Weekly Market Update 6-20-24

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

Trivia

1. What year did women get the right to vote in the US?

2. Which fruit is the most popular and consumed worldwide?

Answers at the bottom.

Market News

UKRAINE SUSPENDS FOOD PRICES: Ukraine's government plans to establish minimum prices for the exports of certain agricultural commodities. This move is expected to reduce grain exports and result in financial losses for farmers. Ukraine’s government drew up the necessary calculations to set the minimum prices; however, on Wednesday, it was stated that the new rules wouldn’t be until August at the earliest. The UGA traders' union has called for suspending this scheme, saying that the minimum prices would apply to wheat, corn, sunflower oil, soybeans, rapeseed, and other major agricultural commodities. The UGA has also expressed concerns that these minimum export prices could jeopardize Ukraine's exports, disrupt the forward contracting system, and create uncertainty for exporters. This would essentially turn Ukraine's agricultural market into a spot market, leading to unpredictability and hindering farmers' ability to manage risks through forward contracts linked to global exchange prices.

BP NEWS: BP has agreed to purchase grain trader Bunge's 50% stake in the Brazilian sugar and ethanol joint venture, BP Bunge Bioenergia, for $1.4 billion. The acquisition aims to capitalize on the increasing demand for low-carbon biofuels and is expected to be completed by the end of 2024. This move comes amidst investor concerns over BP's strategy, with S&P Global revising BP's credit outlook due to slower-than-expected debt reduction. BP emphasized that the acquisition is expected to meet its return threshold for bioenergy by more than 15% and will fall within its existing annual spending framework of around $16 billion. Additionally, BP has decided to scale back plans for developing new biofuels projects, pausing two projects and assessing three others. BP stated that these changes align with BP’s priorities of driving focus into the business and growing shareholder returns.

CROP PROGRESS REPORT: Despite drops in ratings, fall crops remain are still looking pretty good across the country. Corn ratings fell 2% from last week to 72% good-to-excellent nationwide. The trade was expecting a 1% drop. This crop is running circles around the 64% good-to-excellent 5-year average. Corn planting is estimated at 95% finished and 93% emerged. Soybean conditions also were down 2% to 70% good-to-excellent – again, the trade was looking for a 1% decrease here. The 5-year average for soybeans at this point in the season is 64% good-to-excellent. The crop is pegged at 93% planted. While the nearby forecasts aren’t perfect, the majority of the Corn Belt is still looking good. Winter wheat harvest is reported at 27% complete, up 15% week-on-week and ahead of trade estimates of 22% complete and 13% ahead of the 5-year average.

EXPORT INSPECTIONS: We appear to be on track with USDA inspection estimates this week, with a total 13.8 million bushels of wheat crop reported as inspected. Once again this week, the majority of the HRW exports will be traveling to Mexico by rail and the second largest portion will be making its way to Thailand. This week, it appears that HRS wheat will be making its way to the Philippines, Malaysia, and Thailand, with Mexico once again taking the largest portion of the United States SRW.  White wheat this week will be traveling to Ecuador and it seems durum wheat is finally making its way onto the USDA inspection chart, with 0.7 million bushels traveling to Morocco. A total of 50.7 million bushels of corn was reported as inspected this week; favoring the higher side of USDA estimates. Again, the largest portion of exported corn traveling to Mexico and Japan. Soybean exports were up this week, favoring the upper side of USDA estimates, with 12.3 million bushels exported. Milo inspections slowed down this week, with only 0.1 million bushels making the list, down significantly from last week’s reported inspections.

No Export Sales this week with the Juneteenth holiday.

Weather: Today is looking sunny and breezy, with temperatures near 86°F and winds coming out of the south at 21 to 24 mph, with gusts as high as 34 mph. Tonight looks mostly clear with a high around 66°F, winds still coming out of the south at 14 to 18 mph. Friday is predicted to be mostly sunny with a high near 89°F and temperatures cooling off slightly to 71°F during the evening. This weekend also appears to be mostly sunny, with high temperatures in the upper 90s both Saturday and Sunday, and overnight hours expected in the high 60s throughout this weekend. For the remainder of the week, we can expect to see clear and sunny skies with temperatures in the low 100s. Tuesday night seems to be our only chance of rain this week, with a 20% chance of scattered showers and thunderstorms through the overnight hours.
 

Trivia Answers

1. 1920
2. Tomato