Brownfield’s Weekly Commodity update featuring former OSU Extension Ag Economist Ben Brown.
This Week’s Topics:
- Market recap
- Consumer sentiment at two-year high
- Oilseed outlook
- Managed money profit taking
- Managing when to sell
- Record December soybean crush
- Reports to watch
This week Will and Ben discuss marketing crops around profit taking
Market recap (Changes on week as of Monday’s close):
- March 2024 corn down $0.02 at $4.45
- December 2024 corn down $.06 $4.75
- March 2024 soybeans down $.04 at $12.23
- November 2024 soybeans down $.04 at $11.97
- March soybean oil down 2.19 cents at 48.16 cents/lb
- March soybean meal down $7.50 at $355.80/short ton
- March 2024 wheat flat at $5.96
- July 2024 wheat down $.07 at $6.12
- March WTI Crude Oil up $2.02 at $74.67/barrel
Weekly Highlights
- The December National Oilseed Processors Report showed their members crushed a record 195.3 million bushels of soybeans in December- up from 189 in November and 177.5 million last December. Cumulative soybean crush is running 40 million bushels of last years pace with USDA expected an 88-million-bushel year over year increase.
- The US economy continues to show resistance. The Home Builder Confidence Index reported a reading of 44 increased from 39 in December and analysist expectations of 39. This signal that while contracting its not contracting as fast. Lower mortgage rates boosted confidence.
- Consumer sentiment jumped to the highest level since July 2021 reflecting optimism regarding slowing inflation and rising incomes.
- The US labor market remains tight as jobless claims fall under 200,000 and lowest level in 16 months. Employers may be adding fewer workers but they are holding on to the ones they have and paying higher wages.
- It was a fairly risk on week for US commodities. Open interest positions increased for Chicago wheat (5.7%), Corn (8.1%), soybeans (4.9%), soybean oil (5.6%), soybean meal (6.2%), and cotton (2.7%) while rough rice fell (2.1%).
- Producers and merchants increased their futures and options positions of Chicago corn more than 25,000 contracts with managed money increasing their net short position 29,819 contracts. The managed money net short for corn is quickly reaching a resistance level close to the largest net short in 15 years.
- Managed money for soybeans also increased the net short 45.5 thousand contracts.
- US crude oil stocks excluding the strategic petroleum reserve were down 105 million gallons while gasoline stocks increased 125 million gallons on a slight week over week reduction in gasoline demand.
- US ethanol production pulled back to 310 million gallons but well above the 296 million gallons last year. Ethanol stocks have built to a 10 year high. The cold weather will likely slow US ethanol production over the next several weeks. Higher natural gas prices and lower ethanol prices are cutting into ethanol plant margins.
- Export sales were bullish for corn and wheat last week while neutral for beans and grain sorghum. Sales were higher week over week across the board.
- Weekly grain and oilseed export inspections were rather neutral. Corn, soybeans, and grain sorghum were all down week over week, while total wheats were slightly higher.
- Friday’s USDA Cattle on Feed as of January 1 report showed all cattle on feed at 102.1% of last year.