Commodities Overview Mar 2023 Edition


Read the March 2023 Edition HERE


In March, the USDA increased the U.S. corn carryout, lowered the soybean carryout and left the wheat carryout unchanged. After the report, corn, soybeans and wheat prices traded mixed. May soybean futures dropped from 15.28 to 14.78, and May soymeal traded down from 492 to 472. May soyoil traded down from 59.65 to 54.99. May corn rallied from 6.61 to 7.06, and May Chicago wheat prices increased from 6.61 to 7.06. In March, the USDA increased the U.S. 2022/23 corn carryout to 1,342. The USDA dropped export use 75 mil bu. The USDA left the Brazil corn crop at 125.0 mmt but lowered the Argentina crop from 47.0 to 40.0 and left China corn imports at 18.0 mmt. The USDA raised Ukraine corn exports from 22.5 to 23.5 but there are new concerns about whether or not Russia will extend the Ukraine export corridor deal that expires March 19, if Russia sanctions are not lifted.

Live Cattle

Cattle rallied into the December 2022 holidays, moved sideways in January 2023 and rallied throughout February. When the high beef prices for the holidays ended in December 2022, packer demand and cattle prices went into the doldrums in the first month of the year. However, February 2023 had consumers shopping again. At the same time, February had fewer cattle slaughtered with cattle weights dropping, which is a combination for better prices. Choice boxed beef on February 1, 2023 was $264.76/cwt, by February 15 it was at $275.72/cwt and by February 28 choice boxed beef was at $289.75/cwt.

Lean Hogs

After an $18.00/cwt fall in February 2023 lean hog futures in January 2023, on February 1 the contract bottomed at $73.55/cwt. By February 14 February lean hogs were $75.67/cwt, converging with the CME lean hog index. Speculative trading pushed futures to the highs at the first of the year, but cash fundamentals drove the price to where cash prices and the futures price converged.

Stock Index Futures

S&P 500 futures advanced to a six-month high in early February on the belief that the Federal Open Market Committee could moderate its hawkish monetary policy later this year. However, futures declined more recently on prospects of a more hawkish Federal Reserve. Stock index futures fell sharply after Federal Reserve Chair Powell in his testimony to the Senate Banking Committee and the House Financial Services Committee warned the central bank may need to re-accelerate interest rate hikes.

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US Dollar Index

The U.S. dollar index advanced to a four-month high on March 8 due to expectations of a more hawkish Federal Reserve, including the widely held view that the Federal Open Market Committee would hike its fed funds rate by 50 basis points at its March 22 policy meeting. However, there has been a sudden shift in expectations due financial pressures on the banking system. Financial futures markets are now suggesting there is a significant chance the central bank increase its fed funds rate by only 25 basis points and a lesser probability of no change to interest rates in March.

Euro Currency

The euro currency advanced to a 10-month high in early February due to mostly stronger than expected economic reports. However, there was pressure on the euro later in February as some economic reports came in weaker than expected. The German economy shrank 0.4% on quarter in the last quarter of 2022, which is much worse than the initial estimate of a 0.2% decline. This marked the first drop in GDP in almost two years.

Crude Oil

April crude oil futures fell under the December low of 70.86. Concerns about sluggish near-term demand, especially in the U.S., caused investors to unwind some long positions after a rally that took prices to a peak of almost $81 on February 13. The latest EIA report showed U.S. crude inventories jumped by 16.283 million barrels to 842.973 million, which was the highest level since early October and indicated weakening demand.


April gold futures bottomed at 1810.80 on February 28. Selling pressure was linked to a stronger U.S. dollar and a pickup in Treasury yields after hotter than expected inflation data increased concerns about a more aggressive Federal Reserve. Since those lows were registered, gold prices moved higher to above $1,940, which is close to levels not seen in six weeks, as the risk-off mood continues, and investors remain concerned about the recent banking turmoil.

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