Russia agreed to extend the export deal for grain coming out of Ukraine. Interestingly, they only agree to extend it for 60 days.
There are some murmurs about African Swine Fever in China floating around. Rumors are that it seems to be making a comeback. Furthermore, some early reports are indicating that the virus may have mutated and is seemingly harder to contain.
The news media is full of bank talks. Last week talks began with the failing of SVB (Silicon Valley Bank). They have now filed chapter 11 bankruptcy. This week Credit Suisse got a loan from the Swiss National Bank. Also, this week First Republic Bank received nearly $30 billion in loans from major US banks.
The Banking crisis has seeming changed the anticipation of what the Fed will do with interest rates moving forward. Last week the consensus was that we would continue to see rate hikes through yearend. However, early this week the tide turned and now it is expected that we will begin to see rate cuts by mid-year.
With all the uncertainty surrounding the bank sector it is important to note that in times of uncertainty or fear money typically leaves the marketplace and sits in cash. Or if a money manager has big loss in one area, they may have to liquidate another position to offset the losses.
Commodities this week and WASDE recap
The last few weeks we have finally seen an upward trend in corn export volumes. We are still down 37% from last years pace but that gap has closed and looks to continue as US corn is one of the best prices in the market currently. With Argentina crop continuing to be degraded this should continue to support US corn exports. Furthermore, there continues to be talks of the ever delayed and late planted Safrinha corn crop in Brazil. It will be sometime before we see how this affects the production. Soybeans are suffering on smaller demand from China and Brazilian beans currently being a cheaper source in the world market. Keep in mind that we are now two weeks away from the Prospective Plantings report that will come out on March 31st. Lastly, this week oil prices fell to their lowest level since December 2021.
All prices were gathered the afternoon of Friday, March 17, 2023, and compared to open price on Monday morning.
- Oil, down $9.79 a barrel to $66.81.
- May 2023 Corn, up 15 cents to $6.34.
- Dec 2023 Corn, up 3 cents $5.61.
- May 2023 Beans, down 38 cents to $14.76.
- Nov 2023 Soybeans, down 50 cents to $13.13.
- July 2023 Wheat, up 27 cents to $7.19.
- May 2023 Cotton, down 1 cent to 77.97.
- Dec 2023 Cotton, down 1 cent to 79.60.
Local Basis Talk
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