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.