Fed cuts interest rates, fuel prices drop | Weekly Commodity Market Update

Brownfield Ag News

This week Will and Ben cover the Fed's interest rate cut, falling fuel prices, preview USDA's September grain stocks report and more.

Market recap (changes on week as of Monday's close):

» December 2024 corn up $.03 at $4.13

» December 2025 corn up $.02 at $4.50

» November 2024 soybeans up $.35 at $10.39

» November 2025 soybeans up $.22 at $10.79

» December soybean oil down 2.73 cents at 41.84 cents/lb

» December soybean meal up $4.90 at $328.70/short ton

» December 2024 wheat up $.04 at $5.82

» July 2025 wheat up $.04 at $6.17

» December 2024 cotton up 62 cents at 73.44 cents/lb

» December 2025 cotton up 63 cents at 73.07 cents/lb

» October WTI Crude Oil up $0.91 at $69.93/barrel

Weekly highlights:

The Federal Reserve cut their short-term interest rate for the first time since March 2020 by 50 basis point. The target rate is now 4.75-5.00 percent.

US energy stocks were mixed last week- down 68 million gallons for crude oil stocks, but slightly up (basically flat) for gasoline stocks, distillate fuels and ethanol stocks. Gasoline demand was up 4% on the week and from the same week the previous year.

US ethanol production pulled back to 308 million gallons- down from 318 million gallons the week prior but up from 288 million gallons produced during the week last year. Cumulative corn used for ethanol is up 11 million bushels from the year prior.

US Cattle on Feed as of September 1, were estimated at 11.198 million head- 100.6% of last year. The trade was estimating 100.9%. Placements of 98.6% were down from the 99.0% expected while marketing were also down 96.4% compared to 96.6% expected.

Open interest in Chicago commodities were up week over week for corn (4.9%), soybeans (+2.3%), soybean oil (+2.8%), soybean meal (1.6%), and cotton (+2.0%), while down for wheats (-0.3%) and rough rice (-3.3%).

Money managers were net buyers of Chicago wheats (+5,388 contracts), soybeans (+8,186 contracts), soybean meal (+2,710 contracts), cotton (+18,974 contracts) and rough rice (+372). They were net sellers of corn (-2,680) and soybean oil (-2,971 contracts).

It was a mixed week for export sales of grains and oilseeds. Corn sales of 33.4 million bushels were a little bearish by being quite a bit below the volumes we had been experiencing, soybean sales of 64.2 million bushels exceeded all expectations, while wheat sales of 9.1 million bushels fell below all expectations. There were large sales of soybean oil to Mexico and Canada. If they actually get shipped this marketing year- the current soybean oil export estimate is too low.

US grain and oilseed export inspections were bullish on the week. Corn, soybeans, milo, and combined wheats were all up week over week. Corn and wheat shipments of 43.4 and 26.1 million bushels, respectively, exceeded all pre-report expectations.

US corn conditions ratings remained at 65% good to excellent across the US last week- with the trade anticipating a 1%-point decline. Corn harvest is 14%- a little slower than the 17% expected.

US soybean ratings were also unchanged at 64% good to excellent this week- with the trade anticipating a 1%-point decline for soybeans as well. Soybean harvest is 13% complete matching expectations.

Topics:

» Market recap

» Interest rate cut

» Drop in energy prices

» Grain Stocks report preview

» Major U.S. port worker strike pending

» Reports to watch

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