Weekly Commodity Market Update: Alternative U.S. export markets beyond China
This week Will and Ben breakdown the shifting ag trade market and where U.S. opportunities exist.
Market recap (Changes on week as of Monday's close):
- May 2024 corn up $.10 at $4.49
- December 2024 corn flat at $4.72
- July 2024 soybeans up $.06 at $11.82
- November 2024 soybeans up $.07 at $11.78
- July soybean oil down 1.29 cents at 44.37 cents/lb
- July soybean meal up $9.50 at $354.30/short ton
- July 2024 wheat up $.21 at $6.08
- July WTI Crude Oil up $0.19 at $82.09/barrel
Weekly Highlights
· Personal consumption expenditure data came in a little higher than expected this month at 2.7% growth in March compared to 2.5% in February and above expectations of 2.6%.
· Stocks of US crude oil, gasoline, and ethanol were lower week over week with distillate stocks higher. Crude oil stocks fell 267 million gallons ending a string of four consecutive weekly increases totaling 628 million gallons. Gasoline stocks fell 27 million gallons. Distillate stocks made a counter seasonal move higher of 68 million gallons.
· US ethanol production pulled back again this week to 280 million gallons after falling sharply the week prior. The volume compares to 284 million gallons during the same week last year. Ethanol stocks were down 15 million gallons, but remain seasonally high.
· Open interest of Chicago grains and oilseeds was down for wheats (-0.4%), soybeans (-6.2%), soybean oil (-4.1%), and soybean meal (-0.3%) while being up slightly for corn (+0.2%), cotton (+2.0%) and rice (+2.2%).
· As anticipated, disaggregated CFTC reporting showed that managed money traders covered short positions over the week ending April 23rd. Managed money traders decreased their short position in Chicago wheats 21,242 positions, they also decreased their net short of Chicago corn positions 41,024 positions and their net short of Chicago soybean positions 18,861 positions.
· Corn export sales of 51.2 million bushels were well above expectations toping out at 35.4 million and the strongest of the 2023/24 marketing year. Soybean export sales of 7.7 million bushels were below the most bearish pre-report estimate of 11 million bushels. Grain sorghum sales of 1.5 million bushels and wheat sales of 3 million bushes were both up week over week.
· US grain and oilseed export inspections were down week over week for corn, soybeans, and grain sorghum, but up for combined wheat classes. All commodities were within expectations. Although the corn, soybean, and grain sorghum volumes were seasonally low.
· For the third week in a row- US corn planting progress doubled. At 27% complete, the US corn planting pace exceeds 23% this same time last year and 22% on average, but matched trader expectations. Last year we saw a 23-percentage point increase, which seems unlikely this year. Soybean planting increased 10% percentage points to 18%- ahead of the 5-year average of 10% and 1 point above trader expectations.
· The winter wheat conditions rating dropped just slightly to 334 down 2 points from last week, but still ahead of the 270 last year at this time. Spring wheat plantings are the fastest in 3 years.
Topics:
- Market recap
- Sideways commodities
- Continued weak soybean exports
- Alternatives to Chinese export market
- Looking ahead to USDA's GREET model
- Reports to watch
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