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.