WEEKLY ECONOMY, ENERGY AND COMMODITY REPORT: MARCH 21^st 2024.

OVERVIEW

Prices for corn and soybean meal were relatively unchanged compared to last week. Prices were influenced by short covering arising from geopolitical concerns and revised projections for crop sizes in Brazil. Secondary factors included disruption in shipping in the Red Sea and Panama Canal, carryover from the 2023 U.S. crop, export orders and predicted ending stocks of corn and soybeans for the 2024 crop. There was minimal response to the March WASDE that retained projections for production and ending stocks from the February report prior to release of planting intentions.

At 12H00 on March 21^st the CME price for corn was down 0.7 percent compared to the previous week to 434 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 events in the Black and Red Seas. Orders by China resumed at the end of the 2022-2023 market-year and have extended through to March with a stable Dollar Index and low FOB prices but with higher ocean freight. Total exports for the current market year are 30.0 percent higher than for the corresponding week during the 2022-2023 year.

Soybeans traded at 1,206 cents per bushel for May 2024 delivery. Gain was attributed to short covering and projections for the 2024 Brazil and Argentine harvests. Total exports for the current market year are 18.3 percent lower than for the corresponding week in the 2022-2023 year.

Soybean meal traded at $343 per ton for May delivery compared to $335 per ton for March delivery last week. Price was influenced by demand coupled with high crush volumes for consecutive months from December onwards but with volume restored in February after the impact of cold weather in January. 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 February in the March WASDE Report.

WTI was 2.2 percent higher from last week to $81.44 at 16H00 EDT on March 21^st with static world demand in relation to supply. The rise in price reflects disruption of shipping in the Red Sea, turbulence in the Middle East but is countered by U.S. production of 13.3 million barrels per day in February with ample reserves. The upward trajectory in price may continue if production cuts by OPEC amounting to 2 million barrels per day and extended through June actually materialize. There was little inter-day fluctuation in price during the week ($79.30 to $82.16 range) with a uniform upward trend. Crude oil inventory in the U.S., other than the Strategic Reserve, was down 0.8 percent to 31.4 million barrels last week following the seasonal trend. The U.S. production is constraining domestic and international prices

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).

• Geopolitical considerations continue to move markets, especially in the Mideast. Cancellation of the BSGI in July and ongoing attacks on Ukraine port facilities 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 deploy 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 3.2 percent in February 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.
• 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 three reductions of 25 basis points each in 2024, after the June 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 to achieve an annual 2.0 percent target by mid-2025. Market optimism with projections of five reductions during 2024 was premature.
• The February 28^th Bureau of Economic Affairs announcement of the advanced estimate of Q4 GDP confirmed a value of 3.2 percent, slightly below the consensus estimate of 3.3 percent. The rise was attributed to increased consumer and government sector spending and investment in inventory.
• The February 22^nd 2024 S&P Manufacturing Purchasing Managers’ Index Report (PMI) rose to a 21-month high of 52.5 in February from 52.2 in January 2024. The PMI is 4.5 percent higher over 12 months. The recent upward trend suggests recovery after five pauses in increases in the Federal Reserve benchmark interest rate.
• On February 29^th the Bureau of Economic Analysis released the January Personal Consumption and Expenditure Price Index (excluding food and energy) that was up 0.1 percent from the previous month. This was in line with estimates. Food prices increased 0.5 percent but energy was down 1.4 percent. The Index was up 2.4 percent year-over-year also corresponding to estimates. Food prices were up 1.4 percent and energy down 4.9 percent year-over-year. The PCPI is closely followed by the Federal Reserve and confirms declining inflation.
• The March 12^th Bureau of Labor Statistics release of the February 2024 CPI confirmed a 0.4 percent increase from January, and 0.1 percent above forecast. The annual increase of 3.2 percent was up from 3.1 percent in January and higher than the anticipated value. The increase in the core value (excluding food and energy) was 0.4 percent from January and 3.8 percent for the 12-month period, in line with estimates. Food at home was unchanged from the previous month. Food away from home was up 0.1 percent from January. On an annual basis all food was up 2.2 percent with food at home up 1.0 percent and food away from home up 4.5 percent. Energy was up 2.3 percent in February and down 1.9 percent over 12-months, mainly due to a decline in gasoline (-3.4 percent) and fuel oils (-5.4 percent). The shelter category was up 0.4 percent for the month and 5.7 percent over the past year. The macro trend is clearly towards reduced inflation due to a fall in energy prices but this category is moving up, detracting from deflation. The CPI heavily influences FOMC rate decisions.
• The February Producer Price Index for Final Demand (PPI) released on March 14^th was up by 0.6 percent from January compared to an expectation of 0.3 percent. The PPI was up 1.6 percent over the past 12-months. This is compared to a 6.4 percent increase in 2022. The increase in February was due to a 4.4 percent rise in energy and 1.2 percent for finished goods. The core PPI value excluding volatile fuel and food, was up 0.4 percent for February and up 2.8 percent for the 12-month period. Food was up 1.0 percent compared to a 0.3 percent decrease in January.
• Retail sales in February were up 0.6 percent over January compared to an estimate of 0.8 percent and compared to a decline of 1.1 percent for the revised January value compared to December 2023.
• 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 February 26^th report on Durable Goods Ordered for January 2024 was unexpectedly lower by 6.1 percent against a consensus estimate of a 4.5 fall. Transportation and specifically aircraft orders were down 16.2 percent. Excluding the Transportation component, new orders decreased by 0.3 percent in January impacted by inclement weather. Shipments of durable goods decreased 0.9 percent following a fall of 0.6 percent in December 2023.
• The March14^th release of retail sales data showed a monthly rise of 0.6 percent in February. This value is compared to the revised 0.4 percent rise in December 2023. Retail sales in January were affected by harsh winter storms and a change in the basis of calculation. The Federal Reserve FOMC closely monitors this index as a measure of the trend in inflation.
• The March 1^st ISM® Manufacturing Index for February attained 47.8 down from 49,1 in January.
• The Conference Board Consumer Confidence Index released on February 27^th for January/February, declined to 106.7 points. This reading was down from a revised 110.9 for the preceding four-week period.
• The March 1^st University of Michigan Index of Consumer Sentiment fell to 76.9 for February down from a revised 79.0 in January. The Index was up 14.9 percent from February 2023. Both the Current Economic Index (79.4 slightly down from 81.9 in January) and the Index of Consumer Expectations (75.2 down from 77.1 in January) denote a cautious increase in consumer sentiment influenced by lower interest rates and moderating inflation despite geopolitical concerns.
• Non-farm payrolls added by 275,000 for February, as documented by the Bureau of Labor Statistics on March 9^th. This was more than the anticipated 200,000, and compares to the revised January value. The increase is attributed to workers in the business, health care and government sectors. The unemployment rate rose to 3.9 percent with 15 million unemployed. Real average weekly earnings for January showed a 0.1 percent increase over January. Average hourly earnings rose 0.1 percent to $34.57 in February up 4.3 percent over 12 months. Wage rates are closely followed by the Federal Reserve.
• The Bureau of Labor Statistics Job Openings and Labor Survey report released on March 6^th estimated 8.9 million job openings at the end of January, down 100,000 (-0.1 percent) from December 2023 and consistent with estimates. The January job openings number was the lowest value in 33 months and compares with the March 2022 value of 12.2 million during COVID.
• The seasonally adjusted initial jobless claims figure of 210,000 released on March 21^st was down 2,000 from the revised seasonally adjusted 212,000 for the week ending March 14^th but lower than the Reuter’s estimate of 215,000. The four-week moving average rose 2,500 to 211,250 The Bureau of Labor Statistics estimated 1.807 million continuing claims for the week ending March 8. There is evidence from data over the past three months that the labor market is cooling despite sporadic weekly reduction in new claims.
• The February 1^st Bureau of Labor Statistics report recorded a 3.2 percent increase in non-Farm Productivity for Q4; Unit Labor Cost was up by 0.4 percent on a normalized basis and Hours Worked was up by 0.4 percent in Q4
• The ADP® reported on March 6^th that private payrolls increased by 140,000 in February, up 29,000 from the revised 111,000 in January and compared to the Reuters estimate of 150,000 jobs. The increase in employment was mostly in the construction, transport and trade sectors. Annual pay was up 5.1 percent year-over-year compared to 5.3 recorded for January. 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

FACTORS INFLUENCING COMMODITY PRICES

• The 2023 harvests of corn and soybeans were completed by late November 2023. The March 8^th WASDE provided a projection for 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 will delay 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. Agreements have yet to be concluded on the remaining appropriations bills before March 22^nd
• 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 March 8^th WASDE #646 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 39 percent of the 2024 U.S. crop with a 12.5 percent increase in ending stock.
• There is a projection by CONAB (the Soy production association in Brazil) that at the midpoint of the harvest the 2024 soybean crop in Brazil will attain 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) are anticipated and Brazil will crush 56 million metric tons (2,057 million bushels). 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 China 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 56 million metric tons of corn (2,204 million bushels) up 56 percent from 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 103.4 on March 20^th, up 0.1 point from last week but under a three-month high. Fluctuation is attributed to uncertainty over future interest rates. There is concern over a delay in the anticipated pivot by the Federal Reserve FOCM expected in June. 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 March 21^st for the week ending March 14^th confirmed that outstanding export orders for corn amounted to 17.55 million metric tons (690.9 million bushels). Net orders for the past week for the 2023-2024 market year amounted to 1.19 million metric tons (46.68million bushels). Shipments recorded during the past working week amounted to 1.53 million metric tons (60.23 million bushels). For the current market year to date cumulative export of 24.14 million metric tons (951.0 million bushels) is 30.0 percent higher compared to the equivalent week of the previous market year. For market year 2024-2025 outstanding orders attained 1.62 million metric tons (63.72 million bushels) with no orders 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 March 14^th reflecting market year 2023-2024, recorded outstanding export orders amounting to 4.67 million metric tons (171.6 million bushels). Net orders this past week attained 0.49 million metric tons (18.1 million bushels). Shipments for the past working week attained 0.77 million metric tons (28.4 million bushels). For the current market year to date cumulative exports of 35.5 million metric tons (1,304.1 million bushels) are 18.3 percent lower compared to the equivalent week of the previous market year. Outstanding orders for the 2024-2025 market year amount to 350,400 metric tons (12.87 million bushels) with 300 metric tons (1.1 million bushels) ordered this past week.   (Conversion 36.74 bushels per metric ton)

For the week ending March 14^th 2023 outstanding orders for soybean meal and cake attained 3.39 million metric tons. Net orders this week for soybean meal and cake amounted to 243,300 metric tons. During the past week 328,000 metric tons of meal and cake combined was shipped. The quantity exported to date is 16.7 percent higher than the volume for the corresponding weeks of the previous market year. For the next market year outstanding sales have attained 220,900 metric tons with 42,300 tons ordered this past week.

The March 8^th 2024 WASDE #646 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 March WASDE, yield was projected at 177.3 bushels per acre with a resulting production of 15,342 million bushels with 2,172 million bushels as ending stock. The USDA retained the average ex-farm price to 475 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 February WASDE, yield was predicted at 50.6 bushels per acre with production of 4,165 million bushels with 315 million bushels as ending stock. The USDA retained the average season price of 1,265 cents per bushel.
• Crushers are expected to produce 54.15 million tons of soybean meal. Ending stocks will attain 400,000 tons. The USDA held the average projected price at $380 per ton.
• At the 100^th Annual Agricultural Outlook Forum in mid-February, Dr. Seth Meyers revised areas to be planted to the two major crops in 2024. Corn will be planted over 91.0 million acres, down 3.8 percent from 2023. Soybean acreage will increase 4.7 percent to 87.5 million acres.

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 12H00, March 21^st 2024, compared with values at 12H00 on March 14^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 3 cents per bushel from March. (-0.7 percent)

Soybeans: May quotation unchanged from July ( 0 percent)

Soybean Meal: May quotation down $4 per ton from July (-1.1 percent)

The CME spot prices for feedstuffs per short ton at close of trading on March 20^th 2024 with prices for the previous week were:-

• Corn (ZC): $157 per ton, down $1 per ton (0.6 percent) from the previous week. 52-week range $149 to $233
• Soybean Meal (ZM): $335 per ton, was $337. Down $2 per ton (-0.6 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 March 15^th: $350 to $410 per ton (Av. $387 per ton) for porcine (ex MN), up 1.0 percent from last week ; $300 to $310 per ton (Av. $305 per ton) for ruminant (ex MN) Unchanged from last week. Price varies according to plant and location
• According to the USDA National Mill-Feeds andMiscellaneous Feedstuffs Report on March 15^th wheat middlings from St. Louis, MO. and other locations: $73 to $85 per ton (Av. $78 per ton) a 2.5 percent decline from the previous week
• According to the National Grain and Oilseed Processor Feedstuffs Report on March 15^th DDGS, (IA.) was priced at $160 to $180 (Av. $171 per ton down 4.4 percent from last week reflecting progressively lower corn prices. The Pacific Northwest price was $265 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 February
• Bakery Meal, (MO & TX): $190 to $220 per ton.
• Rice Bran, (AR & CA): $190 to $240 per ton. (Av. $210).

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 0.2 cent per dozen decrease in the nest-run production cost for eggs this past week, compared to March 15^th due to decreases in the spot prices of corn and 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 March 15^th, 90.7 percent (88.9 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 9 percent or the production equivalent to 2.8 days.

During December 2023 (the last month for which US Energy Information Administration data is available) ethanol exports were up 34.2 percent from November to 158.3 million gallons (3.713 million barrels). Importing nations and regions of significance and their proportions of total volume (rounded) for the month included:- 28.0 percent to Canada; 18.9 percent to Europe; 15.2 percent to Asia, predominantly South Korea and the UAE; 13.1 percent to India; 2.8 percent to Mexico and 7.2 percent to Central and South America and the Caribbean.

According to the U.S. EIA, for the week ending March 15^th 2024 the industry produced on average 1,046,000 barrels of ethanol per day, up 2.1 percent from the week ending March 8^th 2024 and still above the one million gallon per day benchmark.

On March 15^th 2024 ethanol stock was up 0.8 percent from the previous week to 26.0 million barrels, an approximately 24-day reserve. This past week demonstrated increased demand for ethanol, given relative changes in the weekly production level (output up 2.1 percent and inventory up 0.8 percent over the most recent week)

Current Energy Prices:-

• The price of WTI was up $1.82 per barrel, (+2.2 percent) to $81.44 per barrel on March 20^th compared to the previous week. WTI is up 14.3 percent year-to-date. Issues affecting price last week included a conflict premium for Middle East crude and 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. Angola withdrew from the cartel on December 20^th

The ending stock of crude held at Cushing OK. on March 15^th was down <0.1 percent from last week to 31.4 million barrels and 26.6 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 March 15^th Baker Hughes reported 629 rigs were in operation up from 622 on March 8^th 2023. U.S. crude production averaged 13.3 million barrels per day in February. Consensus estimates for WTI price through the remainder of 2024 average $76.50.

• Ethanol quoted on the CME (EH) on March 20^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 March 20^th RBOB gasoline traded on NASDAQ (RB) at $2.73 per gallon, up 8 cents (+3.0 percent) from the previous week. Higher 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 $3.52 per gallon on March 20^th, up 12 cents per gallon (+3.5 percent) from last week. Gasoline is now $1.36 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 $4.05 per gallon on March 20^th, up one cent (0.3 percent) from the previous week but with prospects for future increases due to an extremely low national stock and the rising price of WTI.

• CME Henry Hub natural gas was priced at $1.69 per MM BTU on March 20^th up 3 cents (+1.8 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 moderate national average 90.7 percent compared to 88.9 percent last week. The March 8^th USDA National Grain and Oilseed processor Feedstuffs Report priced DDGS from Iowa plants at $160 to $180 per ton, with an average of $171 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 March 2024 delivery at 14H00 on March 7^th was up 2.1 percent to 1,153 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 1.5 percent on the CME to $338 per ton for March 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 March 15^th by the National Oilseed Processors Association, whose membership process 95 percent of the U.S. crop, the soybean crush for February attained 186.2 million bushels of soybeans, higher than the consensus estimate of 178.1 million bushels.. This was a record for February and up 12.6 percent from February 2023. Crush volume was up 0.2 percent from January 2024 and 4.7 percent below the record crush of 195.3 million bushels in December 2023. March crush data will be posted in the April 19^th 2024 edition of EGG-NEWS.

On March 13^th the CME spot price for soybean oil was sharply up 3.7 cents per lb. (+8.2 percent) from the previous week to 48.5 cents per lb. Prices for vegetable oils have fluctuated over a narrow range in past weeks but have increased with recent higher demand. 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 March 20^th CME soybean meal spot price was $335 per ton, $2 per ton lower than the spot price last week and compared to a 52-week range of $323 to $474 per ton.

On March 20^th Meat and Bone meal (porcine) was quoted over a range of $350 to $410 per ton (Av. $387 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 March 120^th conversion of the CNY to the BRL was BRL 0.69, up CNY 0.02 from last week. The conversion of the CNY to the US$ was CNY 7.14, up CNY 0.05 from the previous week consistent with the fractional 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 February 8^th WASDE retrievable under the STATISTICS tab. The USDA Planted Acreage Report and the quarterly Grain Stocks Report 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. Year to date Ukraine has exported 29 metric tons of agricultural commodities with 1.5 million metric tons last week.

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.