Brownfield’s Weekly Commodity update featuring former OSU Extension Ag Economist Ben Brown. This week, Will and Ben discuss ethanol production and continued interest rate pressure.
Topics:
– Market recap
– Corn demand, ethanol production up
– Export sales remain unimpressive
– Federal Reserve action moving forward
– U.S. crop conditions
– Reports to watch
Market recap (Changes on week as of Monday’s close):
– September corn down $.49 at $5.04
– December 2023 corn down $.43 at $5.13
– September soybeans down $.83 at $13.70
– November soybeans down $.75 at $13.31
– September soybean oil down 5.10 cents at 63.11 cents/lb
– September soybean meal down $6.60 at $423.80/short ton
– September 2023 wheat 80 $.80 at $6.65
– July 2024 wheat down $.73 at $6.91
– June WTI Crude Oil up $3.51 at $81.88/barrel
Weekly Highlights
• Finally, one part of US corn demand is showing some life. US weekly ethanol production rose to a 28-month high last week at 322 million gallons.
• The Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday, citing still elevated inflation as a rationale for what is now the highest US central bank policy rate in 16 years.
• Weekly US agricultural export sales were neutral last week with corn, soybeans and collective wheats up week over week. Sorghum was down week over week. Everything was within expectations.
• Open interest positions were down for corn (-2.8%), soybeans (-0.5%), soybean oil (-6.6%), and soybean meal (-0.1%) while being up for cotton (+11.5%), and rough rice (+15.3%).
• In the wake of renewed Russian attacks in Ukraine money managers bought back 73,529 positions of Chicago corn giving the commodity a net long while producers and merchants were sellers of 47,896 contracts. Managed money traders added 24,925 positions to their already long position while producers and merchants sold another 33,410 positions.
• US agricultural export inspections were on the higher end of all expectations and relatively strong compared to recent weeks. Wheat exports exceeded all pre-report expectations.
• US crop conditions largely fell more than market traders had expected this week. Corn and soybeans were down 2% while spring wheat was down 7% all compared to an expected 1% week over week decline, cotton fell 5%.
• 80% of the US winter wheat crop has been harvested compared to 81% at this time last year and a three-year average of 83%.