Weekly Market Update 2/13/25

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

Trivia

1. The iconic “NFL on Fox” theme song was partially inspired by which superhero?

2. The Baltimore Ravens are named in honor of a poem by which famous writer?

Answers at the bottom.

Market News

INTEREST RATE MARKET: Inflation was widespread in January, affecting various sectors. The Consumer Price Index noted a 0.5% increase, higher than the 0.3% median estimate. Core inflation surprised many at 0.4%, with only 5 of 73 forecasters predicting such a rise and none expecting the headline inflation to reach 0.5%. Last month, four of the six major grocery categories saw price increases. Egg prices soared by 15.2%, the most significant spike since June 2015, driving two-thirds of food inflation. Gas prices rose by 1.8%, and fuel oil increased by 6.2%, contributing to a 1.1% rise in energy prices. In the services sector, shelter costs showed a positive trend, with owners' equivalent rent rising 0.3% monthly, lowering the annual increase from 4.8% to 4.6%. Shelter costs now represent 30% of overall inflation. Car and home insurance also contributed to inflation and seasonal factor revisions that may explain spikes in smaller categories, but they are not currently significant for the interest rate market. Higher inflation remains a concern, with rate cut expectations now pushed to December. The market believes the Federal Reserve will keep its current stance. Chairman Powell noted that the policy is aimed at higher inflation and lower employment, but this report may challenge that view. Keeping floating-rate debt unhedged increases risks due to factors like tariffs and government spending cuts. A balanced strategy of 50% floating and 50% fixed-rate debt appears to be the safest way to maintain interest rate risk neutrality.
 

EXPORT SALES: Seen mixed volumes again this week compared to last week’s values. Old crop corn sales totaled 64.9 million bushels and N/C corn sales totaled 13.8 million bushels this week; a decent amount of forward contracting of N/C corn in comparison to those sales last week. Corn sales this week sit above the running 10-week average, currently calculated at 48.5 million bushels. Corn now sits 8% above the marketing year-to-date sales relative to the seasonal pace needed to reach USDA targets. Soybean sales totaled 6.8 million bushels this week; more than a 50% decrease in sales versus last week’s report. New crop soybean sales were reported at 0.9 million bushels this week. Old crop wheat sales totaled 20.9 million bushels sold and 1.4 million bushels of N/C sales were reported. A total of 2.1 million bushels of O/C milo was sold and no N/C milo sales were reported; now leaving us 31% below the marketing year-to-date sales relative to the seasonal pace needed to reach USDA targets.
 

EXPORT INSPECTIONS: Wheat inspections for exports totaled 19.7 million bushels this week, an increase of 10.4 million bushels from last week’s values at 9.3 million bushels; quite the rollercoaster of numbers from week’s previous. Of the total quantity of wheat bushels inspected for exports this week, 6.9 million bushels are set for exports to the Philippines, 2.4 million bushels to Mexico, 2.3 million bushels to Japan, and 0.6 million bushels to Taiwan. Corn export inspections were reported at 52.5 million bushels. Total corn inspections this week are 6.9 million bushels above the running 10-week average calculated by the USDA, a steady increase seen over the last couple weeks. A total of 38.3 million bushels of soybeans were inspected for exports this week. Of the total 38.3 million bushels inspected, 20.4 million bushels are destined for export markets in China, followed by 5.9 million bushels to Egypt, 2.5 million bushels to Germany, and 2.2 million bushels to Mexico. A total of only 0.1 million bushels of milo were inspected for exports, as of reported totals the week of 2/6/2025.

FEBRUARY WASDE RECAP: The report was mostly a snoozer on Tuesday, with USDA largely leaving balance sheets unchanged. Your by-commodity recaps are below.

WHEAT: Wheat was the only commodity that saw a net change to U.S. numbers, with a 4 million bushel increase to food demand – which pulled carryout down the same 4 million bushels.

CORN: Overall, nothing to write home about here. Old crop corn saw an increase to feed demand that was offset by a reduction to food/seed/industrial usage. 2024/25 U.S. balance sheets were unchanged. South American production saw some reductions, with Brazil and Argentina production numbers down by 1mmt respectively. World carryout was down from 293.34 MMT to 290.32 MMT.

BEANS: USDA punted on the soybean balance sheet, leaving U.S. numbers unchanged. South American production was a mixed bag, with Argentinean production down 3 MMT to 49 MMT, while Brazil was untouched at a record-breaking 169 MMT crop. World balance sheets saw a decrease in carryout from 128.38 MMT to 124.34 MMT.

WEATHER: Starting off your Thursday forecast, the National Weather Service in Dodge City, KS issued a Hazardous Weather Outlook today through next Wednesday, February 19, 2025. This is for portions of central, south central, southwest, and west central KS with freezing cold temperatures and chances for additional snow Monday evening through Wednesday morning. We started off today’s weather with bitter cold temperatures at -11°F with wind chills as low as -17°F, the afternoon looking sunny with a high temperature near 29°F. Overnight, increasing cloud coverage brings a low temperature around 16°F, with winds coming out of the south/southeast and gusts as high as 36 mph. Friday is mostly cloudy with a high near 60°F and wind gusts coming out of the south as high as 41 mph. Throughout the evening, there’s a 30% chance of precipitation beginning as rain before midnight before transitioning into snow between midnight and 3am. All day Saturday looks like we hold a 20% chance of snow, with partly sunny skies throughout the day and a high near 34°F, before dipping into single digits again overnight. Sunday’s forecast is looking to be relatively quiet; sunny skies and a high of 35°F with overnight temperatures around 18°F. The first part of next week brings us yet another chance of snow. Monday and Wednesday bring a 30% chance of new snowfall accumulation and Tuesday looks like a 60% chance of snow. Temperatures range from the low-20s to the low-50s throughout the day. Overnight, low temperatures predicted around 0 and 6°F.
 

Trivia Answers

1. Batman

2. Edgar Allan Poe