EGG‑NEWS.com

WEEKLY ECONOMY, ENERGY AND COMMODITY REPORT: April 18^th 2024.

 OVERVIEW

Prices for corn and soybeans were down 0.9 and 2.4 percent respectively but soybean meal was higher by 1.2 percent compared to last week. Prices were influenced by technical selling arising from geopolitical concerns and revised projections for crop sizes in Brazil and Argentine. Secondary factors included disruption in shipping in the Red Sea and Panama Canal, carryover from the 2023 U.S. crop, export orders and the predicted ending stocks of corn and soybeans for the 2024 crop. There was no apparent response to release of the April WASDE that retained projections for production and ending stocks from the March report although prior to release of planting intentions.

At close of trading on April 18^th the CME price for corn was down 0.9 percent compared to the previous week to 427 cents per bushel for May delivery. Corn price was influenced by higher ethanol demand and the proportionally high ending stock of corn from the 2023 crop. Export orders for the current market year have increased in response to lower prices. Volumes and prices are indirectly influenced by higher wheat prices, events in the Black and Red Seas. Orders by China resumed at the end of the 2022-2023 market-year and have extended through March despite a slightly higher Dollar Index offset by a low FOB prices although with increased ocean freight. Total exports for the current market year are 33.2 percent higher than for the corresponding week during the 2022-2023 year.

Soybeans traded at 1,162 cents per bushel for May 2024 delivery down 2.4 percent over the week. Lower prices were attributed to short covering, farm selling and availability from the 2024 Brazil and Argentine harvests. Total exports for the current market year are 18.2 percent lower than for the corresponding week in the 2022-2023 year.

Soybean meal traded at $338 per ton for May delivery, up 1.2 percent compared to $334 per ton for last week. Price was influenced by demand coupled with high crush volumes for consecutive months from December 2023 onwards albeit with lower volume in January due to the impact of cold weather. Price will fluctuate to reflect the CME price for soybeans and the demand for biodiesel despite the adverse financial situation in this sector. The market previously responded to the increased 2023 crop and higher stocks together with projections for 2024 unchanged from March in the April WASDE Report.

 WTI was $1.32 (+1.5 percent) higher from last week to $87.24 on April 17^th with moderate world demand in relation to supply. Price is higher partly due to disruption in shipping in the Red Sea, and turbulence in the Middle East but is countered by U.S. production attaining 12.9 million barrels per day in March with ample reserves. An upward trajectory in price may occur if production cuts by OPEC amounting to 2 million barrels per day and extended through June actually materialize. There was an upward move in price during the week ($86.43 to $89.47 range). Crude oil inventory in the U.S., other than the Strategic Reserve, was up 0.1 percent to 33.0 million barrels last week. High U.S. production is constraining domestic and international prices but the rise in energy cost during past weeks is reflected in ‘sticky’ inflation restraining the FOMC from lowering the benchmark interest rate.

Factors influencing commodity prices in either direction over the past four weeks included:-

• Weather conditions in areas of the World growing corn and oilseeds especially in Brazil and also Argentine with favorable rain recently under the influence of a strong La Nina The 2023 U.S. harvest was completed ahead of the corresponding weeks in 2022 with higher carryover (Downward pressure on prices). Planting has commenced for the “new” crop of 2024.

• Geopolitical considerations continue to move markets, especially in the Mideast. Ongoing attacks on Ukraine port facilities have impacted prices of wheat, corn, oilseeds and vegetable oils. Loaded bulk vessels are sailing from Black Sea and Danube River ports using the ‘Humanitarian Corridor” to various destinations. This route is operational despite threats by the Russian Federation to mine the entrance to ports and deployment of airborne missiles. Exports from Ukraine are approaching 1.5 million metric tons per week with a total of 26 million metric tons market year through February, down 11 percent from the equivalent period for 2022-2023 year. Grain production in Ukraine during the current year will be lower than 2022/2023 (Downward pressure on corn and wheat and an indirect effect on soybeans)

• Macroeconomic U.S. factors:-
• Most economists in academia and the private sector are confident of a “soft landing” for the economy following the release of revised Q4 2023 GDP and recent releases of economic parameters including the CPI and anticipated PPI and a decline in bond rates. Annual inflation as measured by CPI declined from 8.9 percent in June 2022 to 3.5 percent in March 2024. This is in part a response to a series of 11 FOMC rate raises that curbed inflation and cooled the labor market but without precipitating unemployment. There is evident stability in the bank sectors in both the U.S. and Europe. Large U.S. banks passed stringent mid-year “stress tests”. There is now concern over regional banks with exposure to commercial real estate. A rise in energy prices is contributing to persistence of inflation.
• The Federal Reserve held the benchmark interest rate steady at the monthly FOMC meeting on March 20^th 2024, the fifth sequential pause. The Federal Reserve commentary indicated that the rate would be held at 5.25 percent until a pivot with possibly less than two reductions of 25 basis points each in 2024, after the September meeting at the earliest. Chairman Powell in Congressional testimony and documented in FOMC minutes has indicated that decisions would be based on data and demonstrable progress in reducing inflation towards an annual 2.0 percent target by mid-2025. Market optimism with projections of five reductions during 2024 was evidently premature.
• The March 28^th Bureau of Economic Affairs announcement of the advanced estimate of Q4 GDP confirmed a value of 3.4 percent, slightly above the previous estimate of 3.2 percent. The rise was attributed to increased consumer and government sector spending and investment in inventory. Growth in GDP attained 2.5 percent in 2023 up from 1.9 percent in 2022.
• On March 29^th the Bureau of Economic Analysis released the February Personal Consumption and Expenditure Price Index (excluding food and energy) that was up 0.3 percent from the previous month to 2.8 percent year-over-year. This was in line with estimates. Food prices increased 0.1 percent but energy was up 2.3 percent in March. The Headline PCE Index was up 2.5 percent year-over-year also corresponding to estimates. The price of goods increased 0.1 percent from February and was higher than services at 0.3 percent. Consumer spending was up 0.8 percent, above estimates and compared with 0.2 percent in January, impacted by weather. The headline PCE is closely followed by the Federal Reserve and confirms declining inflation.
• The April 10^th Bureau of Labor Statistics release of the March 2024 CPI confirmed a 0.4 percent increase from February, and 0.1 percent above forecast. The annual increase of 3.5 percent was up from 3.2 percent in February and higher than the anticipated value. The increase in the core value (excluding food and energy) was 0.4 percent from February and 3.8 percent for the 12-month period, and estimates. Food at home was unchanged from the previous month. The category of meat, fish and poultry was up collectively by 0.9 percent with eggs up 4.6 percent from the previous month. Food away from home was up 0.3 percent from February. On an annual basis all food was up 2.2 percent with food at home up 1.2 percent and food away from home up 4.2 percent. Energy was up 1.1 percent together with natural gas (-3.2 percent) in March. The shelter category was up 0.4 percent for the month and 5.7 percent over the past year. The macro trend is inclining towards reduced inflation due to a fall in energy prices but this category has recently moved up, detracting from deflation. The CPI heavily influences FOMC rate decisions.
• The March Producer Price Index for Final Demand (PPI) released on April 11^th was up by 0.2 percent from February compared to an expectation of 0.3 percent. The PPI was up 2.1 percent over the past 12-months. This is compared to a 6.4 percent increase in 2022. The core PPI value excluding volatile fuel and food, was up 0.2 percent for March and up 2.8 percent for the 12-month period. Food was up 0.8 percent compared to a 1.1 percent increase in February.
• A Federal Reserve release on March 15^th confirmed that industrial production rose 0.1 percent in February. Production was adversely affected by inclement weather during January with plant closures. Capacity utilization was unchanged at 78.3 percent, 1.3 percent below the 1972-2020 average.
• The March 26^th report on Durable Goods Ordered during February 2024 was higher by 1.4 percent to $278 Billion after two months of declines. Transportation and specifically aircraft orders were up 3.3 percent. Excluding the Transportation component, new orders increased by 0.5 percent in February compared to January impacted by inclement weather. Shipments of durable goods increased 1.2 percent following a fall of 0.8 percent in January 2024.
• The April 15^th release of retail sales data showed a monthly rise of 0.7 percent in March. This value is compared to the revised 0.9 percent rise in February 2024, reflecting a rebound from depressed sales in January affected by harsh winter storms and a change in the basis of calculation. Retail sales in March 2024 were up 4.0 percent from the corresponding month in 2023. The Federal Reserve FOMC closely monitors retail sales as a measure of the trend in inflation.
• The April 1^st release by the Institute for Supply Management (ISM®) documented the Manufacturing Index for March at 50.3 up from 47.8 in February and above the consensus of 48.4. New orders increased to 51.6 (49.2, February) and Production attained 54.6 (48.4, February).
• The April 1^st release of the S&P Global U.S. Manufacturing PMI fell to 51.9 in March from a revised 52.2 in February but above the March 2023 value of 46.3.
• The Conference Board Consumer Confidence Index released on March 26^th for February/March, rose to 104.7 points. This reading was almost unchanged from a revised 104.8 for the preceding four-week period. The Present Situation Index was up to 157.0 in March from 147.6 in February. The Expectations Index fell to 73.8 in March from 76.3 in February with values below 80.0 suggesting a future recession
• The March 15^th University of Michigan Preliminary Index of Consumer Sentiment fell 1.5 points to 77.9 for April down from a revised final value of 79.4 in March. The Index was up from 63.7 in April 2023. Both the Current Economic Index (79.3 down from 82.5 but not statistically significant) and the Index of Consumer Expectations (74.7 down from 77.4 in March) denote a decline in consumer sentiment influenced by stable but high interest rates and inflation despite geopolitical concerns. Inflation expectations 12-months hence moved higher from 2.9 to 3.1 percent among those surveyed.
• Non-farm payrolls added 303,000 for March, as documented by the Bureau of Labor Statistics on April 5^th. This was more than the anticipated 214,000, and compares to the revised February value of 270,000. The increase is attributed to workers in the health care and government sectors. The unemployment rate fell to 3.8 percent with 15 million unemployed. Real average weekly earnings for March showed a 0.3 percent increase over February. Average hours worked rose 0.1 percent to 34.4 per week in March. Labor participation increased fractionally from 62.5 percent in February to 62.7 percent in March. Wage rates increased 4.1 percent over 12-months, the lowest gain since June 2021. Wage rates are closely followed by the Federal Reserve FOMC.
• The Bureau of Labor Statistics Job Openings and Labor Survey report released on April 2^nd estimated 8.8 million job openings at the end of February, down 100,000 (-0.1 percent) from January 2024 and consistent with estimates. The February job openings number was the lowest value in 34 months and compares with the March 2022 value of 12.2 million during COVID.
• The seasonally adjusted initial jobless claims figure of 212,000 released on April 18^th was unchanged from from the revised seasonally adjusted value for the week ending April 11^th but lower than the Reuter’s estimate of 215,000. The four-week moving average declined to 214,500 The Bureau of Labor Statistics estimated 1.81 million continuing claims for the week ending April 6^th up 2,000 from the previous week. There is evidence from data over the past three months that the labor market is cooling despite sporadic weekly fluctuation in new claims.
• The April 5^th Bureau of Labor Statistics report recorded a 0.7 percent increase in non-Farm Productivity for 2023. Output increased by 2.6 percent with a 1.9 percent increase in inputs of labor and capital. Hours Worked was up by 1.3 percent in 2023
• The ADP® reported on April 3^rd that private payrolls increased by 184,000 in March, up 29,000 from the revised 155,000 in January and compared to the Bloomberg estimate of 150,000 jobs. The increase in employment was mostly in the construction, financial services and manufacturing sectors. Annual pay was up 5.1 percent year-over-year unchanged from February. The increase will not directly influence the probability of short-term future changes in interest rate since the ADP® is regarded by the FOMC as an unreliable statistic

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FACTORS INFLUENCING COMMODITY PRICES

• The 2023 harvests of corn and soybeans were completed by late November 2023. The April 11^th WASDE projected acreage to be planted, yields, crop size and ending stocks for the 2024 crop.
• It is evident that both polarization in the closely divided chambers of Congress and intra-party conflict between and among both sides of the aisle in the House delayed adoption of appropriations bills. Passage of the 2023 Farm Bill will be contentious and is subject to a 12-month extension as a stop-gap measure. Progress on the 2023 Farm Bill has been impeded by contention over SNAP eligibility and other entitlements that collectively represent 75 percent of total expenditure. The August 2^nd downgrade of U.S. debt from AAA to AA+ by Fitch Ratings recognizes Congressional dysfunction. On November 10^th 2023 Moody’s downgraded U.S. credibility from ‘stable’ to ‘negative’ based on an inability to pass required fiscal legislation. After four Continuing Resolutions the House and Senate passed six appropriations bills including the FDA and USDA, avoiding a March 8^th partial shutdown of the Federal Government. Agreement was concluded on the remaining appropriations bills on March 23^rd maintaining Federal funding through October 2024. Currently the Speaker of the House is experiencing difficulty in arranging for passage of legislation.
• The delayed 2023 Farm Bill is mired in conflict in both the House and Senate. There is no consensus on major issues comprising the magnitude of SNAP payments and eligibility and requested price supports for crops. The Chair of the Senate Agriculture Committee Sen. Debbie Stabenow (D-MI) is standing firm on maintaining both SNAP-WIC benefits and climate remediation funding even if the Farm Bill is delayed through to the 119^th Congress
• The April 11^th WASDE #647 Projected both corn and soybean production parameters with a potential record corn harvest for the 2024 crop. There will be ample world availability of ingredients although inequitable distribution will result in shortages in some nations. Soybean exports will comprise 38.2 percent of the 2024 U.S. crop with a 7.7 percent increase in ending stock to 340 million bushels as compared to the March WASDE Report.
• Rabobank projected the soybean crop in Brazil at 153 million metric tons on April 4^th. This value is higher than the projection by CONAB (the Soy production association in Brazil) at the midpoint of the soybean harvest, of 147 million metric tons (5,401 million bushels) down from a previous estimate of 155 million metric tons (5,695 million bushels). Exports of 100 million metric tons (3,674 million bushels). It is anticipated that Brazil will crush 56 million metric tons (2,057 million bushels). If CONAB is correct the harvest will be 7 million metric tons (269 million bushels) lower than the 2023 record crop. Brazil exported 7.0 million metric tons (257 million bushels) of soybeans to China over the first two months of 2024, double the quantity shipped to this nation over the corresponding two months in 2023.
• Corn production in Brazil for the 2023-2024 market year will attain 124 million metric tons (4,801 million bushels) from all three sequential harvests. But down seven percent from the previous year. Brazil is projected to export of 54 million metric tons (2,125 million bushels). Argentine will produce 50 million metric tons of corn (1,968 million bushels), double compared to the previous year impacted by drought. (Lower prices in the future subject to favorable reports on crop progress and actual harvests)

• The Dollar Index (DXY) was 105.9 at close on April 17^th, up 0.7 point from last week responding to CPI data suggesting retention of current benchmark interest rates for a prolonged period. The DXY has ranged from 99.0 to 107.0 over the past 52 weeks. The dollar index influences timing and volume of export orders and indirectly the price of WTI crude.

EXPORTS

The FAS Export Report for corn, released on April 18^th for the week ending April 11^th confirmed that outstanding export orders for corn amounted to 14.56 million metric tons (572.90 million bushels). Net orders for the past week for the 2023-2024 market year amounted to 0.50 million metric tons (19.71 million bushels). Shipments recorded during the past working week amounted to 1.55 million metric tons (60.85 million bushels). For the current market year to date cumulative export of 30.12 million metric tons (1,186 million bushels) is 33.2 percent higher compared to the equivalent week of the previous market year. For market year 2024-2025 outstanding orders attained 1.83 million metric tons (72.11 million bushels) with 65,000 metric tons (2.8 million bushels) ordered this past week

(Conversion 39.36 bushels per metric ton. Quantities in metric tons rounded to 0.1 million)

The FAS Export Report for soybeans covering the week ending April 11^th reflecting market year 2023-2024, recorded outstanding export orders amounting to 3.60 million metric tons (132.1 million bushels). Net orders this past week attained 0.49 million metric tons (17.85 million bushels). Shipments for the past working week attained 0.48 million metric tons (17.64 million bushels). For the current market year to date cumulative exports of 37.69 million metric tons (1,385 million bushels) are 18.2 percent lower compared to the equivalent week of the previous market year. Outstanding orders for the 2024-2025 market year amount to 0.73 million metric tons metric tons (26.95 million bushels) with 0.26 million tons (9.5 million bushels) ordered this past week.

 (Conversion 36.74 bushels per metric ton)

For the week ending April 11^th 2023 outstanding orders for soybean meal and cake attained 3.60 million metric tons. Net orders this week for soybean meal and cake amounted to 129,800 metric tons. During the past week 481,000 metric tons of meal and cake combined was shipped. The quantity exported to date is 17.0 percent higher than the volume for the corresponding weeks of the previous market year. For the next market year outstanding sales have attained 309,100 metric tons with 10,000 tons ordered this past week.

The April 11^th 2024 WASDE #647 projected:-

• Corn area planted for all purposes in 2024 (‘new crop’) will attain 94.6 million acres, down 0.3 from last year. According to the April WASDE, yield was projected at 177.3 bushels per acre with a resulting production of 15,342 million bushels with 2,122 million bushels as ending stock. The USDA retained the average ex-farm price to 470 cents per bushel for the 2024 crop.
• Soybean area to be planted for 2024 will attain 83.6 million acres, unchanged from 2023. According to the April WASDE, yield was predicted at 50.6 bushels per acre with production of 4,165 million bushels with 340 million bushels as ending stock. The USDA reduced the average season price to 1,255 cents per bushel.
• Crushers are expected to produce 54.25 million tons of soybean meal. Ending stocks will attain 400,000 tons. The USDA held the average projected price at $380 per ton.

The preference for planting corn over soybeans in 2023 was based on a favorable projection of the corn to soy benefit ratio. Planting data for 2024 will be ascertained following surveys of farmers during March concerning their planting intentions.

COMMODITY PRICES

The following quotations for the months of delivery as indicated were posted by the CME at the close on April 18^th 2024, compared with values at 12H00 on April 11^th 2024 (in parentheses): -

Changes in the price of corn, soybeans and soybean meal over five trading days this past week were:-

Corn: May quotation down 4 cents per bushel. (-0.9 percent)

Soybeans: May quotation down 28 cents per bushel (-2.4 percent)

Soybean Meal: May quotation up $4 per ton (+1.2 percent)

The CME spot prices for feedstuffs per short ton at close of trading on April 17^th 2024 with prices for the previous week were:-

• Corn (ZC): $157 per ton, up $2 per ton (+1.3 percent) from the previous week. 52-week range $149 to $233
• Soybean Meal (ZM): $339 per ton, was $331. Up $8 per ton (+2.4 percent) from the previous week. 52-week range $323 to $495

Values for other common ingredients per short ton:-

• Meat and Bone Meal, (According to the USDA National AnimalBy-product Feedstuffs Report on April 12^th: Range $400 to $450 with an average of $433 per ton for porcine (ex MN), down 7.9 percent from last week; $315 to $335 per ton (Av. $325 per ton) for ruminant (ex MN) down 3.0 percent from last week. Price varies according to plant and location
• According to the USDA National Mill-Feeds andMiscellaneous Feedstuffs Report on April 12^th wheat middlings from St. Louis, MO. and other locations: $90 to $112 per ton (Av. $99 per ton) up 15.1 from the previous week
• According to the National Grain and Oilseed Processor Feedstuffs Report on April 12^th DDGS, (IA.) was priced at $145 to $195 (Av. $164 per ton down $6 per ton (3.5 percent) from the previous week reflecting stable to slightly lower corn prices. The average Pacific Northwest price was $254 per ton. Price varies according to plant and location and is expected to fluctuate with the price of corn
• University of Missouri Extension Service By-Product Feed Price Listing for April
• Bakery Meal, (MO & TX): $150 per ton.
• Rice Bran, (AR & CA): $120 to $200 per ton. (Av. $160).

For each $1 per ton (2.8 cents/bushel) change in corn the cost of egg production would change by 0.11 cent per dozen

For each $10 per ton change in the price of soybean meal the cost of egg production would change by 0.35 cent per dozen

There was a 0.5cent per dozen increase in the nest-run production cost for eggs this past week, compared to April 12^th due to a rise in the spot price of soybean meal

ENERGY

The October 11^th 2023 U.S. Energy Information Administration (U.S. EIA) report estimated that fuel ethanol blending would average 980,000 barrels per day in 2024, down 2.0 percent from 2023. For the week ending April 12^th, 85.3 percent (91.7 percent for the previous week) of the U.S. ethanol fermentation volume was operational, based on January 2023 U.S. EIA capacity of 1,152 million barrels per day. The outlook for increased production will depend on higher domestic demand, from summer driving in addition to increasing the limited quantity exported comprising approximately nine percent or the production equivalent to 2.8 days.

During January 2024 (the last month for which US Energy Information Administration data is available) ethanol exports were down 3.6 percent from the previous month to 152.6 million gallons (3.580 million barrels). Importing nations and regions of significance and their proportions of total volume (rounded) for the month included:- 37.3 percent to Canada; 21.9 percent to India; 10.1 percent to Europe; 8.0 percent to Asia, predominantly South Korea and the UAE; 7.0 percent to Central and South America and 3.6 percent to Mexico.

According to the U.S. EIA, for the week ending April 12^th 2024 the industry produced on average 980,000 barrels of ethanol per day, a sharp 6.9 percent from the week ending April 5^th and below the one million gallon per day benchmark.

On April 12^th ethanol stock was down 0.5 percent from the previous week to 26.1 million barrels, an approximately 24-day reserve. This past week demonstrated slightly decreased demand for ethanol, given relative changes in the weekly production level (output down 1.6 percent and inventory down 0.8 percent over the most recent week)

Current Energy Prices:-

• The price of WTI was up $1.32 per barrel, (+1.5 percent) to $87.24 per barrel on April 17^th compared to the previous week. WTI is up 8 percent year-over-year. Issues affecting price last week included a conflict premium for Middle East crude and continued disruption of shipping in the Red Sea resulting in an escalation in bulk and liquid sea-freight. An OPEC+ production cut that commenced in July 2023 in addition to a voluntary one-million barrel per day reduction by Saudi Arabia announced on June 4^th was extended through June 2024 although it is questioned whether all members of OPEC will comply. At the April 3^rd OPEC+ Meeting Ministers decided to retain current supply policy and encouraged compliance by members with respect to supply cuts.

The ending stock of crude held at Cushing OK. on April 12^th was up 0.1 percent from last week to 33.0 million barrels and 22.9 percent down from the annual high on June 23^rd 2023. Hydrocarbon sources of energy contributed materially to inflation in the third quarter compared to the previous quarter of 2023 but was an important contributor to deflation in the fourth quarter of 2023. On April 12^th Baker Hughes reported 617 rigs were in operation in the U.S. down from 620 on April 5^th 2024 compared to 748 during the corresponding week in 2023. U.S. crude production averaged 12.9 million barrels per day in March. Consensus estimates for WTI price through the remainder of 2024 average $76.50.

• Ethanol quoted on the CME (EH) on April 17^th was priced at $2.16 per gallon, unchanged for months due to lack of trading activity. The 52-week range is $2.14 to $2.19 per gallon.

• On April 17^th RBOB gasoline traded on NASDAQ (RB) at $2.70 per gallon, down 6 cents per gallon (-2.2 percent) from the previous week. Despite the change this week prices are becoming more evident in CME trading and ultimately at the pump. The 52-week range for RBOB gasoline is $1.98 to $2.80.

• The AAA national average regular grade gasoline price was $3.66 per gallon on April 17^th, up 4 cents per gallon (+1.1 percent) from last week. Gasoline is now $1.50 per gallon more expensive than ethanol but has a 63 percent higher BTU rating. Future rises in fuel cost are inevitable given the increases in benchmark WTI

• The AAA national average diesel price was $4.06 per gallon on April 17^th, unchanged from the previous week but with prospects for future increases due to an extremely low national stock and the rising price of WTI. Increases are currently restrained by a decline in the trucking industry.

• CME Henry Hub natural gas was priced at $1.74 per MM BTU on April 17^th down 14 cents (-7.4 percent) from the previous week on lower demand due to milder weather. Gas prices are depressed following an Administration embargo on new LNG export terminals.

INGREDIENTS

DDGS is freely available with most plants among the 192 operational on January 1^st 2023 (the last available estimate) with a combined capacity of 1,152 million barrels per day functioning at a sharply reduced national average 85.3 percent compared to 93.1 percent last week. The April 17^th USDA National Grain and Oilseed processor Feedstuffs Report priced DDGS from Iowa plants at $145 to $190 per ton, with an average of $164 per ton. Wide variation in price exists depending on supplier, quantity and location. It is axiomatic that the cost of DDGS will reflect changes in the price of corn with an appropriate lag period. Generally DDGS is currently incorporated at moderate inclusion levels in egg-production formulas based on price relative to the nutrient contribution of corn and other ingredients. This will change as corn and hence DDGS fluctuate in price

The CME soybean price for May 2024 delivery at the close on April 18^th was down 2.4 percent to 1,134 cents per bushel. The current price of soybeans is a reflection of availability for domestic crushing to produce oil, consumption and export orders. Soybean meal was up 1.2 percent on the CME to $337 per ton for May 2024 delivery. Prices of soybeans are obviously influenced by projections of harvest in the three major producing nations in South America, the projected 2024 harvest in the U.S. coupled with domestic demand for soy oil, biodiesel and meal.

According to a release on April 15^th by the National Oilseed Processors Association, whose membership process 95 percent of the U.S. crop, the soybean crush for March 2024 attained 196.4 million bushels of soybeans, lower than the consensus estimate of 197.8 million bushels. This was a new monthly record and up 5.7 percent from March 2023. Crush volume was up 5.5 percent from February 2024 at 186.2 million bushels and 0.6 percent above the previous record crush of 195.3 million bushels in December 2023. April crush data will be posted in the May 17^th 2024 edition of EGG-NEWS.

On April 17^th the CME spot price for soybean oil was down 2.0 cents per lb. (-4.2 percent) from the previous week to 45.6 cents per lb. Prices for vegetable oils have fluctuated over a narrow range in past weeks but have decreased with recent higher supply. Asian crude palm oil was also lower this past week on profit taking. It is anticipated that 41 percent of U.S. soy oil was diverted from fuel to biodiesel during 2022 and this proportion will be exceeded in 2023 paralleling the situation in Brazil.

On April 17^th CME soybean meal spot price was $339 per ton, $8 per ton higher than the spot price last week and compared to a 52-week range of $323 to $474 per ton.

On April 12^th Meat and Bone meal (ruminant) was quoted over a range of $315 to $335 per ton (Av. $325 per ton) and porcine over a range of $400 to $450 per ton with an average of $433 per ton according to the USDA National Animal By-product Feedstuffs Report, Prices quoted were for Minnesota plants but with a wide range based on composition, source and location. Price fluctuation reflects changes in soybean meal and other oilseed meals.

On April 17^th conversion of the CNY to the BRL was BRL 0.73, down CNY 0.03 from last week. The conversion of the CNY to the US$ was CNY 7.23, down CNY 0.09 from the previous week despite the increase in the Dollar Index.

For consecutive calendar years 2017 through 2019 the U.S. supplied 34.4 percent of soybean requirements for China amounting to 95.5 million metric tons. This was followed by a decline to 16.9 percent of 88.5 million metric tons in 2018 and 16.6 percent of 88.0 million metric tons in 2019. The USDA anticipated that soybean imports by China would attain 95.0 million metric tons during the 2020-2021 market year but in reality only 60.3 million tons was shipped through August 2021.

For the 2021-2022 market year net export sales of corn were down 21.5 million metric tons (844 million bushels) compared to the previous market year with cumulative exports of 38.3 million metric tons (1,507 million bushels) 

For the 2022-2023 market year net export sales of soybeans were down 5.6 million metric tons (206 million bushels) compared to the previous market year with cumulative exports of 51.5 million metric tons (1,893 million bushels)

For Market year 2022-2023 ending September 2023, a record 13.2 million metric tons of soybean meal and cake was exported valued at $7 Billion. Expansion in exports was attributed to orders from The E.U., Asia (Viet Nam) and Latin America. Crush volume was driven by the demand for soy oil to produce biodiesel fuel.

During calendar 2023, 46.0 million metric tons (1,810 million bushels) of corn were exported from the U.S., valued at $13,140 million. The top five importers with their respective values expressed as a percentage were:- Mexico, 40.9; Japan, 15.8; China, 12.5; Colombia, 8.6 and Canada, 5.1.

During calendar 2023, 49.0 million metric tons (1,800 million bushels) of soybeans were exported from the U.S., valued at $29,910 million. The top five importers with their respective values expressed as a percentage were:- China, 50.6; E.U., 12.0; Mexico, 9.3; Japan, 4.3; Indonesia, 4.1; Taiwan, 2.0 and Egypt, 1.6.

COMMENT

Subscribers are referred to the December 8^th 2023 WASDE #643 for the 2023 harvest. The preliminary USDA projection for 2024 harvests is included in the April 11^th WASDE #647, retrievable under the STATISTICS tab. The USDA Planted Acreage Report and the quarterly Grain Stocks Report are posted under the STATISTICS Tab.

Following cancellation of the Black Sea Grain Initiative (BSGI) Ukraine commenced limited shipment of commodities from the three main Black Sea and Danube Delta ports that remain functional. Projected harvest during the 2022/2023 season will amount to 49.0 million metric tons, 42 percent lower than for 2021/2022. Exports were projected to attain 38.1 million metric tons, 26.5 percent lower than the previous market year.

Either more intense action by Ukraine, a negotiated peace treaty with concessions to the Russian Federation, or their combination will be required to restore unrestricted shipping in the Black Sea. Increasing passage along the costal-route (“Humanitarian Corridor”) has allowed sea-transport of commodities since early August to supply Asia and Africa.

Increased multinational naval activity has commenced in the Bab al-Mandeb Strait at the southern end of the Red Sea to restore shipping through the Red Sea and the Suez Canal that carries 15 percent of world sea-freight. Some shipping lines including Maersk of Denmark, Hapag-Lloyd of Germany and CMA of France have suspended transit of the Suez Canal and the Red Sea awaiting a clear resolution of the danger from missiles. Traffic through the Suez Canal is down 40 percent from September 2023. Restoring free passage will require destruction of Houthi bases, radar and command installations and mobile launching equipment on the soil of Yemen in addition to interdicting re-supply from Iran. This is in progress.