Weeekly Commodity Market Update: Soybean crush sets record as global production and stocks shift.

Brownfield Ag News

This week Will and Ben take a look at the shifting soybean picture and record soy crush.

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

- May 2024 corn down $.04 at $4.31

- December 2024 corn down $.04 at $4.69

- May 2024 soybeans down $.23 at $11.58

- November 2024 soybeans down $.17 at $11.67

- May soybean oil down 2.43 cents at 45.47 cents/lb

- May soybean meal up $2.50 at $338.50/short ton

- May 2024 wheat down $.14 at $5.51

- July 2024 wheat down $.13 at $5.67

- May WTI Crude Oil down $.73 at $84.88/barrel

Weekly Highlights

· The Consumer Price Index, a measure of inflation, rose to 3.5% in March, higher than expectation and the third consecutive month of increasing inflation. Shelter and energy costs drove the increase. Following the report, traders pushed the first expected Federal Funds rate cut out to September compared to June moments before the report.

· The Producer Price Index, another measure of inflation, rose 2.1% from March 2023, which was the largest monthly year over year gain in nearly a year. This was slightly down from an expectation of 2.2%. Month over month prices were up 0.2% compared to up 0.6% in February and pre-report expectations of up 0.3%.

· US crude oil stocks excluding the strategic petroleum reserve were up 245 million gallons from the week prior. Similarly, US gasoline and distillate stocks were up on lower demand and higher imports. Crude oil prices have eased from their highs experienced last week on easing geopolitical tensions but the risk is still present.

· Ethanol production pulled back 310 million gallons- down 5 million from the week prior. Ethanol margins decreased to end March but have started to move higher again despite near record ethanol stock levels. Margins remain positive for ethanol producers.

· USDA lowered US corn ending stocks to 2.122 down 50 million bushels on the month but not as much as the 70-million-bushel drop expected. Demand was increased 25 million bushels for both corn exports and ethanol use.

· USDA increased soybean ending stocks 25 million bushels on the month and 23 million more than what was expected after cuts to exports, seed and residual more than overcorrect for lower imports.

· Brazil’s CONAB reduced both total corn production and soybean production for the country 1.8 and 0.5 million metric tons respectively. Both are noticeably lower than USDA’s April numbers.

· Open interest of Chicago grains and oilseeds was down for wheats (-4.1%), corn (-2.8%), soybean oil (-1.8%), soybean meal (-2.0%), cotton (-11.1%) and rice (-5.9%) while being up slightly for soybeans (+1.0%).

· Managed money traders continued to expand their short positions of corn (3,998) and soybeans (1,054). Corn and soybean managed money contracts pulled back from their record short positions but are rebuilding them again. Traders decreased their net short of Chicago Wheats 1,239 contracts.

· Last week Bloomberg reported Chinese importers canceled “four or five cargos” of Ukrainian corn booked for delivery in an effort to support local prices ahead of planting.

· Export sales for week ending March 4th were bearish and pulled the market lower. Corn sales of 12.8 million bushels were the lowest of the marketing year and fell well below expectations. Soybean and wheat sales were also on the low end of expectations.

· Export inspections with the exception of wheats were flat to lower and uninspiring. The reported soybean volume was the lowest since Mid-September as volumes continue to move seasonally lower. Wheat exports exceeded all pre-report expectations.

· The National Oilseed Processors Association reported their members crushed a record high 196.4 million bushels in March. This was 1.2 million bushels below the average trade estimate ahead of the report. The soybean oil stocks volume was on the top end of expectations and the fifth consecutive month of volumes exceeding the average trade estimate.

· As expected, planting picked up in the western corn belt last week. Six percent of the US corn crop is planted compared to 3% last week and an average pace of 5%. The first soybean planting progress came in at 3% up from an average of 1%. Cotton and rice were 8% and 44% respectively.

· The winter wheat conditions rating slipped just slightly to 346 down from 348 last week (a perfect score is 500). However, this remains well ahead of 273 last year.

Topics:

- Market recap

- Sideways to lower commodity trading

- Corn stocks estimates drop

- Soybean stocks estimates rise

- Soybean crush sets all-time record

- Brazilian production shifts

- Reports to watch

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