On this week’s watchlist for the ag analyst:
WASDE
The World Agricultural Production report comes out this week. Among other things, we are watching for initial 2023/24 balance sheets and estimate changes to U.S. corn and soybean exports, corn use in ethanol, and Latin America grain production.
Crop Input Supply/Demand
We are hearing that ag retailer inventories are generally full, that China has received very few new orders of glyphosate and wonder whether adverse weather in Argentina will hurt global input demand, near-term.
Monetary Policy
The Federal Reserve raised policy rates as expected by 25bps but may slow or end further increases. The ECB slowed the pace of increases but is not likely to pause (note that US policy rates are much higher than Europe.) (WSJ)
Dicamba Restrictions
Crop producers in IL, IN, OA and SD will have a shorter application winder in which to apply “over the top” dicamba herbicides this growing season due to EPA restrictions on the use of XtendiMax, Engenia and Tavium branded herbicides. The cut-off dates (depending on state) vary from June 12th to July 30th. (DTN)
Debt Ceiling
The Biden administration and Capitol Hill leaders are scrambling to avoid a government default, taking potential alternative strategies more seriously after months of deadlock over raising the borrowing limit. (WSJ)
Numbers of Interest
15 to 1 Represents the odds pre-race on Mage, the winner of this year’s Kentucky Derby.
$14,870.70 Kentucky Derby Trifecta payout on 1) Mage 2) Two Phil’s and 3) Angel of Empire
+5% and -11% Last week’s rise in wheat prices (+5%) and decline in natural gas prices (-11%).
2.1% U.S. Exports rose 2.1% in March to $256.2 billion, as businesses shipped more autos, oil and natural gas overseas. The U.S. also exported more to China, and imported fewer goods from there in March (= the lowest US/China trade deficit since March 2020.)
5.6% Underlying April inflation reading in the Eurozone for April, down from 5.7% in March, which matches the core inflation rate in the U.S.
17.4% Estimated vacancy rate for Manhattan office space, according to Colliers.
Upcoming Events
May 8
- 4pm - USDA released Ag Trade Data and Crop Progress reports
May 10
- 8:30 a.m. – Bureau of Labor Statistics releases April CPI
- 9:30 a.m. – Subcommittees of the House Agriculture and Financial Services committees joint hearing on the regulation of digital asset markets
- 9am - EIA weekly ethanol production figures
- 10 a.m. – House Energy and Commerce subcommittee hearing with EPA Administrator Michael Regan
- 10 a.m. – House Oversight and Government Reform subcommittee hearing with state attorneys general on ESG practices
May 11
- Bank of England monetary-policy decision (25bps expected to 4.5% policy rate). UK’s CPI rose 10.1% in March year/year
- 8:30am – USDA releases Weekly Export Sales (grain) report
- 8:30am – BLS releases April PPI
- 10 am – House Agriculture subcommittee hearing, “Stakeholder Perspectives on Agricultural Trade”
May 12
- The University of Michigan (Go BLUE!) May Consumer Sentiment Index
- 12om - USDA releases Crop Production & Monthly WASDE report
- USDA Agricultural Chemical Usage - Field Crops report
May 18
- Expiration date for Black Seas Grain Deal (unless reauthorized)
Sources: Agri-Pulse, Barron’s, Trading Economics, USDA Agency Reports
Commodity & Market Performance
Last week, the volatility index, wheat and lean hogs were the top gainers, while the energy complex (crude oil, gasoline and natural gas) lost between 7% and 11% on recession and Russian overproduction fears.
Source: Barchart.com
Kenneth Scott Zuckerberg is Lead Industry Analyst, Grains, Farm Supply & Biofuels, CoBank.
