Weekly Market Update 4-11-24

Here is your weekly market update from the Garden City Co-op Grain Origination Team.

Trivia

Answers at the bottom.

Market News

Export Sales/Inspections: This morning's sales of corn were not as good as expected, with only 12.8 million bushels sold, which fell short of the trade estimates. It's normal to see a decline in sales at this time of the year. However, we must keep up with the pace required to meet the USDA estimate, which is becoming increasingly challenging. New crop sales for corn bushels were 400,000, while soybeans reported 11.2 million bushels sold with no new crop sales. On a positive note, we saw 3.0 million bushels sold in wheat and 10.1 million in new crop sales. Milo bushels were 200,000 bushels for this week’s sales.  The corn export inspections report provided some support with another week of more robust shipments, totaling 55.9 million bushels shipped this past week. Most of these bushels were shipped to Mexico and Japan. Although this is the fourth consecutive week where shipments have come in at or above the 5-year average, they are still only above pace to meet the USDA estimate by 22.8 million bushels, which isn’t enough to make me bullish about demand. Wheat that was inspected was 18.3 million bushels, on the higher end of estimates, soybeans 17.8 million bushels, barely meeting estimates, milo showed 2.7 million bushels inspected and shipped for China.

Interest market update: Yesterday’s inflation report suggests that there may not be any cuts this year. Unfortunately, the report was not very good. The headline: consumer price index up 0.4% in March, maintaining the same pace from the beginning of 2024.  The annual change is now up to 3.5% from 3.2%. Core CPI is up 0.4%, and the yearly figure is also unchanged at 3.8%. However, the Fed expects to cut rates three times this year with their goal of 2%. However, with the current rate exceeding expectations MoM, it is unlikely that there will be a cut. Food prices increased by 0.1% last month, whereas energy gasoline rose by 6.4% in March, offsetting declines in natural gas and fuel oil. The national average price for gasoline per gallon has reached $3.62, which is a 6-month high. Goods are now back to deflation, with a 1.1% decrease for used cars/trucks and a 0.2% decrease for new vehicles. Shelter costs have continued to increase by 0.4%, which is consistent with prior months. The standout from yesterday's report was car insurance, up by another 0.9% from last month and 22.2% up from a year ago. As Powell had previously reported, the federal government has announced that cuts may be expected in July.

WASDE Recap: A rather uneventful WASDE report today. With this report in the rear view mirror, the market is back to watching forecasts as planting commences across the country.
CORN: US corn carryout was lowered slightly from the March estimate to 2.122 billion bushels, with no changes on the supply side, but an increase in feed and ethanol consumption. While lower than the March estimate, the carryout number did come in on the higher side of what the trade was expecting. World carryout was also lowered from the March estimate, but was higher than the average trade guess. It came in at 318.28 MMT. USDA left Brazilian production unchanged and lowered Argentina’s production by 1mmy to 55.
SOYBEANS: Soybeans did see a slight change on the supply side of the equation, with imports lowered by 5 million bushels. However, decreases in demand more than offset this – with exports reduced by 20 million and seed/residual use down 10 million. U.S. carryout increased by 25 million to 340 million bushels, while the trade was only looking for a slight increase. World carryout remained status quo, changing very little from March. It was pegged at 114.22 MMT. South American production was unchanged from the March estimates.
WHEAT: Imports were down 5 million bushels, but feed and residual use were cut by 30 million bushels. This resulted in a net increase in US carryout to 698 million bushels, which was higher than the March report and slightly higher than the average trade guess. World carryout was lowered slightly from the March report, coming in at 258.27 MMT.
MILO: USDA continued their pattern of leaving milo carryout unchanged by making offsetting adjustments. Food/seed/industrial use was lowered by 5 million bushels, while feed demand was increased by 5 million bushels. Carryout remains at 22 million bushels.


Weather

Warm, breezy weather remains on tap for the next week, with weekend highs running up into the 90s. Monday is forecasted to be particularly windy, with SSW winds of 20mph and a chance for extreme severe weather in the evening. Most of our draw area is now categorized as abnormally dry on the drought monitor, with high winds last weekend doing a number to dry out topsoil. A rain would certainly be welcome with planting on the horizon and large wheat in the field.
 

Trivia Answers

1.  A DeLorean
2.  William Henry Harrison