Weekly Commodity Market Update: Potential market impact of coming Biden administration fuel policy
Market recap (Changes on week as of Monday's close):
- May 2024 corn up $0.09 at $4.30
- December 2024 corn up $.06 $4.63
- May 2024 soybeans up $.10 at $11.55
- November 2024 soybeans up $.17 at $11.46
- May soybean oil up 0.15 cents at 45.17 cents/lb
- May soybean meal up $4.90 at $333.50/short ton
- May 2024 wheat down $.10 at $5.64
- July 2024 wheat down $.10 at $5.67
- May WTI Crude Oil up $1.08 at $78.17/barrel
Weekly Highlights
· Economically initial jobless claims of 215,000 came in a little higher than expectations of 210,00 and the 202,000 the week prior.
· The Federal Reserves preferred measure of inflation the PCE index rose to 0.3% in January as expected- up from 0.1% in December.
· Weekly CTFC data showed that open interest in Chicago Futures and Options was down across the board for Chicago Wheats (-6.6%), corn (-7.7%) and beans (-11.1%).
· Managed money positions of Chicago futures and options was mixed: for feed grains like wheat traders reduced their new short by buying back 11,983 contracts. The same was true for corn with managed money funds buying back 47,474 contracts to reduce the next short below -300,000 contracts again. It was also the first net buy for corn this calendar year. Managed money funds continued to sell off soybeans with another -23,976 net contracts.
· Crop Insurance projected prices for 2024 spring crops are finalized. Corn projected price of $4.66 is 27% lower than last year while the soybean projected price of $11.55 is 16% lower than 2023 levels.
· US Crude oil stocks increased for the fifth consecutive week while oil prices rallied on news of further OPEC+ production cuts. Gasoline stocks fell another 119 million gallons to extend the trend to a fourth week. Distillate fuel stocks were down 21 million gallons. Gasoline demand was up 3% on the week but 7% below the same week last year.
· Ethanol production decreased just slightly to 317 million gallons down from 319 million gallons last week. Ethanol stocks increased 22 million gallons on the slightly smaller production. Corn used for ethanol production exceed the same period last year by 4% matching the increase USDA anticipates for the year.
· US grain and oilseed export sales were all within expectations for the current marketing year. Corn, grain sorghum, soybean, and wheat sales were all up week over week. While the volumes increased on the week they still are not bullish.
· US grain and oilseed export inspections were all within expectations. Soybean export inspections, while still at a seasonal deficit, have surprisingly experienced higher than expected volumes lately given the lack of fresh sales and logistical competition from South America.
Topics:
- Market recap
- Crop market levels out
- Managing input costs
- Coming Biden administration fuel policy
- Reports to watch
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