4.12.24 Tredas Weekly Recap
Weekly Action:
Corn May24 up 1 at $4.35
Beans May24 down 15 at $11.72
KC Wheat May24 up 6 at $5.90
Hogs May24 down 3.525 at $89.325
Fats April24 down .875 at $178.375
Feeders April24 down 4.25 at $238.225
Corn Dec24 down 1 at $4.71
Beans Nov24 down 12 at $11.74
KC Wheat Jul24 up 8 at $5.88
April WASDE Report (April 11th) Summary:
Looking at US stocks, corn was 50mil bushel lower, soybeans & wheat both 25mil bushel higher from last month. USDA increased ethanol and feed demand for corn 25mil bushel each, but trade was expecting a touch more (avg estimate was 70 mil bushel lower in total). USDA cut soybean export demand 20mil bushel and cut wheat feed demand 30mil bushel.
US & CONAB estimates for Brazil crops continue to be far apart. USDA has Brazil soybeans at 155mmt, while CONAB cut their estimate to 146.5mmt. USDA has Brazil corn at 124mmt vs CONAB at 111mmt.
Market Recap:
This week’s commentary is heavily influenced by an article from Agricultural Economic Insights from April 8.
According to the USDA, the world harvested 2.458 billion crop acres in 2023. This is an increase of almost 100 million acres since 2018. Other world acreage growth spurts happened during the 1970s and 2004-2014. Over half of these expanded acres since 2018 (57%) were committed to oilseeds: peanuts, canola, soybeans, and sunflowers. Corn acreage has increased 27 million acres and wheat 20 million. It is worth mentioning the 2004-2014 global expansion was 222 million acres compared to the 98 million over the last five years. Since 2004, the world has added nearly 320 million acres of harvested cropland. For perspective, the main three U.S. crops acreage is expected to be 249 million acres this year. In summary, the globe has added more than the total cropland of corn/wheat/soybeans of the United States since 2004.
South American and South Asia (India) have added the most farmable acres. South America has added approximately 90 million acres since 2004. India has added 38 million acres in the past five years.
Brazil has 70 million acres of degraded pasture that could still be turned into cropland. This could increase their acres another 35%.
Weather:
Moisture is on tap for parts of the Eastern corn belt but should remain mostly dry in the west. This should allow for quick planting pace.
Economy:
A Vietnamese property tycoon has been sentenced to death over $12 billion in fraud. She was found guilty of embezzlement, bribery, and violations of banking rules. Another 84 defendants received penalties ranging from probation to life in prison.
Headline CPI was reported to be 3.1% year-over-year. Shelter costs are up 6.1%. These figures were above expectations and have put future Fed rate reductions in limbo.
Auto insurance premiums have increased 22% from just last year, which is the biggest jump since 1976.
Inflation has definitely impacted fast food prices. Overall inflation over the past 10 years is 31%, while McDonald’s prices have increased 100%.
Energy costs have also accelerated dramatically the last couple years. Energy inflation is +28% since March 2021.
Something That Probably Means Nothing:
Kids are growing up slower these days. Below is a survey of teenagers olds over the years.
Quote of the Week:
“The first time I played The Masters, I was so nervous I drank a bottle of rum before I teed off. I shot the happiest 83 of my life.” – Chi-Chi Rodriguez, 14-time Masters competitor
Enjoy your weekend!
