2. Keep an eye on wheat futures. The Institute for Agricultural Market Studies (IKAR) has been lowering the 2024 Russian whaet crop from 93 to 83.5 mmt - down 9.5 mmt. If the weather remains cold and dry next week look for wheat to trade another leg higher. Its a race to the bottom as to how low production will go. Look out for any headline news about a Russian wheat export ban like 2010 that sent wheat futures surging for 23 months. It would be very friendly 2024 wheat futures.
3. The USDA Crop progress report will be released Tuesday May 28th and will likely show continued issues with the 2024 U.S. planting progress, as it remains wet into the coming weekend. With 30 million acres of corn left to be planted and 650% of soybeans insurance dates of May 25th coming and going again. Can trendline yields in U.S. soybeans and corn produce at 52 and 181 bpa respectively? The first crop condition report from the USADA in the 1st week of June, it could show crop condition issues.
4. The U.S. Drought Monitor will be released Thursday May 30th and will likely show continued erasure of droughts across growing regions in the Midwest. Continued rains that have delayed planting progress are positive signs for droughts across Iowa, Missouri, Kentucky, and Wisconsin. Severe droughts have been eliminated across the Midwest with more improvement expected, with only small pockets of moderate droughts remaining in states like Iowa and Wisconsin. However, in the past decade in wet years farmers produce smaller crops, and in dry years farmers tend to do much better.
5. The Personal Consumption Expenditures (PCE) Price Index will be released next week on Friday May 31st and will likely show a decrease in inflation. The index broadly measuring inflation sat at 2.8% last report and will likely show a decrease to 2.6%, this is still above the U.S. Feds required 2.0% to cut rates, but it will provide a better picture as to when we can expect rate cuts and should the PCE continue dropping at that rate we should be able to expect cuts by the end of the summer.
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