Commodities Overview Apr 2023 Edition


Read the April 2023 Edition HERE


In April the USDA left the U.S. corn carryout and soybean carryout unchanged from March and lowered the wheat carryout due to lower feeding and residual. After the report, corn, soybeans and wheat prices trended higher. July soybean futures are back near 15.00. July corn is back near 6.50 due to tight U.S. supplies. July Chicago wheat futures are back over 7.00. KC and Minneapolis wheat futures are near 9.00. The USDA left the Brazil corn crop at 125.0 mmt but lowered the Argentina crop from 40.0 to 37.0 and left China corn imports at 18.0 mmt.

Live Cattle

By March 2023 it was evident the cattle industry was in for big changes for the year. Federal slaughter was down year-to-date 2.6%, beef exports were down 9.0%, and U.S. consumers were shifting away from high priced cuts and higher grade beef. With severe droughts throughout the southwest and western states in 2021 and 2022, cow herds were culled, bringing down the number of cattle on feed as of March 1, 2023, down 4.0% compared to the same period in 2022.

Lean Hogs

The opposite of cattle, where prices rallied in 2023, the hog market has been in a freefall throughout 2023, and the price decline in March added to it. On December 27, 2022, April 2023 lean hogs made a contract high at $97.40/cwt. On March 31, 2023, April 2023 lean hogs dropped to $75.00/cwt and closed the month at $75.25/cwt. On April 13, 2023, the date of this report, April 2023 live cattle posted a contract high over April 2023 lean hogs. April 2023 live cattle futures went $105.52/cwt over the price of April 2023 lean hogs. Compared to 2022 hogs in the U.S. have increased in herd size. Year-to-date federal slaughter as of March 31, 2023 was up 1.7%. At the same time China has increased hog inventories as well as Brazil putting more pork on the world market. More hogs have driven down pork prices.

Stock Index Futures

S&P 500 futures advanced to a two-month high in April on the belief that the Federal Open Market Committee could moderate its hawkish monetary policy later this year. Much of the recent strength was linked to evidence of a moderating inflation outlook. The March consumer price index  increased 0.1% when a 0.3% gain was expected. The March producer price index declined 0.5% when unchanged was anticipated, and the producer price index, excluding food and energy, fell 0.1% when an increase of 0.3% was predicted.

Gold Bars and US Currency

US Dollar Index

The U.S. dollar index peaked on March 8 and trended lower on the growing belief that the Federal Reserve may be near the end of its rate hiking cycle. There has been a sudden shift in expectations due financial pressures on the banking system. The U.S. dollar weakened against all major currencies as the Federal Reserve’s move to support the banking system raised questions about the pace of future interest rate increases. There is speculation that the Federal Reserve could take a less aggressive approach to policy tightening to avoid risks to the financial system. Financial futures markets are now suggesting the Federal Open Market Committee could raise its fed funds rate by 25 basis points at the May 3 policy meeting but that could be the last one.

Euro Currency

The euro currency advanced to a 13-month high in early April due to mostly stronger than expected economic reports. The S&P Global composite PMI for the euro zone increased to 53.7 from 52.0 in February, its highest level since May of last year. However, this was slightly lower than the preliminary estimate of 54.1 that was released last week. Factory orders in Germany unexpectedly increased 4.8% month-over-month in February, following a downwardly revised 0.5% gain in January and substantially above forecasts of a 0.3% increase.

Crude Oil

Crude oil futures advanced to a five-month high as investors weigh the supply and demand outlook. In its latest monthly report, OPEC left its world oil demand growth estimates unchanged at 2.3 million barrels per day but warned that the usual seasonal demand from the U.S. could be hurt by any weakening in the economy due to high interest rates. Early this month, OPEC+ surprised markets by announcing an output cut of 1.16 million barrels per day from May until the end of 2023. In addition, there was some support due to slowing oil shipments from Russia and halted pipeline flows from Iraq’s semi-autonomous Kurdistan region.


April gold futures advanced to their highest level since April 2022, boosted by a weaker U.S. dollar after data showed U.S. inflation and labor markets are cooling and increasing speculation that the Federal Reserve could halt interest rate hikes or even lower them soon. Both headline producer and consumer inflation slowed more than expected, while weekly jobless claims surprised on the upside.

Interested in more futures market commentary?  Explore our Market Dashboards here.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.                  

A subsidiary of Archer Daniels Midland Company.

© 2021 ADM Investor Services International Limited.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now