluding food and energy) was up 0.2 percent from the previous month and 2.6 percent year-over-year. This was in line with estimates. The headline PCE is closely followed by the Federal Reserve and confirms persistent inflation holding above an annual target of 2.0 percent but demonstrfating a progressive decline.
• The July Producer Price Index for Final Demand (PPI) released on August 13^th was up 0.1 percent from June compared to an expectation of a 0.2 percent increase. This was a function of a 0.2 percent decrease in services but was offset by a 0.6 percent increase in goods. The PPI was up 2.2 percent over the past 12-months compared with 2.7 percent for the 12-month period through June. This is compared to a 6.4 percent increase in 2022. The core PPI value excluding volatile fuel and food, was up 0.3 percent from June.
• A Federal Reserve release on July 17^th confirmed that industrial production rose 0.4 percent in June. Capacity utilization was slightly higher at 78.8 percent, 0.9 percent below the long run 1972-2020 average.
• The August 26^th report by the Department of Commerce, Census Bureau confirmed that Durable Goods Ordered during July 2024 was sharply higher with a 9.9 percent increase against a forecast value of 4.0 percent, compared to a revised decline of 6.9 percent in June. The fall in this month was mainly due to the Transportation segment and specifically aircraft orders and parts that were down 20.5 percent. Excluding the Transportation component, new orders in July decreased by 0.2 percent compared to an increase of 0.1 percent in June. Shipments of durable goods in the non-defense category were down 0.4 percent in July from the previous month ultimately to be reflected in the quarterly GDP.
• The August 15^thS. Census Bureau release of the advanced estimate of retail and food sales data for July was up 1.0 percent from the revised downward change of -0.2 percent in June and up 2.7 percent over 12 months. Food service sales were up 0.3 percent from June and 3.4 percent from July 2023. Grocery store sales were up 1.0 percent in July compared to June and up 2.8 percent over the past 12-months. The Federal Reserve FOMC closely monitors retail sales as a measure of the trend in inflation.
• The August 1^st release by the Institute for Supply Management (ISM®) recorded a fall in the Manufacturing Index for July to 46.8 against an expected value of 48.8 and down from 48.5 in June. The July value was further below the bifurcation point of 50 percent between contraction and expansion in the economy. The Prices Index rose by 0.8 to 52.9 in July, denoting higher costs for production. U.S manufacturing continues to contract responding to prolonged high benchmark interest rates. The Services Index for July released on August 5^th was up from 48.8 to 51.4 in July.
• On July 31^st the U.S. Bureau of Labor Statistics reported a 0.9 percent increase in the Employment Cost Index (ECI) over the 2^nd quarter of 2024 against a consensus estimate of 1.0 percent. The year-over-year increase was 4.1 percent and with benefit costs up by 3.8 percent. The July ECI of 0.9 percent compares with a value of 0.9 percent for the 4^th quarter of 2023. The ECI is closely followed by the Federal Reserve FOMC and this data strengthened the possibility of a rate cut in September as suggested by Federal Reserve Chairman Powell.
• The August 27^th Consumer Confidence report prepared by The Conference Board for the period ending August 21^st, confirmed an increase to 103.3 from the revised July value of 101.9. The Present Situation Index measuring perceptions of current business conditions improved from 133.1 in July to 134.4. The Expectations Index rose from 81.1 to 82.5 in August, the second consecutive month above 80. Values below this threshold over consecutive months and with a downward trajectory are regarded as predictive of a recession.
• The August 18^th University of Michigan Preliminary Index of Consumer Sentiment for August increased for the first time in 5 months from a revised July value to 67.8.The Bloomberg forecast was 66.9. The Index was down 2.3 percent from the corresponding month in 2023. The Current Economic Index (60.9 down from 62.7 in July) suggests present concerns. The Index of Consumer Expectations (72.1 up from 68.8 in July) denotes an improvement in consumer sentiment influenced by an anticipation of rate cuts and lower inflation despite geopolitical issues. Inflation expectations 12-months hence were unchanged at 3.0 percent among the 500 surveyed.
• Non-farm payrolls added 114,000 in July, the lowest since January 2021 as documented by the Bureau of Labor Statistics in an August 2^nd This was far lower than the anticipated 175,000, and should be compared to the revised June value of 173,000. The decrease was attributed to workers in the private sector although reductions in health care and construction were constrained. The unemployment rate rose unexpectedly to 4.3 from 4.1 percent with 7.2 million unemployed and with 1.7 million in the long-term category. Real average hourly earnings during July showed a 0.2 percent increase over June to $35.07. Average hours worked increased 0.3 percent to 34.2 hours per week in July. Labor participation was almost unchanged at 62.7 percent in July. Wage rates increased 3.6 percent over 12-months, the lowest gain since June 2021. Wage rates are closely followed by the Federal Reserve FOMC.
• The August 21^st preliminary revision of job growth by the Bureau of Labor Statistics based on state data suggested that 818,000 fewer jobs were actually created from April 2023 through March 2024 than previously estimated. The discrepancy represented an apparent overstatement of 68,00 new jobs per month on average. Less than half of the overestimate was in the Professional and Business category (358,000); Leisure and Hospitality, (150,000) and Manufacturing (115,000). The preliminary revision that has mainly political implications should increase the possibility and extent of the anticipated reduction in benchmark rate at the September FOMC Meeting.
• The Bureau of Labor Statistics Job Openings and Labor Survey report released on July 30^th estimated 8.18 million job openings at the end of June, above the forecast of 8.00 million but lower than the revised May value of 8.23. The June job openings number was the lowest value since February 2021 and should be compared with the March 2022 value of 12.2 million job openings during COVID. The hiring rate was 3.4 percent (5.3 million hires); the June total separation rate, 3.2 percent (5.1 million); the quit rate 2.1 percent (3.2 million); and the layoff rate 0.9 percent, (1.5 million).
• The seasonally adjusted initial jobless claims figure of 231,000 released on August 29^th for the week ending August 24^th was down by 2,000 from the revised value for the previous week and a low for the month. The weekly value was slightly lower than the Reuters estimate of 232,000, settling market concern over a rapidly slowing economy. The four-week moving average was 231,500. The Bureau of Labor Statistics estimated 1.868 million, continuing claims for the week ending August 17^th (up 13,000 from last week), the most since November 27^th 2021 attaining 1.928 million. There is clear evidence from data over the past three months that the labor market is cooling as confirmed by Chairman Powell in Congressional testimony and release of downward revised figures for job creation. The jobs market is still tight, but with sporadic weekly fluctuation in new claims due to weather or scheduled plant shutdowns.
• The August 1^st Bureau of Labor Statistics report recorded a preliminary 2.3 percent increase in non-Farm Productivity for Q2 2024 up from 0.2 percent in Q1 2024. Labor cost increased by 0.9 percent compared to 4.0 percent for Q1 2024. Output was up by 3.3 percent and hours worked were 1.0 percent higher.
• The ADP® reported on July 31^st that private (excluding government data) payrolls increased by 122,000 in July, down 33,000 from the revised 155,000 in June and compared to the Dow Jones estimate of 150,000 jobs. The increase in employment was mostly in the transportation, utilities, construction and hospitality sectors with 61,000 positions combined. In contrast professional and business services (-37,000), information (-18,000) and manufacturing (-4,000) manufacturing categories lost jobs. Annual pay was up 4.8 percent year-over-year for ‘job-stayers’, and the lowest value since August 2021. The increase will not directly influence the probability of short-term changes in interest rate since the ADP® is regarded as less reliable by the FOMC than the Bureau of Labor Statistics Monthly non-farm payroll report to be considered next week.

FACTORS INFLUENCING COMMODITY PRICES

• Weather conditions in the Midwest over the past four weeks have not detracted from the size of the 2024 harvest. Unseasonal heat reduced growth and quality in early to late-June followed by heavy rain and flooding in mid-month. The August WASDE adjusted corn acreage to be harvested down by 0.5 percent and soybeans up by 1.2 percent. Projected yields for corn and soybeans were respectively increased by 1.2 and 2.3 percent from the July WASDE Report.

• Weather in areas of the World growing corn and oilseeds especially in Brazil and also Argentine provided favorable rain recently under the influence of a strong El Nino event that has now officially ended. (Downward pressure on prices). Harvesting in South America was advanced for the “new” crop of 2024 but was disrupted by flooding in the southern production states mainly affecting Rio Grande do Sul where up to 25 percent of crops may have been lost. Transition to a La Nina will result in the onset of drought in regions of South America during the 4^th quarter of 2024 onwards altering planting intentions in Argentine with more soybeans and less corn.

• Geopolitical considerations continue to move markets, especially in the Mideast and Baltic regions. Ongoing attacks on Ukraine port facilities have impacted prices of wheat, corn, oilseeds and vegetable oils. Loaded bulk vessels are sailing from Black Sea and Danube River ports using the ‘Humanitarian Corridor” to various destinations. This route is operational despite threats by the Russian Federation to mine the entrance to ports and deployment of airborne missiles.

• It is evident that both polarization in the closely divided chambers of Congress and intra-party conflict between and within both sides of the aisle in the House delayed adoption of appropriations bills. Passage of the 2023 Farm Bill will be contentious and is subject to a 12-month extension as a stop-gap measure. Progress on the 2023 Farm Bill has been impeded by contention over SNAP eligibility and other entitlements that collectively represent 75 percent of total expenditure. The August 2^nd downgrade of U.S. debt from AAA to AA+ by Fitch Ratings recognizes Congressional dysfunction. On November 10^th 2023 Moody’s downgraded U.S. credibility from ‘stable’ to ‘negative’ based on an inability to pass required fiscal legislation. After four Continuing Resolutions the House and Senate passed six appropriations bills including measures funding the FDA and USDA, avoiding a March 8^th partial shutdown of the Federal Government. Agreement was concluded on the remaining appropriations bills on March 23^rd maintaining Federal funding through October 2024, a rapidly approaching and pre-election deadline.

• The delayed 2023 Farm Bill is mired in conflict in both the House and Senate. Despite the respective markup of the House and Senate versions. There is no consensus on major issues comprising the magnitude of SNAP payments and eligibility, allocation of funds for climate remediation and requested price supports for crops. According to the non-partisan Congressional Budget Office, the House version contain provisions for farm supports that would be $31 billion higher than projected by the Committee, adding to the National debt. The retiring Chair of the Senate Agriculture Committee Sen. Debbie Stabenow (D-MI) is standing firm on maintaining both SNAP-WIC benefits and climate remediation even if the Farm Bill is delayed through to the 119^th In a recent statement Sen. Stabenow averred that the Farm Bill is “stuck” absent bipartisan concessions. This sentiment for delay is now supported by Glenn Thompson (R-PA) Chair of the House Agricultural Committee. There are now questions whether funding will be available for substantial crop support payments included in the House version. Former Secretary of Agriculture, Gov. Mike Johanns is doubtful that a farm Bill will be enacted by the 118^th Congress.

• The August 12^th WASDE #651 Projected both corn and soybean production parameters with near record harvests for the 2024 crop. There will be ample world availability of ingredients although inequitable distribution will result in shortages in some nations. Soybean exports will comprise 40.6 percent of the 2024 U.S. crop with a decrease in ending stock to 245 million bushels as projected in the August WASDE Report. The projection of corn exports suggests that exports will amount to 12.4 percent of the 2024 crop with ending stocks down 2.7 percent from July to 2,202 million bushels.

• Rabobank projected the soybean crop in Brazil at 153 million metric tons on April 4^th albeit before flooding. This value is higher than the projection by CONAB (the Soy production association in Brazil) at the midpoint of the soybean harvest, of 147 million metric tons (5,401 million bushels) down from a previous estimate of 155 million metric tons (5,695 million bushels). Exports of 100 million metric tons (3,674 million bushels). It is anticipated that Brazil will crush 56 million metric tons (2,057 million bushels). If CONAB is correct the harvest will be 7 million metric tons (269 million bushels) lower than the 2023 record crop. Brazil exported 7.0 million metric tons (257 million bushels) of soybeans to China over the first two months of 2024, double the quantity shipped to this nation over the corresponding two months in 2023.

• Corn production in Brazil for the 2023-2024 market year will attain 124 million metric tons (4,801 million bushels) from all three sequential harvests but down seven percent from the previous year. Brazil is projected to export of 54 million metric tons (2,125 million bushels). Argentine will produce 50 million metric tons of corn (1,968 million bushels), double compared to the previous year impacted by drought. (Lower prices in the future subject to favorable reports on crop progress and actual harvests)

• The 2024 wheat crop from Russia will be down 11.8 percent from 2023 to 80.7 million metric tons. This is due to severe weather during winter followed by drought. The deficit will place upward pressure on coarse grains

• The Dollar Index (DXY) closed at 101.0 on August 28^th, down 0.1 points from last week based on recent U.S. economic data suggesting a cut in benchmark interest rate in September despite declining bond rates. The DXY has ranged from 100.9 to 106.2 over the past 52 weeks. The dollar index influences timing and volume of export orders and indirectly the price of WTI crude.

• On August 28^th conversion of the CNY to the BRL was BRL 0.78, up CNY 0,01 from last week. The conversion of the CNY to the US$ was CNY 7.14, unchanged from the previous week despite an inconsequential 0.1 point fall in the Dollar Index.

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INGREDIENTS

COMMODITY PRICES

The following quotations for the months of delivery as indicated were posted by the CME at 11H00 CDT August 29^th 2024, compared with values at 11H00 CDT on August 22^nd 2024 (in parentheses): -

Changes in the price of corn, soybeans and soybean meal over five trading days this past week were:-

Corn: Sept. delivery quotation down 6 cents per bushel. (-1.6 percent)

Soybeans: Sept. delivery quotation up 26 cents per bushel (+2.8 percent)

Soybean Meal: Sept. delivery quotation up $5 per ton (+1.6 percent)

The CME spot prices for feedstuffs per short ton at 18H00 on August 28^th 2024 with prices for the previous week were:-

• Corn (ZC): $129 per ton, down $5 (-3.7 percent) from the previous week. 52-week range $135 to $181
• Soybean Meal (ZM): $312 per ton, down $1 per ton (-0.3 percent) from the previous week. 52-week range $330 to $461

• For each $1 per ton (2.8 cents/bushel) change in corn the cost of egg production would change by 0.11 cent per dozen

• For each $10 per ton change in the price of soybean meal the cost of egg production would change by 0.35 cent per dozen

• There was a 0.6 cent per dozen decrease in the nest-run production cost for eggs this past week, compared to August 22^nd due to an increase in the spot price of soybean meal offset by lower corn.

Values for common feed ingredients per short ton:-

• Meat and Bone Meal: According to the USDA National AnimalBy-product Feedstuffs Report on August 23^rd
• Porcine range: $350 to $375 with an average of $362 per ton, unchanged over the two previous weeks;
• Ruminant range: $320 to $345 per ton (Av. $333 per ton) (ex MN) unchanged from the previous week. Price varies according to plant and location
• Wheat Middlings: According to the USDA National Mill-Feeds andMiscellaneous Feedstuffs Report on August 23^rd, consignments from St. Louis, MO. and other Midwest locations: $80 to $95 per ton (Av. $89 per ton) down $1 per ton (-0.3 percent) from the previous week.

• DDGS: According to the National Grain and Oilseed Processor Feedstuffs Report on August 23^rd DDGS, (IA.): range was $115 to $135 (Av. $124 per ton), down $1 per ton (-0.8 percent) from last week reflecting stable to slightly lower corn prices. The average Pacific Northwest price was down $3 per ton to $233 per ton. Price varies according to plant and location and is expected to fluctuate with the price of corn

• Miscellaneous: University of Missouri Extension Service By-Product Feed Price Listing for August:-
• Bakery Meal, (MO & TX): $150 per ton.
• Rice Bran, (AR & CA): $120 to $200 per ton. (Av. $140).

The CME soybean price for September 2024 delivery at 11H00 CDT on August 29^th was up 2.8 percent compared to last week for September delivery to 969 cents per bushel. The current price of soybeans is a reflection of availability for domestic crushing to produce oil, consumption and export orders. Soybean meal was up 1.6 percent on the CME to $312 per ton for September 2024 delivery. Prices of soybeans are obviously influenced by projections of harvest in the three major producing nations in South America, the projected 2024 harvest in the U.S. coupled with domestic demand for soy oil, biodiesel and meal.

According to a release on August 15^th by the National Oilseed Processors Association, whose membership processes 95 percent of the U.S. crop, the soybean crush for July 2024 was up 4.1 percent from June to 182.9 percent million bushels of soybeans, and above the consensus estimate of 182.4 million bushels. The July crush was up 5.5 percent from July 2023 at 173.3 million bushels.

On August 28^th the CME spot price for soybean oil was up 0.1cents per lb. (+0.2 percent) from the previous week to 41.1 cents per lb. Prices for vegetable oils have fluctuated over a narrow range in past weeks but the decrease is attributed to lower demand. It is anticipated that 41 percent of U.S. soy oil was diverted from fuel to biodiesel during 2023 and this proportion will be exceeded in 2024 paralleling the situation in Brazil.

EXPORTS

The FAS Export Report for corn, released on August 29^th for the week ending August 22nd confirmed that outstanding export orders for corn amounted to 3.00 million metric tons (118.08 million bushels). Net orders for the past week within the 2023-2024 market year, amounted to 12,300 million metric tons (0.60 million bushels) with cancellations (‘washing’) normal in August. Shipments recorded during the past working week amounted to 1.05 million metric tons (41.29 million bushels). For the current market year to date cumulative export of 52.95 million metric tons (2,084 million bushels) is 35.9 percent higher compared to the equivalent week of the previous market year. For market year 2024-2025 outstanding orders have attained 9.42 million metric tons (370.73 million bushels) with 1.49 million metric tons (58.80 million bushels) ordered this past week

(Conversion 39.36 bushels per metric ton. Quantities in metric tons rounded to 0.1 million)

The FAS Export Report for soybeans covering the week ending August 22^nd reflecting market year 2023-2024, recorded outstanding export orders amounting to 1.73 million metric tons (36.74 million bushels). Net orders this past week attained a negative 0.14 million metric tons (-5.28 million bushels) due to cancellations. Shipments for the past working week attained 0.54 million metric tons (19.92 million bushels). For the current market year to date cumulative exports of 43.04 million metric tons (1,614 million bushels) are 15.0 percent lower compared to the equivalent week of the previous market year. Outstanding orders for the 2024-2025 market year amount to 10.15 million metric tons metric tons (373.24 million bushels) with 2.62 million tons (96.11 million bushels) ordered this past week.

 (Conversion 36.74 bushels per metric ton)

For the week ending August 22^nd outstanding orders for soybean meal and cake attained 1.82 million metric tons. Net orders this week for soybean meal and cake amounted to a net 21,200 metric tons with seasonal cancellations. During the past week 134,800 metric tons of meal and cake combined was shipped. The quantity of 12.04 million metric tons exported to date is 6.3 percent higher than the volume for the corresponding weeks of the previous market year. For the next market year outstanding sales have attained 2.68 million metric tons with a substantial 428,900 tons ordered this past week.

The July 12^th 2024 WASDE #651 projected:-

• Corn area planted for all purposes in 2024 (‘new crop’) will attain 90.7 million acres. According to the August WASDE, yield was projected at 183.1 bushels per acre with a resulting production of 15,147 million bushels with 2,073 million bushels as ending stock. The USDA lowered the average ex-farm price to 420 cents per bushel for the 2024 crop.
• Soybean area to be planted for 2024 will attain 87.1 million acres. According to the August WASDE, yield was predicted at 53.2 bushels per acre with production of 4,949 million bushels with 560 million bushels as ending stock. The USDA lowered the average season price to 1,080 cents per bushel.
• Crushers are expected to produce 57.08 million tons of soybean meal. Ending stocks will attain 400,000 tons. The USDA held the average season price at $330 per ton.
• Preliminary data from the August 2024 Pro Farmer crop tour suggest a corn yield of 181.1 bushels per acre approximately 2 bushels lower than the USDA projection in the August WASDE. The estimated yield for soybeans was 54.9 bushels per acre approximately 1.7 bushels higher than the August WASDE.

The preference for planting soybeans in 2024 was based on a favorable projection of the soy to corn benefit ratio despite lower prospects for exports but with higher domestic demand for crushing.

ENERGY

A recent U.S. Energy Information Administration (U.S. EIA) report estimated that fuel ethanol blending would average 1 million barrels per day in 2024, up 2.0 percent from 2023. For the week ending August 23^rd, 93.0 percent (95.3 percent for the previous week) of the U.S. ethanol fermentation volume was operational, based on the most recent January 2023 U.S. EIA capacity of 1,152 million barrels per day. The outlook for increased production will depend on higher domestic demand, from a seasonal increase in driving and the emergency waiver to dispense E15 blend during summer. There are limited prospects to increase the quantity exported comprising approximately 12 percent or the production equivalent of less than four days operation based on April shipments.

During May 2024 (the last month for which US Energy Information Administration data is available) ethanol exports were down 27.1 percent from the previous month to 157 million gallons (3.685 million barrels). Importing nations and regions of significance and their proportions of total volume (rounded) for the month included:- 38.6 percent to Canada; 15.1 percent to Europe; 9.2 percent to Central, South America and the Caribbean; 27.4 percent to Africa, Asia and the Middle East, predominantly the Philippines, South Korea and Singapore; 3.5 percent to Mexico. Brazil with a high demand for fuel ethanol placed a tariff on U.S. imports to protect a growing domestic industry based on sugar cane. This nation imported 5.1 percent of May shipments

According to the U.S. EIA, for the week ending August 23^rd 2024 the industry produced on average 1,071,000 barrels of ethanol per day, up 2.5 percent from the week ending August 16^th and continuing above the one million gallon per day benchmark.

On August 23^rd ethanol stock was unchanged from the previous week at 23.6 million barrels, an approximately 23-day reserve. This past week demonstrated lower demand for ethanol, given relative changes in the weekly production level (output down 2.5 percent and inventory unchanged percent for the most recent week)

Current Energy Prices:-

• The price of WTI was up $2.57 per barrel, (+3.6 percent) to $74.50 per barrel at 20H00 on August 28^th compared to the past week. The increase was despite the fall in inventory and reflects lower demand. WTI is up 1.8 percent year to date. Issues affecting price last week included an escalation in the conflict premium for Middle East crude and a decrease in output from Libya. Disruption of shipping in the Red Sea continues, resulting in an escalation in bulk and liquid sea-freight. Fewer reports of attacks is attributed to multinational deterrence of Houthis but mostly to a reduction in vessels transiting the waterway to and from the Suez Canal. At present one attacked and abandoned tanker is afire near the Bab el Mandeb Straight. Reduced demand from China is evident. Turbulence in oil markets at beginning of August was attributed to concern over U.S. employment and the World economy with an evident depression in the price of WTI. OPEC+ is responsible for 40 percent of world output, with projected increases in production during October. Reductions announced in mid-2023 were ignored by Russia, Iraq and Kazakhstan, with The Economist (June 1^st 2024) documenting widespread cheating within OPEC.

The ending stock of crude held at Cushing OK. on August 23^rd was down 2.4 percent from last week to 27.5 million barrels and 35.7 percent down from the previous high on June 23^rd 2023. Hydrocarbon energy contributed materially to inflation during the third quarter of 2023 but was an important factor in deflation over the fourth quarter through to the present. On August 23^rd Baker Hughes reported 585 rigs were in operation in the U.S. down one rig from August 16^th and compared to 632 during the corresponding week in 2023. Average U.S. crude production will average 13.3 million barrels per day in 2024.

• Ethanol quoted on the CME (EH) on August 28^th was priced at $2.16 per gallon, unchanged for months due to lack of trading activity. The 52-week range is $2.14 to $2.19 per gallon.

• On August 28^th RBOB gasoline traded on NASDAQ (RB) at $2.07 per gallon, up 2 cents (+1.0 percent) from the previous week. Despite the higher price this past week, additional escalation may become more evident in CME trading and ultimately at the pump as demand increases through the remainder of summer. The 52-week range for RBOB gasoline is $1.98 to $2.80.

• The AAA national average regular grade gasoline price was $3.36 per gallon on August 28^th, down 4 cents (-1.2 percent) from last week. Gasoline is now $1.20 per gallon more expensive than ethanol but has a 63 percent higher BTU rating. Future stability in fuel cost is anticipated given the prospects for a continuing low benchmark WTI price.

• The AAA national average diesel price was $3.71 per gallon on August 28^th down 3 cents (-0.8 percent) from the previous week but with prospects for future increases due to an extremely low national stock and reduced refinery operation. Increases are currently restrained by a decline in the trucking industry.

• CME Henry Hub natural gas was priced at $1.91 per MM BTU on August 28^th down 28 cents (-12.5 percent) from the previous week on lower demand attributed to milder weather and lower industrial use. Gas prices are depressed following an Administration embargo on new LNG export terminals. Warm weather has depressed demand

EXPORT HISTORY

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipated that soybean imports by China would attain 95.0 million metric tons during the 2020-2021 market year but in reality only 60.3 million tons was shipped through August 2021.

For the 2022-2023 market year net export sales of soybeans were down 5.6 million metric tons (206 million bushels) compared to the previous market year with cumulative exports of 51.5 million metric tons (1,893 million bushels)

For Market year 2022-2023 ending September 2023, a record 13.2 million metric tons of soybean meal and cake was exported valued at $7 Billion. Expansion in exports was attributed to orders from The E.U., Asia (Viet Nam) and Latin America. Crush volume was driven by the demand for soy oil to produce biodiesel fuel.

During calendar 2023, 46.0 million metric tons (1,810 million bushels) of corn were exported from the U.S., valued at $13,140 million. The top five importers with their respective values expressed as a percentage were:- Mexico, 40.9; Japan, 15.8; China, 12.5; Colombia, 8.6 and Canada, 5.1.

During calendar 2023, 49.0 million metric tons (1,800 million bushels) of soybeans were exported from the U.S., valued at $29,910 million. The top five importers with their respective values expressed as a percentage were:- China, 50.6; E.U., 12.0; Mexico, 9.3; Japan, 4.3; Indonesia, 4.1; Taiwan, 2.0 and Egypt, 1.6.

COMMENTS

Subscribers are referred to the preliminary USDA projection for 2024 harvests included in the August 12^th WASDE #651, under the STATISTICS tab.

Either more intense action by Ukraine, a negotiated peace treaty with concessions to the Russian Federation, or their combination will be required to restore unrestricted shipping in the Black Sea. Increasing passage along the costal-route (“Humanitarian Corridor”) has allowed sea-transport of commodities since early August to supply Asia and Africa. Pre-invasion Ukraine exported 6 million tons of grains and oilseeds each month. After a drastic reduction exports in 2023, by July 2024 volume increased to 4.2 million metric tons. Over the past 12-months about 2,050 vessels transported 39 metric tons of agricultural commodities with the Port of Odessa now handling 80 percent of exports. 

Increased multinational naval activity has commenced in the Bab al-Mandeb Strait at the southern end of the Red Sea to restore shipping through the Red Sea and the Suez Canal that carried 15 percent of world sea-freight. Nearly all shipping lines including Maersk of Denmark, Hapag-Lloyd of Germany and CMA of France have suspended transit of the Suez Canal and the Red Sea awaiting a clear resolution of the danger from missiles. Traffic through the Suez Canal is down over 70 percent from mid-September 2023 creating a fiscal problem for Egypt. Restoring free passage will require either destruction of Houthi bases, radar and command installations and mobile launching equipment on the soil of Yemen or action by Iran to constrain their proxy forces. This will be a long process.