Weekly Commodity Market Update: Recap of USDA's February global estimates
This week Will and Ben review USDA's most recent global supply and demand estimates and what they mean for U.S. agriculture.
Market recap (Changes on week as of Monday's close):
- March 2024 corn down $0.10 at $4.32
- December 2024 corn down $.07 $4.70
- March 2024 soybeans down $.03 at $11.93
- November 2024 soybeans down $.08 at $11.68
- March soybean oil up 2.11 cents at 47.44 cents/lb
- March soybean meal down $14.60 at $346.50/short ton
- March 2024 wheat up $.03 at $5.93
- July 2024 wheat down $.08 at $5.95
- March WTI Crude Oil up $4.17 at $77.01/barrel
Weekly Highlights
· The Consumer Price Index came in hotter than expected for the month at 3.1% year over year compared to expectations of 2.9%.
· Weekly CTFC data showed that open interest in Chicago Futures and Options continues to increase up 3.4% for Chicago wheats, 1.6% for Chicago corn, and 3.7% for Chicago soybeans.
· Similarly, managed money traders continue to sell off corn, soybean and wheat positions. Traders sold another 1,962 of wheat contracts, 17,493 corn contracts, and 22,053 soybean contracts. These moves increased the net short positions held across the board. The net short in corn is just 2,300 contracts from hitting -300,000 net short positions and close to the all time net short set in April 2019.
· Crude oil stocks rose by 5.5 million barrels last week but remain 4% below levels we typically we see this time of year. Conversely gasoline stocks and distillate stocks fell 3.1 and 3.2 million barrels, respectively. Ethanol stocks were up slightly to 24.8 million barrels.
· Ethanol production continues to return from the low experienced during the January cold period at 1,033,000 barrels. Corn used for ethanol production is running 108 million bushels above the same last years pace and 65 million bushels above seasonal pace needed to hit USDA’s current target.
· USDA’s February Supply and Demand Estimates were relatively bearish to the market but ended the day with some support. Ending stocks for US soybeans of 315 million bushels were above all pre-report expectations. Globally- cuts to Brazilian soybeans were not as large as expected. Corn and wheat estimates for the month were rather neutral.
· US ag export sales were once again bearish for soybeans and slightly supportive to everything else. Soybean sales came in at 12.5 million bushels- below all pre-report expectations. Corn and wheat sales were both in line with expectations and up week over week.
· Ukraine’s Farm Ministry estimated 2024 corn planting down 9% from last year based on their spring survey data.
· Grain and oilseed export inspections this week were all within pre-report expectations, but on the top end. Soybean export inspections were slightly a surprise as last week’s volume was revised 12 million bushels higher. Export inspection volumes to date are up 160 million bushels for corn while down 332 million bushels for soybeans.
Topics:
- Market recap
- Inflation higher than expected
- Global corn and soybeans carryout
- South American production estimates
- Reports to watch
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