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3 Big Things Today, April 27, 2022

Soybeans Surge in Overnight Trading; Food Prices Rise Month-to-Month.

1. Soybean Futures Jump in Overnight Trading

Soybeans surged in overnight trading on concerns about the supply of cooking oils globally.

Farmers in Canada will reduce canola planting by 7% to 20.9 million acres, Statistics Canada said in a report yesterday. That’s also down 6% from the prior five-year average.

Indonesia, the world’s largest exporter of palm oil, said last week it will ban shipments of the product, sending shockwaves through the markets. Prices relaxed a bit after the government said the ban would apply only to certain types of palm oil and not crude or derivatives.

Still, the ban will expand if crude inventories begin to run low, the government said.

The shortage in global cooking oil supplies is driving up the cost of soybean oil, a rival to canola and palm oils.

Wheat futures plunged in overnight trading on some profit-taking amid recent price runups. Some speculative investors who were long the market, or bet on higher prices, likely sold contracts and booked profits.

Fundamentally, not much has changed.

About 27% of the U.S. winter-wheat crop was in good or excellent condition as of Sunday, down from 30% the previous week, the Department of Agriculture said in a report; 32% of the crop had earned top ratings two weeks ago.

Some 11% of the crop was headed at the start of the week, well behind the prior five-year average of 19%, the agency said.

Behind the average of 5% for this time of year, 3% of the soybean crop was planted at the start of the week, the USDA said.

About 7% of U.S. corn was in the ground as of Sunday, less than half the normal pace of 15%; 2% of the crop had emerged at the start of the week, behind the normal 3%, the agency said.  

Soybean futures for May delivery jumped 13¾¢ to $16.85¾ a bushel overnight on the Chicago Board of Trade. Soymeal fell 70¢ to $436.30 a short ton, while soybean oil futures surged 2.28¢ to 84.72¢ a pound.

Wheat for May delivery fell 9¼¢ to $10.95¾ a bushel while Kansas City futures lost 9¾¢ to $11.54¾ a bushel.

Corn futures rose fell 2¢ to $7.99½ a bushel. 

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2. Food Prices Rise Again in March, Up 8.8% Year-Over-Year

Food prices rose again in March as the cost of eating at home increased at a faster rate than spending on food at restaurants, according to data from the USDA.

The cost of all food rose 1% last month and is now up 8.8% in the year through March, the agency said in a report.

Prices for food bought at supermarkets and other stores rose 1.5% from February and have surged 10% year-over-year. Food consumed at restaurants registered a 0.3% increase month-to-month and are up 6.9% on an annual basis.

The price gains were widespread as every category listed in the report rose.

Meat, poultry, and fish costs rose 1.3% in March and are up almost 14% from the same month in 2021; egg prices rose 1.9% and gained 11% from last March; and dairy was up 1.2% month-to-month and 7% year-to-year, the USDA said.

Beef prices rose 1% last month and pork was up 1.4%. Costs were up 16% and 15% on an annual basis, respectively, the agency said.

Poultry cost 1.5% more in March than in February and was up 13% year-over-year.

Not surprisingly, the cost of fats and oils was the big gainer for the month, jumping 2.3%, the government said. Prices have surged 15% in the past year.

Looking forward, spending on food at grocery stores is expected to jump 5% to 6% this year and food outside the home is forecast to rise 5.5% to 6.5% this year, the USDA said.


3. Freeze Warnings Issued From Iowa Through Ohio

Freezing weather is sliding east as warnings have been issued from central Iowa through northern Ohio, according to the National Weather Service.

In eastern Iowa and northern Illinois, temperatures overnight were expected to fall as low as 29˚F., the NWS said in a report early this morning.

In northern Ohio, a freeze warning will take effect overnight as temperatures will drop as low as 31˚F..

A frost advisory also has been issued in the area overnight into Thursday, the NWS said.

In the southern Plains, meanwhile, winds to end the week are forecast from 15 to 25 mph with gusts of up to 35 mph, the agency said.

Relative humidity will drop to as low as 5%, the NWS said, creating extremely dry conditions.

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