Welcome back to the D&D AG MarketMIX newsletter! This newsletter is exclusively for you - our D&D customers and associates. Our goal is to provide you with a monthly summary of the Ag market reports to keep you updated on relevant, vital news that may impact your business.

Downtrends in Grain Markets

Grain markets eased through the end of February and into March, and the latest World Agricultural Supply and Demand Estimates reports encouraged a continued downtrend. USDA reduced its export forecasts for US corn, helping loosen the domestic balance sheet and relieve concerns for global tightness. 

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Corn Market Looking Hopeful

Internationally, the corn market continues to overlook extreme dryness in Argentina despite a significant reduction in output estimates. A strong Brazilian crop and hopes for continued Black Sea exports are also offsetting worries over a double-dip La Niña weather pattern in Argentina. 

Due to downward price pressure, market sentiments have shifted in recent weeks, with feed buyers increasingly hopeful for cheaper corn in the next marketing year. Unfortunately, protein pricing has yet to make the transition lower. The soybean complex remains historically elevated, with the Argentine weather having a stronger impact on global protein. Markets are attempting to gauge whether a record-large Brazilian crop will offset Argentine woes and are also waiting for further guidance from the Environmental Protection Agency, whose renewable fuel guidance in December helped initiate the current rally.

Fiber Market Prices Down

In fiber markets, old-crop fiber values have fallen significantly amid increasing snowpack in the western US and drought relief in the Midwest. Since the first of the year, soyhull prices are down 30%, wheat middlings are down 25%, and almond hulls are somewhere between.

We’re expecting a break in hay and silage markets in the coming months as stocks are replenished and critical parts of the West Coast and Plains states continue to receive moisture. The same is true for new crop values, as even a 15-20% reduction in cotton acres would have less of an impact on cottonseed prices than the 50% yield loss experienced in the Texas panhandle last year.

Key Market Drivers Looking Ahead

Looking ahead, key market drivers will include a strengthening US dollar, which could curb US export prospects. The Federal Reserve is reportedly considering further rate hikes amid still-hot inflation, efforts that could propel the greenback further upward.

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China's GDP Forecast Lower Than Expected

Analysts are also monitoring China’s economy after new economic forecasts came in below expectations. Government officials estimate gross domestic product will climb roughly 5% this year, below average forecasts for 5.24%. China also set a goal of 3% for its consumer price index and a 5.5% unemployment rate.

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Protect Your Downside

Given current market conditions, the Ever.Ag Feed Foundations Team recommends putting strategies in place to protect your downside. If you’re locking in high prices, consider buying inexpensive puts underneath. Please contact Jordan Miller or Pat Kahle who can direct your questions to the appropriate advisor to discuss specific strategies.

Jordan Miller: 419-692-3206 ext. 1043

Pat Kahle: 517-260-8295 or Pat@ddingredient.com

This monthly report is brought to you by Ever.Ag’s Feed Foundations Team. The risk of loss trading commodity futures and options can be substantial. Investors should carefully consider the inherent risks in light of their financial condition. The information contained herein has been obtained from sources to be reliable, however, no independent verification has been made. By law we must state the information contained herein is strictly the opinion of its author and not necessarily of Ever.Ag and is intended to be a solicitation. Past performance is not indicative of future results.

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