Weekly Commodity Market Update: Expected farm income challenges could lead to farm consolidation.
This week Will and Ben discuss how interest rates and acreage expectations are guiding the market.
Market recap (Changes on week as of Monday's close):
- May 2024 corn flat at $4.36
- December 2024 corn up $.03 at $4.73
- May 2024 soybeans up $.14 at $12.01
- November 2024 soybeans up $.12 at $11.91
- May soybean oil flat at 48.71 cents/lb
- May soybean meal up $7.50 at $339.40/short ton
- May 2024 wheat up $.09 at $5.51
- July 2024 wheat up $.09 at $5.67
- May WTI Crude Oil flat at $81.49/barrel
Weekly Highlights
· The US market remains strong. The home builder confidence index reached its highest level since July 2023 while housing starts, building permits and existing home sales all exceeded expectations. With higher interest rates, all-cash buyers made up a third of homes sales- the largest since 2011. New home sales 0.3% in February.
· The Federal Reserve’s Open Market Committee unanimously decided to hold interest rats at 5.25-5.50 percent but reiterated that it still planned to cut interest rates three times in 2024.
· Key outlook measures released quarterly by the Federal Reserve moved in opposite directions for rate cuts. Unemployment was revised down and inflation index was revised up compared to December.
· US crude oil stocks decreased 82 million gallons on the week. Gasoline stocks were also down 139 million gallons with seven straight weeks of declines drawing down stocks nearly 1 billion gallons. Distillate stocks were up 26 million gallons.
· Ethanol production increased to 308 million gallons on the week- up 7 million gallons from the week before. Domestic gasoline consumption was down 3% on the week. With the larger ethanol production and softer gasoline consumption, ethanol stocks increased just slightly by 10 million gallons.
· US export sales of grain and oilseeds were mixed- corn, grain sorghum, and wheat sales were down week over week, but soybean sales were up. Everything was within expectations even though there were net cancelations of wheats driven by soft red winter and white.
· Weekly grain and oilseed export inspections were again supportive this week with 48.3 million bushels of corn, 28.2 million bushels of soybeans and 11.6 million bushels of wheats. Everything was in the range of expectations, but soybeans continue to run a little stronger than we saw at this time last year.
Topics:
- Market recap
- Commodities finding support
- Federal Reserve planning on interest cuts
- Corn, soybean acreage
- USDA grain stocks & prospective plantings preview
- Reports to watch
See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.
