By our calculations, Highly Pathogenic Avian Influenza (HPAI or Avian Flu) has resulted in the culling of 28.5M egg layers, 4.9M turkeys, and 1.7M broilers. The egg-laying flock is 7% lower than a year ago. The USDA has bumped its 2022 egg price forecast from $1.36 per dozen to $1.96 over the past 2 months (vs $1.18 for 2021). HPAI has mostly spared the broiler flock.
Read MoreThe March CPI was up 8.5% from a year ago, the largest jump since Dec 1981. Soaring wages are still running well behind inflation, prompting workers to push for even more money. Economists call this a wage-price spiral. Most analysts underestimated both the pandemic’s longevity and the extent of its effects on supply chain.
Read MoreLast week, Indonesia began enforcing a ban on palm oil exports in an effort to bring down domestic prices ahead of the Muslim festival of Eid al-Fitr, which marks the end of fasting during Ramadan. As the world’s top producer and exporter of palm oil, Indonesia accounts for a huge 35% share of all global veg-oil trade.
Read MoreFriday’s Cattle on Feed report was near-term bearish and long-term bullish for cattle prices. The USDA said feedlot inventories, at 12.11M head on April 1, were up 1.7% from a year ago. Multiple years of drought and high feed costs have prompted ranchers to both liquidate herds and to push pasture-feeders onto feedlots at younger ages.
Read MoreUkraine accounts for 80% of the world's sun-oil trade, which works out to 12% of all globally traded veg-oils. That 12% is lost for now. Palm oil is also in short supply due to Covid-driven production issues and Indonesian export restrictions. Now, new biofuel initiatives mean that sky-high crude oil markets can (and will) drag soy-oil prices higher.
Read MoreIf you were to judge by market reactions, traders did not put a lot of faith in Friday’s bearish (for prices) USDA WASDE report. In corn, the USDA left U.S. corn ending stocks unchanged and didn’t increase exports – while most analysts expected projected U.S. exports to jump due to a 16% (and growing) decrease in Ukrainian corn exports.
Read MoreIn last week’s (3/30) quarterly Hogs and Pigs Report, the USDA said total herd inventories were down 2.3% vs. a year ago, while hogs kept for breeding declined 1.9%. Dec-Feb farrowing intentions were down 1.0%; Mar-May down 1.5%. The numbers were below pre-report expectations and bullish for prices.
Read MoreIn Friday’s Cattle on Feed report, the USDA said feedlot inventories, at 12.16M head on March 1, were up 1.4% from a year ago. New placements onto feedlots in February jumped 9.3% from a year ago, resuming the trend toward large, year-over-year, liquidation-driven placement gains in 4 of the past 5 months.
Read MoreAfter hitting 14-year highs of $123.70 per barrel on 3/8, WTI crude oil futures have retreated to $104.70 (3/18). AAA says the national average for gasoline dropped from $4.33 to $4.25 per gallon and should drift lower if oil stays near $100. Meanwhile, the political blame game rages on social media, so here are the facts in order of importance:
Read MoreThere are 4 (major) traded edible oils. Looking at just exports for the 2021/22 crop year, palm oil is king with a 56% share, sunflower seed oil is 2nd at 15%, soybean oil is 3rd at 14%, and rapeseed (canola) comprises 6%. Ukraine accounts for 80% of the world’s sun-oil trade, which works out to roughly 12% of all globally traded veg-oils. That 12% is lost for the foreseeable future.
Read MoreIt’s been a week in commodities like few in history. And even though we were sounding the alarm on crude oil, veg-oils, and wheat since January – actually seeing it unfold was a little frightening. With Russia close to sealing off Ukraine’s southern coast and ports – and with OPEC well behind their targeted oil production targets – prices for the 3 (above mentioned) commodities exploded last week.
Read MoreIn Friday’s Cattle on Feed report, the USDA said feedlot inventories, at 12.2M head on Feb 1, were up 0.8% from a year ago. New placements onto feedlots in January were down 1.2% from a year ago, following 3 straight months of large, year-over-year, liquidation-driven placement gains.
Read MoreRussia’s invasion and annexation of the Crimean Peninsula in 2014 eliminated Ukraine’s small navy and set up Russia (if it chooses to do so) for unimpeded naval blockades. In 2022, 95% of Ukraine’s grain exports were transported via Black Sea ports.
Read MoreLooking at the economic storm clouds: Covid, supply chain issues and tight labor markets are carrying over into 2022. But this year we can add 2 more growth killers: rising interest rates and high fuel prices. Jan’s CPI came in at a 40-year high of +7.5%.
Read MoreSoy-oil futures moved above $.65/lb last week and now look poised to challenge the record high of $.72 set in June 2021. Soy-oil averaged $.5815/lb last year, following a 6-year stretch (2015-2020) of averaging just $.3117.
Read MoreGeopolitics is helping light a fire under grain prices. Russia is the world’s top wheat exporter, and Ukraine is #4 globally in wheat exports and #3 in corn. Russian wheat exports are already down roughly 30% since July 2021, due to restrictions aimed at curbing domestic inflation.
Read MoreIn Friday’s Cattle on Feed report, the USDA said feedlot inventories, at 12.04M head on Jan 1st, were up 0.6% from a year ago. New placements onto feedlots in December were 6.5% above a year ago, confirming large numbers of cattle moving off of dried-up pasture.
Read MoreDairy herd numbers plummeted 122,000 head or 1.3% in just 6 months – and tighter milk supplies are impacting prices. Butter that was still below $2.00/lb in early Dec has jumped to $2.7250 (1/14). Butter output in Nov was 9.6% below a year ago.
Read MoreGreen carbon initiatives have turned soy-oil into an energy commodity, and as such, its correlation to crude oil is undeniable. In 2021, soy-oil futures started the year at .4293/lb and hit a high of $.7208 on 6/8/21. Crude oil futures started 2021 at $47.62 per barrel before running up to $75.23 on 7/1/21.
Read MoreCovid, labor markets, supply chain issues and rising costs will continue to be ongoing issues in 2022. Current models show Covid cases peaking in late Jan, but then taking most of Feb/Mar to recede. That’s going to take a bite out of Q1 GDP, with growth now forecast in the 2-3% range – down from pre-Omicron forecasts of 5-6%.
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