BASIC & RECENT MARKET INFO

Tidbits The U.S. crude oil inventory increased by 4.29 million barrels in the reporting week ending 9 May, a sharp reversal from the prior week's 4.49 million-barrel draw, according to the American Petroleum Institute. The markets expected a 2.4 million-barrel decline. None-the-less, West Texas Intermediate (WTI) crude oil futures were up $1.72 a barrel yesterday. The Bureau of Labor Statistics yesterday morning reported the annual inflation rate at the retail level declined

Highlights The biggest news piece from yesterday’s S&D was the USDA increased corn exports by 100 million bushels. As many expected, the corn for feed was reduced by 25 million bushels, so the carryout was reduced by 75 million bushels, which took the carryout from a 37 day supply to a 35 day supply. The market expected a 30 million bushel reduction in the corn carryout. USDA did not change any of the corn or soybean production numbers for Brazil, Argentina, or Paraguay. Stud

Tidbits The U.S. Producer Price Index (PPI) was reported yesterday morning. It is the measure of inflation at the wholesale level. It was slightly higher than expected at 0.4% for the month of November. Unemployment claims were 21,000 higher than expected at 242,000. The market continues to expect an interest rate cut Wednesday even though the inflation numbers do not justify it. The market has priced in a 98% chance of a 25 basis points cut next week to 4.25-4.50% on the Fed

Tidbits U.S. inflation at the retail level increased 0.3% in November, the most in 7 months, but the Federal Reserve is still expected to cut interest rates next week to support job growth. However, the decline in the inflation rate has come to an end and the Federal Reserve's inflation goal of 2% per year is well below the November annual rate of 3.6%. Yesterday, the Bank of Canada reduced its base interest by 50 basis points (one-half percent) to 3.25%. Just a few months

Highlights The US CPI data (inflation at retail level) for August +0.2% as expected. For the past 12 months, the CPI was up 2.5%, slightly less than the expected 2.6%. However, what the government calls the “core” CPI was up 0.3% in August, which was more than the expected 0.2% and core inflation was up 3.2% for the past 12 months, which was as expected, but well above the Fed’s target of 2%. As a result of the CPI numbers, the interest rate markets show the odds of a half

Highlights DTN lead analyst, Todd Hultman, said on August 12 during a webinar about S&D report: “Speculators in the corn market have been encouraged to hold onto their short positions by the Federal Reserve Board, which is trying to keep prices in check by increasing interest rates… You would think we’re getting down to the lows here somewhere, but technically of course we’re not seeing any signs of that just yet.” Here is Sean Pratt’s summary for the webinar. The Consumer

Highlights The Producer Price Index for July was reported yesterday +0.1%, better than the expected +0.2%. As a result, the dollar was sharply weaker because interest rates are more likely to be reduced sooner rather than later. A lower dollar makes US products cheaper for foreign buyers. Usually, crude oil is higher when the dollar is weaker, but it is not working that way this week. CBOT commodities used to be supported by a sharply weaker dollar, but not in 2024 and yester

Highlights August options expire tomorrow, Friday, July 26. First notice day for August futures is July 31. Yesterday morning, the US Government reported a revision of the second quarter GDP of +2.8%; the market expected a +2.1%. The first quarter GDP had been disappointing at +1.4%. Personal Consumption Expenditures (PCE) is a measure of consumer spending on goods and services among households. For the second quarter, PCE rate was up 2.6%, down from 3.4% in the first quart

Highlights The USDA lowered old corn carryout 120 million bushels below the lowest estimate by increasing feed use and exports both by 75 million bushels each. Old crop corn imports were increased by 5 million so the carryout was lowered by 145 million to 1,877 million bushels. New crop corn feed demand was also increased by 75 million bushels and exports were increased 25 million. The new crop production increase of 240 million bushels from additional corn acres was more t

Highlights The USDA will issue its July S&D at 11 AM Central time today. Yesterday morning, the government reported that inflation during June declined 0.1%; the market expected it to be up 0.1% (measured by Customer Price Index or CPI). For the past 12 months, the inflation rate was 3.0%; the market expected 3.1%. The expectation of an interest rate cut in September for the past two weeks capped with yesterday’s better-than-expected inflation number sent the stocks sharply

Highlights Yesterday’s Producer Price Index (PPI=inflation at the wholesale level) for April was up 0.5%. The market expected +0.3%. In March, the PPI was down 0.1%. The Fed has managed to create a weakening economy with high inflation. Today we get the inflation rate at the retail level with the Consumer Price Index (CPI). Market is looking for a 0.4% increase in CPI in April with the year inflation rate at 3.4%. Yesterday, President Biden announced a bundle of steep tar

Highlights The Commerce Department said yesterday morning the US economy’s gross domestic product increased at a 1.6% annualized rate in the first quarter of 2024, less than half the growth rate of the 4th quarter of 2023. The market expected a 2.4% growth rate. The first quarter growth's pace was below what the Federal Reserve regards as non-inflationary growth rate of 1.8%. It was the poorest GDP since the recession ended after the first two quarters of 2022. This GDP

At 10 AM Mountain Time today, the USDA will release its final 2023 Crop Production, Quarterly Grain Inventory as of December 1st, Actual Planted Winter Wheat Acreage Reports and the USA and World S&D. The market expects slight reductions in 2023 US corn and bean crops, larger corn inventory and a smaller bean inventory than a year ago, with South American production down slightly from last month, and less US winter wheat acres than a year ago. Our mailing yesterday had the

Highlights Yesterday's market action was a classic turn-around Tuesday action. We hate that phrase because there is no rhyme or reason for it. The interior Brazil soybean basis is firming. Cash basis traded yesterday in Sorriso for Feb delivery at -290H (290¢ under March futures). That basis was at -380H a few weeks ago. Kory Melby yesterday morning: "Tough week ahead for MT (Mato Grosso). Rain comes Dec 21 or so. But the below normal Nov and Dec totals will catch up wit

Highlights On Friday, Iraq said it wants OPEC+ to cut oil production at OPEC’s November 26th meeting. Some speculators covered their massive short positions Friday ahead of a weekend uncertainty, but crude was down 4% last week, the third consecutive weekly decline. Confresha is a municipality in northeast Mato Grosso. From October first through the 10th of November in 2022, Confresha received 16.8 inches (427.8 mm) of rain. During the same calendar days in 2023, the Confres

Highlights The producer price index (PPI) measures inflation at the wholesale level. Yesterday morning’s monthly report showed wholesale inflation in April was up 0.2% in April; 0.3% was expected. For the past 12 months, the PPI was 2.3%. These inflation numbers, being less than expected, reduce the probability of more interest rate increases. You can see why interest rates increased the past year with the chart of inflation at the wholesale level (PPI) the past 10 years: Chi

Highlights The April CPI (inflation at the retail level) shows the US inflation rate the past 12 months was 4.9%, below the expected 5.0%. This is the 10th consecutive monthly drop in the US inflation rate. We get the PPI (inflation at wholesale level) tomorrow. Note the chart of US inflation rate since 2005: We are 9 days into the CBOT May deliveries. There has not been any corn delivered on a May futures contract, not one. That is bullish, Folks, very bullish! USDA will is

About Inflation "Roger, any thoughts on how bad inflation is going to get? Thanks, Mike" The Consumer Price Index (CPI) is the measure of inflation at the retail level of an economy. The Producer Price Index (PPI) is the measure of inflation at the wholesale level. Both indexes are a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically. The representative samples used to calculate CPI and PPI have alr

Highlights

Highlights The Federal Reserve increased interest rates 75 basis points (0.75%) yesterday. It was 28 years ago since the Fed increased the interest rate that much. The 30 year home mortgage fixed rate is now 6.28%. The stock market rallied on the news as the market feels the Fed has finally gotten serious about controlling inflation. Fed Chairman Powell said more rate increases are coming in the next few months. He predicted the inflation rate will be back down to 2% in 202