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Column: USDA report confirms tight supplies

Breitinger

The USDA released its monthly estimate of grain supply and demand on Friday at noon Fort Wayne time.

The report confirmed fears 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 U.S. supply outlook, grains dropped in the immediate aftermath of the report, primarily because of 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 U.S. farmers fear bumper crops there could pull global prices lower.

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

Platinum vaults past gold

For most of the last year, platinum had been playing second-fiddle to gold. At one time, platinum was as much as $218 per ounce cheaper than gold, a historically unusual situation.

During 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 important.

As of midday Friday, platinum for April delivery was trading at $1,718 an ounce, while gold was trading at $1,668 an ounce.

Long-term, platinum bulls hope that prices can return to their extremes made in 2008, when platinum reached more than $2,300 per ounce, more than double the price of gold at the time.

Coffee crashes

Coffee futures dropped by more than 8 cents per pound (- 5.4 percent) 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 countries produce more than half of the world’s arabica coffee, the more expensive and flavorful variety preferred by consumers.

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

Opinions are solely the writer's. Walt Breitinger is a commodity futures broker in Valparaiso. He can be reached at (800) 411-3888 or www.indianafutures.com. This is not a solicitation of any order to buy or sell any market.

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