How continued inflation pressure impacts agriculture | Weekly Commodity Market Update
This week Will and Ben look at paths forward for interest rates and breakdown the soybean complex.
Learn more about what's happening in the agriculture markets here: https://brownfieldagnews.com/markets/
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Market recap (changes on week as of Monday's close):
➡︎ July 2024 corn down $.12 at $4.60
➡︎ December 2024 corn down $.11 at $4.84
➡︎ July 2024 soybeans up $.29 at $12.48
➡︎ November 2024 soybeans up $.04 at $12.16
➡︎ July soybean oil up 1.17 cents at 46.32 cents/lb
➡︎ July soybean meal up $12.50 at $374.10/short ton
➡︎ July 2024 wheat up $.01 at $6.88
➡︎ July WTI Crude Oil up $.70 at $79.30/barrel
Weekly highlights:
The Producer Price Index rose 0.5% month over month in April- up from expectations of 0.3%.
The Consumer Price Index rose 0.3% in April compared to March and 3.4% year over year- the values were in line with expectations and down from previous measures.
The Biden Administration hiked tariffs on $18 billion in Chinese products including everything from electric vehicles to batteries to critical minerals and medical products.
US energy stocks decreased on the week. Stocks of crude oil decreased 105 million gallons with stocks of gasoline down 10 million gallons and distillate stocks down just slightly by 2 million gallons. Gasoline demand increased 1% but remains below levels the last two years.
US ethanol production increased 10 million gallons to 294 million gallons on the week and the highest same week volume since 2019. Corn used for ethanol this marketing year is up 3.9% from the same period last year. Ethanol stocks increased 12 million gallons after falling five consecutive weeks.
The April NOPA report was bearish to the soybean market as the reported crush volume of 166.0 million bushels fell below all pre-report trade expectations.
Open interest positions of Chicago futures and options positions were up for Chicago wheats (+7.3%), corn (+4.2%), soybeans (+1.2%), soybean meal (+1.5%), and cotton (+4.4%) while down for rough rice (-0.4%) and soybean oil (-0.2%).
Managed money traders continued their short coverings of corn and wheat in Chicago wheats they purchased 20,855 futures and options positions and in corn they bought back 31,342 net contracts for a four week total of 208,399 contracts. Managed money traders were net sellers of 1,212 contracts increasing the now normal net short.
Weekly grain and oilseed export sales were bearish on the week. Corn, soybeans, grain sorghum, and soybean oil were all down week over week. 2023/24 soybean sales at 9.8 million bushels fell below all expectations while corn was on the lower end of expectations.
Last week’s grain and oilseed export inspections were mixed- well above all expectations for corn and below expectations for soybeans and wheat. For soybeans, the 6.8 million bushel volume was a marketing year low and for wheat the 7.6 million bushel volume was the lowest since November.
Crop planting progress was strong last week given the short planting window. Corn planting increased to 70% from 49%. Farmers bested the average week over week gain of 17%. Average is 71% and the trade was expecting 68%. Soybean planting at 52% was up from 17% and compares to 49% on average, cotton planting was up 11% to 44% - matching average pace.
The winter wheat conditions rating was down just one point to 333 (perfect is 500) and compares to 278 this time last year.
The Kansas wheat tour estimated average yields at 46.5 bushels per acre- the highest since 2021. The estimate is also up from a five-year average of 42.4 bushel per acre and up from USDA’s May estimate of 38.0 bushels per acre.
Topics:
➡︎ Market recap
➡︎ Wheat rally
➡︎ Bearish soybean crush report
➡︎ Price index increases
➡︎ Fund behavior
➡︎ Reports to watch
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