Weekly Commodity Market Update

Brownfield’s Weekly Commodity update featuring former OSU Extension Ag Economist Ben Brown.

This Week’s Topics:

  • Market recap
  • Soybean market continues to find support
  • Potential acreage shifts
  • Planting discussion
  • Fed to meet, interest rates in balance
  • Reports to watch

U.S. corn acreage could come in higher than expected

Market recap (Changes on week as of Monday’s close):
– May 2024 corn down $0.04 at $4.36
– December 2024 corn down $.02 at $4.70
– May 2024 soybeans up $.07 at $11.87
– November 2024 soybeans up $.07 at $11.80
– May soybean oil up 2.11 cents at 48.70 cents/lb
– May soybean meal down $6.20 at $331.90/short ton
– May 2024 wheat down $.04 at $5.42
– July 2024 wheat down $.02 at $5.57
– May WTI Crude Oil up $4.46 at $81.60/barrel

Weekly Highlights

  • Initial jobless claims last week of 209,000 were down from expectations of 218,000 and 210,000 the week prior.
  • The Producer Price Index jumped 0.6% in February- the largest monthly gain since last August. This was above expectations of 0.3% rise in PPI.
  • Weekly CTFC data showed that open interest in Chicago Futures and Options was up across the board for the second consecutive week. Chicago Wheats (1.7%), corn (2.4%) and beans (2.6%).
  • Managed money traders increased their net short of Chicago Wheats 7,992 contracts while also decreasing their large net short of Chicago Corn 40,867 contracts and Chicago soybeans 16,862 contracts. Net gains for corn and soybean oil were much larger than expected by daily trade estimate, with soybeans close, while Chicago wheat more negative than expected.
  • US Crude oil stocks decreased for the first time in seven weeks- falling just slightly by 65 million gallons. Gasoline stocks fell much further- down 238 million gallons to extend the tightening to six consecutive weeks. Distillate fuel stocks were up just slightly by 37 million gallons. Gasoline demand was flat on the week after being up 6% week prior.
  • Ethanol production pulled back to 301 million gallons produced on the week- down 10 million gallons. It was also the lowest volume in 2 ½ months. It is expected 101.4 million bushels of corn were used in the process. With flat gasoline consumption and slightly lower ethanol production- ethanol stocks pulled back just slightly.
  • The National Oilseed Processors Association reported their members crushed 186.2 million bushels of soybeans in February, a new monthly record for February and above the most bullish pre-report estimate. Soybean oil use in February of 2,027 million pounds was also a new record for the month.
  • US export sales last week were all within expectations but showed weekly increases for corn and soybean meal with weekly decreases for soybeans, soybean oil, grain sorghum, and wheats. Corn was on the higher end of expectations with soybeans on the lower end.
  • Weekly US grain and oilseed export inspections were mixed last week. Everything was within expectations but corn was on the high side of expectations while wheats were on the low side.
  • USDA reported a two-point increase in Kansas winter wheat ratings this week, to 55% good/excellent, TX up 2% to 46% good to excellent; OK ratings feel four points to 61% good to excellent while CO rose 9% to 65% good to excellent.

2024 Small Farm Conference

The deadline to register for the 2024 Small Farm Conference and Trade Show is approaching on March 28th,  we don’t want you to miss out on this great opportunity.

Register today at: https://go.osu.edu/2024osusmallfarmconference

Conference Details: https://u.osu.edu/gofarmohio/programs/new-and-small-farm-conference/

New Independent Contractor Rule Coming Soon!

By: Jeffrey K. Lewis, OSU Extension

The U.S. Department of Labor (“DOL”) has introduced a new independent contractor rule, aiming to provide clarity and guidance for both employers and workers. The classification of workers as employees or independent contractors has become increasingly complex in recent years, resembling an endless carousel ride for many businesses, particularly those in the agricultural sector that frequently hire part-time and seasonal help. The DOL’s new rule, published under the Fair Labor Standards Act of 1938 (“FLSA”), seeks to put an end to this perpetual uncertainty surrounding worker classification once and for all.

Background
The FLSA establishes federal standards for overtime pay, minimum wage, and child labor. Ohio law explicitly aligns its interpretation of the term “employee” with that of the FLSA for wage and hour purposes. For the FLSA to apply to an agricultural employer, an employment relationship must be established. This entails determining whether a worker is classified as an employee or an independent contractor.

However, the FLSA itself is silent on how to exactly distinguish an independent contractor from an employee. So, for years the DOL relied on the court system to develop the standard for determining whether a worker should be classified as an employee or an independent contractor. The court system developed an “economic realities test” to help determine whether an employment relationship exists with a worker. The economic realities test is a totality of the circumstances test – which means all factors should be weighed evenly – and relies on six factors. These factors are:

  1. The nature and degree of control over the work;
  2. The individual’s opportunity for profit or loss;
  3. The permanency of the work relationship;
  4. Whether the work being performed is an integral part of the Employer’s business;
  5. The worker’s investment in facilities and equipment; and
  6. Skill and initiative.

For decades courts and the DOL have applied these factors, or a similar variation of them, to help define employee and independent contractor under the FLSA. However, courts across the country have applied the factors inconsistently and have given certain factors different degrees of weight.

Continue reading

Weekly Commodity Market Update

Brownfield’s Weekly Commodity update featuring former OSU Extension Ag Economist Ben Brown.

This Week’s Topics:

  • Market recap
  • Crop market continues general fall
  • Added trade support?
  • USDA Ag Outlook Forum bearish
  • Reports to watch

This week Will and Ben track falling crop prices and where they might be headed.
Market recap (Changes on week as of Monday’s close):

  • March 2024 corn down $0.12 at $4.20
  • December 2024 corn down $.08 $4.62
  • March 2024 soybeans down $.08 at $11.85
  • November 2024 soybeans down $.09 at $11.59
  • March soybean oil down 1.45 cents at 45.99 cents/lb.
  • March soybean meal up $3.50 at $350.00/short ton
  • March 2024 wheat down $.27 at $5.66
  • July 2024 wheat down $.29 at $5.66
  • March WTI Crude Oil up $.86 at $77.97/barrel

Weekly Highlights

  • Two separate measures of inflation came in hotter than anticipated. The Consumer Price Index came in at 3.1% year over year vs expectations of 2.9%. Similarly, the Producer Price Index came in at 0.9% month over month vs expectations of 0.1% increase and -0.1% in January.
  • Weekly CTFC data showed that open interest in Chicago Futures and Options was down 2.3% for Chicago Wheats, up 2.1% for corn and up 1.4% for soybeans.
  • Managed money traders continue to sell Chicago corn and soybean contracts. The net short for corn increased 16,597 contracts which took them over the philosophical threshold of 300,000 contracts. The record was set in April 2019 at just over 322,000 contracts. Managed money was also a seller of Chicago soybeans by 4,200 contracts to 134,500 contracts. The record for soybeans was May 2019 at just under 190,000 contracts.
  • Crude oil stocks excluding the strategic petroleum reserve increased 505 million gallons for the week leaving them 7% below last year. Gasoline stocks declined 153 million gallons but 2% higher than this same week last year. Distillate stocks were down 80 million gallons and are 5% higher than last year. West Texas Intermediate Oil prices are creeping back up to $80 per barrel after reaching the low $70 range in early February.
  • Ethanol production increased again this week to 318 million gallons. Corn used for ethanol production exceed the same period last year by 97 million bushels. Ethanol stocks increased 43 million gallons.
  • The National Oilseed Processors Association reported soybean crush numbers that disappointed the market. Soybean crush for January came in at 185.8 million bushels- four million less than the trade had anticipated, although still a January monthly record. Even though soybean crush was lower, soybean oil stocks also grew and were above all expectations implying January soybean oil use was rather bearish.
  • At USDA’s annual Agricultural Outlook Forum, the agency released their first balance sheets for 2024/25 marketing year. The numbers were bearish to new crop supplies but not as bearish as many in the industry were anticipating.
  • US grain and oilseed export sales were mixed last week. For corn- export sales of 51.4 million bushels were a 9-week high while soybean sales of 13.0 million bushels and wheat sales of 12.8 million bushels were both on the low end of expectations. There were net cancelations of grain sorghum sales amounting to 100,000 bushels for the current year and cancelations of all 2.4 million bushels of 2024/25 sales. There are no grain sorghum commitments for next year at this point after reaching 7.5 million bushels a few weeks ago.

Ohio Farmland Leasing Update webinar is March 1

As we enter the 2024 crop season, it’s time for an update on economic and legal information that affects Ohio farmland leasing. Join our Farm Office team members on March 1, 2024 from 10 a.m. until noon for a special edition of our Farm Office Live webinars.  In the Ohio Farmland Leasing Update, we’ll share the latest information on these leasing topics:

  • Cash Rent Outlook – Key Issues and Survey Data
  • Negotiating Capital Improvements on Leased Farmland
  • Dealing with Conservation Practices in a Farmland Lease
  • Executing and Recording Farm Leases
  • Legal updates and new Farmland Leasing Resources

Our speakers for the webinar include:

  • Barry Ward, Leader, OSU Production Business Management
  • Peggy Hall, Attorney, OSU Agricultural & Resource Law Program
  • Robert Moore, Attorney, OSU Agricultural & Resource Law Program

There is no cost to attend the Ohio Farmland Leasing Update, but registration is necessary unless you’re already registered for our Farm Office Live webinars.  To register, visit go.osu.edu/register4fol.

Weekly Commodity Market Update

Brownfield’s Weekly Commodity update featuring former OSU Extension Ag Economist Ben Brown.

This Week’s Topics:

  • Market recap
  • Penciling out profit
  • South American production
  • South American second crop planting
  • Managing production cost
  • Corn acreage to fall
  • Reports to watch

This week Will and Ben look at falling crop prices across the board and what it’ll take to stabilize.

Market recap (Changes on week as of Monday’s close):

  • March 2024 corn down $0.05 at $4.40
  • December 2024 corn down $.01 $4.74
  • March 2024 soybeans down $.29 at $11.94
  •  November 2024 soybeans down $.17 at $11.80
  • March soybean oil down 2.61 cents at 45.55 cents/lb
    – March soybean meal down $1.50 at $354.30/short ton
  • March 2024 wheat down $.06 at $5.93
  • July 2024 wheat down $.03 at $6.09
  • March WTI Crude Oil up $2.13 at $76.78/barrel

Weekly Highlights

  • US Gross Domestic Product grew 3.3% in the fourth quarter of 2023- down from the 4.9% in the third quarter but well above the 2% growth expected. Taking out the sharp recovery after the pandemic in 2020. The 3rd and 4th quarters are the strongest two quarters back-to-back since 2014.
  • Core Inflation at 0.2 month over month was right inline with expectations and core inflation year over year of 2.6% was as expected.
  • The housing market continues to run hot- with New home sales at 664,000 up from last month and expectations and pending home sales up to a huge number of 8.3% in December- the largest number since June 2020.
  • It was another fairly risky week for US commodities. Open interest positions increased across the board for Chicago wheat (2.7%), Corn (5.7%), soybeans (6.5%), soybean oil (3.7%), soybean meal (3.4%), cotton (10.7%), and rough rice (0.4%).
  • Producers and Merchants increased their net positions of corn adding to the small net long while also adding net positions of soybeans shrinking their small net short. Producers and Merchants sold off net wheat contracts adding to the net short in Chicago wheat.
  • Managed money traders sold off another 4,743 contracts of Chicago corn while selling 15,045 contracts of soybeans to increase the net short there as well. Managed accounts added 26,518 contracts of cotton futures to take the small net short into a net long.
  • US crude oil stocks excluding the strategic petroleum reserve were down another 388 million gallons while gasoline stocks increased 206 million gallons on a 5% week over week reduction in gasoline demand.
  • As expected, US ethanol production pulled back to 240 million gallons- down from 310 million gallons the week prior due to the cold snap in the US. Even with the drastic drop in ethanol production-ethanol stocks increased due to the drop in gasoline demand and blending.
  • Exports sales were lower this week nearly across the board and bearish for soybeans. Only SRW wheat posted week over week gains.
  • Weekly grain and oilseed export inspections for the week were neutral for corn and soybeans, while bearish for wheats and grain sorghum. Corn, HRW and HRS wheats were the only commodities up week over week.