Lower grain and oilseed prices and a weaker U.S. dollar are tailwinds for U.S. export sales
This week there are five key reports to watch that could have significant impacts on commodity markets the week of August 26, 2024. This Farms.com column tracks key events in commodity marketing impacting the agriculture industry! The series of article shares issues to watch the following week, issues that may have an impact on commodity prices in the coming weeks.
By Devin Lashley, Farms.com Intern
1.The USDA Crop Progress Report comes out on Monday, August 26th, and will likely show a mild decline in crop quality. Recently, the weather across the Midwest excluding Ohio has been quite good, though that is likely to change as major growing regions across all the U.S. will experience a net drying as time goes on.
Ohio has already been negatively affected, but that is likely to make only a minor impact on the rest of the Midwest up until September when rains are likely to return in a significant way.
2. The U.S. PCE Index Data (inflation measure) comes out on Friday, August 30th and will likely show a continued reduction in inflation. Trade estimates PCE inflation is to be 2.1 percent, down from 2.4 percent in the previous survey. The current quarter core PCE inflation is revised downward to 2.4 percent.
The probability of a 50-basis point Fed rate cut in September is 26.5 percent, while a 25-basis point cut stands at 73.5 percent, according to Fed Watch Tool figures.
Lower-than-expected inflation increases the chances of U.S. Fed interest rate cuts this year. U.S. jobless claims come out on Thursday, August 29th, and the report might be a mixed bag. The most recent employment report came in below expectations.
3. Key Company Earnings Reports come out on Wednesday, August 28th. Nvidia’s quarterly earnings will be particularly important for the U.S. stock market. Trade expects a positive report as demand for AI is still high, with companies still spending billions for Nvidia’s chips.
4. The Weekly U.S. Export Sales numbers come out on Thursday, August 29th. Weekly USDA grain and oilseed export sales have been showing significant improvement in recent weeks. Lower grain and oilseed prices and a weaker U.S. dollar are tailwinds for U.S. export sales.
5. In Canada, Statistics Canada will release its Model-Based Estimates of Principal Field Crops, on Wednesday, August 28. Canada's total area for field crops decreased slightly this year. Increased areas for pulses and specialty crops offset declines in wheat, oilseeds, and coarse grains. Western Canada's growing conditions have improved but are still not ideal with the prairies still in drought. Yield expectations have risen for wheat, corn, and pulses, assuming normal weather.
For daily information and updates on agriculture commodity marketing and price risk management for North American farmers, producers, and agribusiness visit the Farms.com Risk Management Website to subscribe to the program.