USDA Crop Report Confirms Tight Supplies

The USDA released its monthly estimate of grain supply and demand on Friday at 11 AM CST. The report confirmed fears that the United States could run dangerously low on soybeans before this upcoming fall's harvest, with only 125 million bushels expected to remain in storage this fall. This represents only 15 days of excess supply.

Despite the bullish US supply outlook, grains dropped in the in the immediate aftermath of the report, primarily due to rising estimates of South American grains. CONAB, the Brazilian equivalent to the USDA, recently projected record-sized crops for corn and soybeans. Brazil is one of the world's major exporters of corn and soybeans, and some US farmers fear that bumper crops there could pull global prices lower.

As of midday Friday, March corn commanded $7.11 per bushel, March soybeans had sunk to $14.73, and March wheat was worth $7.56.

Platinum Vaults Past Gold

For most of the last year, platinum had been playing second-fiddle to gold. At one point, platinum was as much as $218 per ounce cheaper than gold, a historically unusual situation. Over the last few months, platinum has been staging a comeback, pulled higher by platinum mine strikes in South Africa and by a better global economic outlook. South Africa produces three-quarters of the world's platinum, making supply disruptions from that region especially impactful.

As of midday Friday, platinum for April delivery was worth $1718/oz while gold was worth $1668/oz. Long-term, platinum bulls hope that prices can return to their extremes made in 2008, when platinum reached over $2300 per ounce, more than double the price of gold at the time.

Coffee Crashes

Coffee futures dropped by more than eight cents per pound (-5.4%) this week. Prices are being pressed lower as global supplies of arabica coffee remain abundant amid soft global demand and large harvests coming from Brazil and Colombia this year. Together, those two nations produce more than half of the world's arabica coffee, the more expensive and flavorful variety preferred by consumers.

Over the last two years, prices for arabica coffee have been cut in half, with coffee for March delivery trading for $1.40 per pound on Friday morning.