Crude oil inventories in the United States rose this week by 3.034 million barrels for the week ending April 5, according to The American Petroleum Institute (API). Analysts had expected an inventory build of 2.415 million barrels.
This comes after the API reported a 2.286 million barrel dip in crude inventories in the week prior.
On Tuesday, the Department of Energy (DoE) reported that crude oil inventories in the Strategic Petroleum Reserve (SPR) rose by another 0.6 million barrels as of April 5. Inventories are now at 364.2 million barrels-the highest point since last April.
Oil prices were trading down ahead of the API data release on Tuesday as ceasefire talks continue, with losses capped by the failure to make significant progress in reaching a deal that would end the conflict.
At 4:13 pm ET, Brent crude was trading down 0.96% on the day at $89.51, although still up nearly $1 per barrel from this time last week. The U.S. benchmark WTI was also trading down on the day by 1.26% at $85.34, up roughly $.30 per barrel compared to last Tuesday.
Gasoline inventories fell this week by 609,000 barrels, after falling 1.416 million barrels in the week prior. As of last week, gasoline inventories were about 3% below the five-year average for this time of year, according to the latest EIA data.
Distillate inventories rose this week by 120,000 barrels, after last week’s 2.548-million-barrel loss. Distillates were 7% below the five-year average for the week ending March 29, the latest EIA data shows.
Cushing inventories saw a build this week, rising 124,000 barrels after falling by 781,000 barrels in the previous week.
Iranian people are standing in front of an anti-U.S. and anti-Israeli banner during a rally commemorating International Quds Day, also known as Jerusalem Day, and attending a funeral for members of the IRGC Quds Force who were killed in an Israeli air strike in Syria, in Tehran, Iran, on April 5, 2024.
Morteza Nikoubazl | Nurphoto | Getty Images
Crude oil futures rose Wednesday after two days of losses as Israel threatened to attack Iran if the Islamic Republic strikes Israel directly.
The West Texas Intermediate contract for May delivery gained 31 cents, or 0.36%, to $85.54 a barrel. June Brent futures added 28 cents, or 0.31%, to $89.70 a barrel.
The gains from geopolitical tensions were offset slightly by a hotter than expected inflation report. Oil prices pulled back after the consumer price index rose 0.4% for March and 3.5% over the previous year, compared with expected gains of 0.3% and 3.4%, respectively.
Israel warned OPEC member Iran Wednesday it would attack the Islamic Republic if Tehran strikes Israel.
“If Iran attacks from its territory, Israel will react and attack Iran,” Israeli Foreign Minister Israel Katz said on the social media platform X, tagging Supreme Leader Ayatollah Ali Khamenei.
Oil Prices, Energy News and Analysis
Khamenei has threatened to punish Israel after Iran’s consulate in Damascus, Syria, was destroyed in a missile attack last week, killing seven Iranian military officials. Israel has not claimed responsibility for the strike, but the U.S. has assessed that Israel is responsible.
“Consulates and embassies of any country are regarded as the soil of that country. When they attack our consulate, it means that they have attacked our soil,” Khamenei said Wednesday in a speech in Tehran after leading prayers for the Eid al-Fitr holiday.
Oil prices haven fallen more than 1% this week as investors booked profits after last week’s rally. U.S. crude and the global benchmark have gained nearly 20% and 17%, respectively, this year as geopolitical tensions mount against the backdrop of a tightening global crude market.
An industry leader in Melbourne has caused a brew-haha after declaring Aussies aren’t paying enough for their daily cup of coffee.
St Ali coffee roasters chief executive, Lachlan Ward, told the Herald Sun on Tuesday cafes need to “be brave and adjust up” or risk closing their doors.
“The way we are pricing coffee in Australia is not sustainable,” Mr Ward said.
“Unless Australian cafes start adjusting prices up and charging a fair price for what we are making, the independent cafe won’t exist in the future.”
A survey conducted by The Conversation last month of specialty venues across Australia’s capital cities found the average price of a small takeaway flat white is $4.78.
But, Mr Ward said, Aussies should be paying a minimum $5.50 for the beverage (at St Ali’s South Melbourne outpost, the dine-in cost of a regular flat white is $6.50).
“We have incredible operators and beautiful cafes closing down weekly, we can’t look at cutting prices. Cutting isn’t good for any business,” he said.
Given our national penchant for whinging about coffee prices, Mr Ward’s comments, unsurprisingly, proved divisive among consumers.
One man deemed his remarks “idiotic”, while some said they reflected why they now get their caffeine fix at home.
“LOL! I’m sure it’s delicious but when you grab a coffee from 7/11 or Maccas for change (for the few of us that still use coins) how long do you expect to stay in business? People are cutting costs wherever they can but clearly in your fantasy land you believe they will pay a fortune for your coffee. Good luck with that!” another reader wrote in to the Herald Sun.
A third said: “When having a daily coffee becomes a financial consideration rather than a casual enjoyment (due to cost) then sales will drop off quickly – this line is fast approaching.”
“Ordinary middle class people are being squeezed out of any luxuries by elites, government taxes and social engineering,” another complained.
“Consumers will determine the market price. Charge what you want. People will either buy it or not. But don’t complain when you price yourself out of the market.”
Others, however, said the rising price is par for the course given “costs for cafes to make great coffee have risen exponentially”.
“Cafes are the canary in the coal mine. I don’t think the general population understand the financial squeeze most are under, and they are going broke in record numbers,” one pointed out.
As adjunct senior researcher at the University of South Australia, Emma Felton, wrote for The Conversation, “given the quality of our coffee and its global reputation, it shouldn’t surprise us if we’re soon asked to pay a little bit more for our daily brew”.
“By international standards, Australian coffee prices are low. No one wants to pay more for essentials, least of all right now. But our independent cafes are struggling,” she said.
“By not valuing coffee properly, we risk losing the internationally renowned coffee culture we’ve worked so hard to create, and the phenomenal quality of cup we enjoy.”
One of the key factors keeping coffee prices low in Australia, Dr Felton said, is “consumer expectation”.
“For many people coffee is a fundamental part of everyday life, a marker of liveability. Unlike wine or other alcohol, coffee is not considered a luxury or even a treat, where one might expect to pay a little more, or reduce consumption when times are economically tough. We anchor on familiar prices,” she said.
“Because of this, it really hurts cafe owners to put their prices up. In touch with their customer base almost every day, they’re acutely aware of how much inflation can hurt … But specialty cafes face much higher operating costs, and when they’re next to a commodity-grade competitor, customers are typically unwillingly to pay the difference.”
Melbourne Coffee Academy director Charles Skadiang echoed the sentiment in a March interview with Yahoo Finance, pointing to the cost of beer in Australia increasing with indexation.
Mr Skadiang noted there’s far more skill involved in producing a high-quality coffee than pouring a pint.
“The thought of paying $7 for a cup of coffee is outrageous for a lot of people,” he said.
“But the amount of work that goes into it, you’ve got a skilled barista to train someone up to make a great coffee, it takes a lot of time.”
The price of platinum opened at $971.05 per ounce, as of 9 a.m. That’s down 1.40% from the previous day and down 1.69% from the beginning of the year.
The lowest trading price within the last day: $964.10 per ounce. The highest platinum spot price in the last 24 hours: $988.85 per ounce.
USA TODAY Blueprint may earn a commission from this advertiser.
Platinum spot price
Platinum price chart
The chart below shows how the spot price of platinum is trending over the year.
Year to date, platinum is down 1.69%, as of 9 a.m. The 52-week high reached $1,135.49 on April 21, 2023, and the 52-week low dropped to $843.15 on Nov. 10, 2023.
The precious, silvery-colored metal is priced in U.S. dollars. This means that the fluctuations in the value of the U.S. dollar can impact its price.
The price of XPT/USD reflects the value of one ounce of platinum in U.S. dollars, and it is traded like traditional currency pairs. Because platinum trades occur globally, investors can also track the spot price of platinum in other currencies, such as XPT/EUR for euros and XPT/GBP for British pounds.
Factors that can influence the price of platinum include changes in demand, geopolitical events and tensions in major platinum-producing countries. Of course, investor opinion and speculation can also affect prices.
Precious metals spot prices
Platinum is one of four main precious metals investors can trade via physical bullion, exchange-traded products or futures contracts. Gold, silver and palladium spot prices are also updated 24/7 in various currencies.
Platinum vs. gold price
Currently, platinum trades at $971.05 per ounce, as of 9 a.m., compared to gold, which trades at $2,338.47 per ounce. Year to date, platinum prices are down by 1.69% and gold prices are up by 13.17%.
“Historically, platinum has often been more expensive than gold due to its relative scarcity and unique properties. However, the price of platinum can fluctuate in response to changing market conditions,” said John Bergquist, president of Elysium Financial.
Political instability and supply disruptions in major platinum-producing regions like South Africa and Russia affect prices.
The silvery metal also tends to be a less reliable store of value than gold.
While historically, platinum has been pricier than gold, that flip-flopped briefly in August 2011. When looking at the gold-to-platinum price ratio, platinum was priced above gold from January 2013 until December 2014. Since then, gold has more than doubled its value compared to platinum prices.
Platinum price history
Like any metal, the price of platinum can be volatile. Various factors affect it, the most significant being supply and demand dynamics. Other factors, such as economic conditions, geopolitical events, and changes in industrial and investment demand, can also impact the price of platinum.
At the start of the new millennium, the precious metal’s spot price was around $420. Fast-forward over 20 years, and the current price of platinum has more than doubled.
The spot price soared to new heights, trading in February 2008 at around $2,200 per troy ounce. In November of that year, the price returned to less than $1,000.
Platinum’s spot price has fluctuated between around $800 to $1,400 for the past decade, hovering around the $1,000 threshold on average.
Platinum prices today remain historically low. Prices dropped as low as $623.50 in March 2020 during the COVID-19 pandemic. While prices have recovered, platinum is nowhere near its all-time high of $2,213.20, set on March 3, 2008.
Platinum futures
Futures contracts let investors speculate on the future price movements of an underlying asset like platinum.
These financial contracts represent an agreement between two parties to trade a set amount of platinum at a specified price at a future date. They can be settled by exchanging the physical commodity or cash in place of the commodity.
Futures contracts differ from spot prices in that futures contracts establish a future price whereas spot prices are for immediate delivery. These contracts can be fulfilled by trading the physical commodity or exchanging cash in place of the underlying asset. They are usually traded through an exchange.
Platinum as an investment
The automotive industry creates the highest demand for platinum. Platinum is a key component in manufacturing catalytic converters, which are responsible for reducing vehicle emissions.
In addition to the automotive industry, platinum is widely used in the industrial industry to create medical products, nitric acid and glass. As the demand for these products rises, so does the price of platinum.
It is anticipated that platinum will play an essential role in the development of hydrogen technology. Platinum is used to produce carbon-free hydrogen from renewable energy.
“If hydrogen-based power meets expectations in the coming decade, then one could expect a material demand tailwind in platinum,” said Stash Graham, managing director of Graham Capital Wealth Management.
Precious metals such as platinum, gold and silver have long been used to diversify an investment portfolio.
When choosing investments, it is crucial to consider potential drawbacks. While there may be an increase in the demand for platinum, other factors may throw a wrench in the investment benefits.
When considering an investment, it is essential to consider your current holdings and individual financial goals.
Platinum is rarer than both silver and gold, which could make it attractive to investors seeking a scarce metal. This practice helps protect other holdings, such as stocks, in an economic downturn. Investing in platinum can help balance inflation and economic uncertainties.
Frequently asked questions (FAQs)
The London Bullion Market Association is responsible for price auctions of platinum and other industrial metals.
Platinum pricing is set independently from gold and silver prices, yet there is a historical correlation between the prices of these metals. Although platinum is rarer than silver and gold, metals with industrial uses tend to fluctuate similarly.
At least three people have been reported dead and five more injured following an explosion at a hydroelectric plant in northern Italy, the Associated Press reported on Wednesday, noting that at least four others remain missing in the accident in the latest update.
“We are working, but with a few hopes of finding missing people alive,” a firefighter spokesperson told AP on Wednesday, adding that. “We are working in very complex and difficult conditions. The floor hit by the explosion was dry and now has 50 centimeters (19 inches) of water.”
The explosion took place after the collapse of the underground structure during maintenance work on Italian utility giant Enel’s Bargi plant, south of the city of Bologna. The hydroelectric facility is an aging, massive, nine-story underground behemoth, and collapse of the structure led to a fire and flooding, AP reported, citing the local media.
“With reference to the serious accident that occurred at the Bargi power plant near Bologna, Italy, Enel Green Power once again expresses its deepest condolences and closeness to all the victims and their families,” Enel said in a statement, noting that Enel Green Power CEO Salvatore Bernabei visited the site of the disaster to personally coordinate with the authorities.
According to Enel, maintenance testing for a second electricity generation group was underway when the structure collapsed. There was no damage to the dam, according to Enel.
At the time of writing, the search effort for those reported missing was still underway. According to Italy’s SKY news, three of those injured remain in serious condition.
The deadly explosion highlights an increasingly sensitive worker safety issue in Italy, prompting two of the biggest trade unions to announce a four-hour nationwide strike for Thursday, AP reports.
WTI futures traded at $85.80 per barrel, as of 9 a.m. ET. Year to date, WTI prices are up by 16.83%.
Brent futures traded around $90.34/bbl, a drop of 0.45% in the last 24 hours. Year to date, Brent prices are up by 14.27%.
What is the West Texas Intermediate (WTI) crude oil price today?
WTI futures fell by 0.61% to $85.80/bbl, as of 9 a.m. ET.
WTI oil price chart
West Texas Intermediate prices have drifted lower in 2024, but prices are up 44.59% over the past three years.
WTI crude fell to its 52-week low of $64.00 per barrel on May 3, 2023. It reached its 52-week high of $95.52 on Sep. 27, 2023. That’s 10.18% higher than the current futures price.
Brent crude oil price
Brent futures fell by 0.45% to $90.34/bbl, as of 9 a.m. ET.
Brent crude oil price chart
Brent crude oil is generally subject to the same supply and demand factors that influence WTI crude prices, so the long-term price chart looks extremely similar to the WTI chart.
Brent crude oil prices hit their all-time high of $147.50/bbl during the oil market boom in July 2008. However, WTI futures contract prices dropped to as low as negative $40/bbl on April 20, 2020, driven largely by a lack of U.S. storage options during the COVID-19 pandemic. Brent futures contracts remained well above zero, bottoming at around $25/bbl that day.
Brent crude fell to its 52-week low of $68.20 per barrel on May 3, 2023. It reached its 52-week high of $96.62 on Sep. 27, 2023. That’s 0.06% higher than the current futures price.
What is crude oil?
Crude oil is one of the most important commodities in the world, serving as a key energy source and as a raw material used to produce plastics, chemicals and other products. Nearly all the crude oil imported or produced in the U.S. is refined into petroleum products, including gasoline, diesel fuel and heating oil.
The prices of U.S. WTI crude oil and international Brent crude oil are influenced by several factors that can change the market’s supply and demand balance.
The weather in the U.S. market can drastically alter near-term demand for heating oil and natural gas, sending crude oil prices higher.
Natural disasters and geopolitical conflicts worldwide can disrupt production and create oil supply shortages. The U.S. and global economies experience much higher industrial energy demand during periods of strong economic growth and lower demand during economic downturns. Finally, the Organization of the Petroleum Exporting Countries can significantly alter global crude oil supplies by increasing or cutting production.
WTI
WTI crude is a blend of oils extracted from U.S. oilfields in Texas, North Dakota and Louisiana and is delivered to Cushing, Oklahoma.
WTI oil has an American Petroleum Institute gravity of 39.6 degrees, considered “light.” WTI also has a sulfur content of just 0.24%, making it very “sweet.” WTI crude oil is typically the benchmark for U.S. oil prices in the trading world.
Brent crude
Brent crude is a sweet, light blend of oils extracted from the North Sea near Europe.
Brent crude is oil extracted from the Brent, Ekofisk, Forties and Oseberg oil fields. Brent has an API gravity of 38 degrees and a sulfur content of 0.4%, making it slightly heavier and less sweet than WTI. Brent is typically used as a benchmark for international oil markets, such as markets in the Middle East, Europe and Africa.
WTI vs. Brent crude
WTI and Brent crude oil blends are both sweet, light crude oil bends used as benchmarks in financial markets. However, there are five key differences between WTI and Brent:
Extraction: WTI is extracted from U.S. oilfields in Texas, North Dakota and Louisiana, while Brent crude is extracted from the North Sea near Europe.
Composition: WTI is slightly lighter and sweeter than Brent oil.
Geopolitics: WTI prices are more heavily influenced by U.S. politics and policies, while international politics and embargoes have a greater influence on Brent prices.
Exchange: Brent crude futures contracts are primarily traded on the Intercontinental Exchange (ICE), while WTI futures contracts are primarily traded on the New York Mercantile Exchange (NYMEX).
Pricing: WTI and Brent crude oil prices are very highly correlated, but Brent oil has historically traded at a slight pricing premium to WTI.
Brent Crude/WTI spread
The difference between the spot price of Brent crude and WTI crude is called the Brent/WTI spread.
The Brent/WTI spread has historically ranged between $4/bbl and $8/bbl, but it can expand or contract based on factors related to U.S. and international supply and demand conditions. For example, the Brent/WTI spread hit nearly $14/bbl in April 2011 when protests sparked market fears of significant oil supply disruptions in the Middle East.
Crude oil futures prices
One of the most popular ways investors speculate on crude oil and other commodity prices is by trading futures contracts. Futures contracts are agreements to buy or sell a standardized amount of an asset at a specific price on a particular future date.
WTI crude futures
The most popular WTI crude oil futures contracts are traded on the NYMEX. Each CL contract represents 1,000 barrels of oil, and the contracts trade Sunday to Friday from 6 p.m. to 5 p.m. U.S. ET.
Brent crude futures
The most popular Brent Crude Oil futures contracts are traded on the ICE under the symbol B, but investors can also trade the contracts on the CME Globex trading platform under the symbol BZ. Trading hours for Brent futures on CME are the same as WTI futures: Sunday to Friday from 6 p.m. to 5 p.m. U.S. ET. But Brent futures on ICE trade from 8 p.m. to 6 p.m. U.S. ET on ICE business days.
Frequently asked questions (FAQs)
To buy and sell crude oil futures contracts, you must open a brokerage account that offers commodity futures trading. The primary futures contracts for WTI crude oil trades on the NYMEX under CL. The primary futures contracts for Brent crude oil trades on the ICE under the symbol B.
Anyone can buy or sell popular oil stocks simply by opening and funding a standard brokerage account.
Popular oil stocks include global oil majors like Exxon Mobil (XOM), oil and gas exploration and production companies like ConocoPhillips (COP), and oil and gas midstream pipeline companies like Enbridge (ENB).
Saudi Arabian oil is neither WTI, extracted in the U.S., nor Brent, extracted in the North Sea near Europe. Saudi Arabia’s state-owned oil company, Saudi Aramco, uses the Dubai/Oman crude oil benchmark when pricing its oil for delivery to Asia.
Oil prices fell on Wednesday, April 10, after US government data showed earlier today that crude oil and fuel inventories rose by much more than expected on weak demand and lower oil exports. US crude stocks climbed by 5.8 million barrels in the week ended April 5, more than double of analysts’ expectations.
Brent crude futures dropped 28 cents, or 0.3 per cent, to $89.14 per barrel, while US West Texas Intermediate (WTI) crude futures fell 35 cents, or 0.4 per cent, to $84.88. In the previous session, both Brent and WTI fell more than one per cent. Coming to domestic prices, crude oil futures last traded 0.18 per cent higher at ₹7,115 per barrel on the multi commodity exchange (MCX) platform.
-Refined products inventories rose unexpectedly with gasoline up by 700,000 barrels and distillate stocks by 1.7 million barrels. The US Energy Information Administration (EIA) data also showed a 2.1 million barrel per day (bpd) drop in oil product supplied, a proxy for fuel demand, and a 2.7 million bpd drop in crude oil exports.
-Separately, the US EIA sharply raised its forecast for crude oil output. It now expects an increase of 280,000 bpd to 13.21 million bpd in 2024 – which is higher from its earlier forecast of a 20,000 bpd increase in output.
-The commander of the Revolutionary Guard’s navy in Iran said it could close the Strait of Hormuz if necessary. About a fifth of the volume of the world’s total oil consumption passes through the strait daily.
-On Tuesday, Hamas said that an Israeli proposal on a ceasefire did not meet demands of Palestinian militant factions, but it would study the offer further and deliver its response to mediators, according to news agency Reuters.
-A continuing conflict in the Middle-East could drag in other countries, particularly Hamas-backer Iran, the third-largest producer in the Organization of the Petroleum Exporting Countries (OPEC) cartel, led by Saudi Arabia.
The US EIA said it expects Brent crude prices to average $88.55 a barrel in 2024, up from a previous forecast of $87 per barrel. Analysts said that crude oil experienced profit-taking amidst a stable dollar index and an increase in US bond yields. However, concerns regarding potential retaliation from Iran against Israel will push oil prices.
‘’We do not anticipate any significant downside in crude oil shortly. However, we do not foresee Brent crude reaching $100 levels, as we anticipate that OPEC may expand output by 0.5 million barrels per day if the crude oil market continues to be in deficit. Our base case is for crude to trade in a range from $85 to $95 levels in the near future,” said Amit Goel, Co-Founder & Chief Global Strategist, Pace 360.
With demand holding up and growing in CY24, the crude oil market faces a deficit of almost one million bpd, highlighted commodity analysts.
‘’Expectations for the trading session suggest continued volatility in crude oil prices. Support for crude oil stands at $84.05–83.40, with resistance at $85.50-86.20 for today’s session. In terms of INR, crude oil is anticipated to find support around ₹7,020-6,930, while facing resistance at ₹7,190-7,280,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏Click here to know more.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it’s all here, just a click away! Login Now!
OKLAHOMA CITY (AP) — Two Texas-based natural gas companies are being sued by Oklahoma, which alleges they fraudulently reduced gas supplies to send prices soaring during Winter Storm Uri, making huge profits while thousands shivered across the state.
The lawsuits are Oklahoma’s first against natural gas operators over earnings during the 2021 storm. The suits were filed against Dallas-based ET Gathering & Processing, which acquired Enable Midstream Partners in 2021, and Houston-based Symmetry Energy Solutions.
Both lawsuits seek actual and punitive damages, as well as a share of any profits that resulted from wrongdoing. Oklahoma’s Republican attorney general, Gentner Drummond, said his office intends to pursue additional litigation against other companies that may have engaged in market manipulation.
People are also reading…
“I believe the level of fraud perpetrated on Oklahomans during Winter Storm Uri is both staggering and unconscionable,” Drummond said in a statement. “While many companies conducted themselves above board during that trying time, our analysis indicates that some bad actors reaped billions of dollars in ill-gotten gains.”
A Symmetry spokesperson said in a statement that the company “adamantly denies the unfounded allegations in the lawsuit, which it will vigorously defend.” A message seeking comment left with ET was not immediately returned. The lawsuits were filed in Osage County, Oklahoma.
The devastating storm sent temperatures plummeting across the country and left millions of people without power.
Kansas Attorney General Kris Kobach filed a similar lawsuit in federal court in December against a natural gas marketer operating in that state. In Texas, which was also hit hard by the deadly storm, the electric utility Griddy Energy reached a settlement with state regulators over crushing electric bills its customers received.
Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.
The business news you need
Get the latest local business news delivered FREE to your inbox weekly.
Markets had been bracing for high 2024 corn acreage, but USDA’s farmer-surveyed Prospective Plantings report found that 2024 corn acreage is going to see a bigger decline than what had previously been expected. Farmers only expect to plant 90.0 million acres of corn this spring, down nearly 5% (4.6 million acres) from year ago sowings. Chicago futures prices rose nearly 3% higher ($0.11-$0.13/bushel) immediately following the report on the smaller supply estimate as well as higher-than-expected December through March corn consumption.
Soybean acres are forecast to see a 2.9-million-acre annual increase, rising to 86.5 million acres planted in 2024. That’s going to be the fifth-largest planted soybean acreage in U.S. record books if farmers are able to hit that target in the coming weeks.
“I think it is important to remember that Thursday’s numbers are intentions, not an actual estimate of what will be planted,” according to Farm Futures grain market analyst Jacqueline Holland. “But as I’ve mentioned earlier, some of the trends are telling. The shift towards a 50-50 split for corn and soybean acreage is very apparent this year. Crop budgets for soybeans are currently holding on to very slight profits, while corn budgets are far into the red so growers that opted to wait until this spring to make acreage decisions likely found themselves favoring soybean acres over corn this year.”
The past three Farm Futures grower surveys in August 2023, January 2024 and March 2024 all pointed to a one-to-one acreage shift between corn and soybeans, says Holland, who added that she was a little surprised that today’s Prospective Plantings report did not reflect a similar dynamic.
Planting intentions
USDA estimates that 2024 corn plantings will reach 90.025 million acres. That’s a 4-million-acre-plus drop compared to 2023’s footprint of 94.641 million acres. It was also noticeably lower than the average trade guess of 91.776 million acres and below the agency’s estimate of 91.000 acres offered at its Agricultural Outlook Forum in February.
“Corn acres fell by 4.6 million while soybeans gained 2.9 million acres on the year,” Holland says. “Farm Futures’ guess was closer to a 2.3-million-acre shift between the two crops. I think that this shows that farmers are still not yet willing to go ‘all in’ on soybean acres ahead of construction wrapping up on crush plants across the Upper Midwest and are waiting for the demand to come closer to the farmgate.”
For soybeans, USDA is expecting 2024 plantings to reach 86.510 million acres. That’s nearly 3 million acres more than 2023’s final tally and very close to the average trade guess of 86.530 million acres. It was also almost 1 million acres lower than the agency’s estimate of 87.500 million acres offered at its Agricultural Outlook Forum in February.
USDA thinks all-wheat plantings will reach 47.498 million acres for the 2023/24 season. That’s more than 2 million acres lower than the prior season’s footprint of 49.575 million acres and slightly above the average analyst estimate of 47.330 million acres. It’s also nearly half a million acres above the agency’s estimate made at its Agricultural Outlook Forum in February.
“While Farm Futures survey respondents had indicated planting fewer spring wheat and durum acres relative to last year, USDA’s Prospective Plantings report found increases in farmer expectations of planted acreage for these crops,” according to Holland. “Spring wheat prices have been competing with soybeans in the Northern Plains over the past few months, so that wasn’t a surprise.”
But the uptick in canola, chickpeas, and edible beans and peas signaled that producers in the Northern Plains have plenty of other options than corn acres to glean profits this year, Holland also points out. Further south, rice and cotton are expected to see an upswing in planted acreage this year, she says.
“I was most surprised to see a downturn in hay acres expected to be harvested this year in Thursday’s report,” Holland says. “Not only did corn lose acres relative to last year, but small grain acreage is also expected to contract compared to 2023. Sorghum, oats, barley, and winter wheat acres were all reduced from last year, giving way to oilseeds and edible legumes.”
USDA will revisit these acreage numbers in June, when farmers will be surveyed based on what they actually planted – if they are finished by that time, Holland also notes, and with every subsequent USDA report throughout the growing season, these estimates will become more reliable.
“So, if you are still convinced that there are going to be more corn acres planted in 2024, there is a good chance you could see that materialize in the June 30 report,” Holland concludes.
Taking stock
Corn ending stocks moved from 7,396,403 bushels through March 1, 2023, up to 8,347,255 bushels through March 1, 2024. That was slightly below the average trade estimate of 8.427,000 bushels. Of the total, 5.079 million bushels were stored on farm, with the remaining 3.268 million bushels stored off farm.
Soybean ending stocks also increased year-over-year, moving from 1,686,632 bushels through March 1, 2023, up to 1,845,079 bushels through March 1, 2024. That was also slightly higher than the average trade guess of 1,828,000 bushels. Of the total, 933,000 bushels were stored on farm, with the remaining 912,079 bushels stored off farm.
All-wheat ending stocks increased from 941,218 bushels a year ago up to 1,087,449 bushels through March 1, 2024. That was a bit above the average analyst estimate of 1,044,000 bushels. Of the total, 271,930 bushels were stored on farm, with the remaining 815,519 bushels stored off farm.
An industry leader in Melbourne has called on Australian cafes to “be brave” and boost their coffee prices or risk closing their doors.
St Ali coffee roasters chief executive, Lachlan Ward, told the Herald Sun on Tuesday cafes need to “be brave and adjust up” or risk closing their doors.
“The way we are pricing coffee in Australia is not sustainable,” Mr Ward said.
“Unless Australian cafes start adjusting prices up and charging a fair price for what we are making, the independent cafe won’t exist in the future.”
A survey conducted by The Conversation last month of specialty venues across Australia’s capital cities found the average price of a small takeaway flat white is $4.78.
But, Mr Ward said, Aussies should be paying a minimum $5.50 for the beverage (at St Ali’s South Melbourne outpost, the dine-in cost of a regular flat white is $6.50).
“We have incredible operators and beautiful cafes closing down weekly, we can’t look at cutting prices. Cutting isn’t good for any business,” he said.
‘The way we are pricing coffee in Australia is not sustainable.’ Picture: Linda Higginson
St Ali chief executive Lachlan Ward. Picture: Facebook
Given our national penchant for whinging about coffee prices, Mr Ward’s comments, unsurprisingly, proved divisive among consumers.
One man deemed his remarks “idiotic”, while some said they reflected why they now get their caffeine fix at home.
“LOL! I’m sure it’s delicious but when you grab a coffee from 7/11 or Maccas for change (for the few of us that still use coins) how long do you expect to stay in business? People are cutting costs wherever they can but clearly in your fantasy land you believe they will pay a fortune for your coffee. Good luck with that!” another reader wrote in to the Herald Sun.
One of the key factors keeping coffee prices low in Australia is ‘consumer expectation’. Picture: NCA NewsWire/Nicki Connolly
A third said: “When having a daily coffee becomes a financial consideration rather than a casual enjoyment (due to cost) then sales will drop off quickly – this line is fast approaching.”
“Ordinary middle class people are being squeezed out of any luxuries by elites, government taxes and social engineering,” another complained.
“Consumers will determine the market price. Charge what you want. People will either buy it or not. But don’t complain when you price yourself out of the market.” Loading embed…
Others, however, said the rising price is par for the course given “costs for cafes to make great coffee have risen exponentially”.
“Cafes are the canary in the coal mine. I don’t think the general population understand the financial squeeze most are under, and they are going broke in record numbers,” one pointed out.
As adjunct senior researcher at the University of South Australia, Emma Felton, wrote for The Conversation, “given the quality of our coffee and its global reputation, it shouldn’t surprise us if we’re soon asked to pay a little bit more for our daily brew”.
“By international standards, Australian coffee prices are low. No one wants to pay more for essentials, least of all right now. But our independent cafes are struggling,” she said.
“By not valuing coffee properly, we risk losing the internationally renowned coffee culture we’ve worked so hard to create, and the phenomenal quality of cup we enjoy.”
Data compiled by The Conversation found the average price of a small takeaway flat white at specialty venues is $4.78. Picture: The Conversation
One of the key factors keeping coffee prices low in Australia, Dr Felton said, is “consumer expectation”.
“For many people coffee is a fundamental part of everyday life, a marker of liveability. Unlike wine or other alcohol, coffee is not considered a luxury or even a treat, where one might expect to pay a little more, or reduce consumption when times are economically tough. We anchor on familiar prices,” she said.
“Because of this, it really hurts cafe owners to put their prices up. In touch with their customer base almost every day, they’re acutely aware of how much inflation can hurt … But specialty cafes face much higher operating costs, and when they’re next to a commodity-grade competitor, customers are typically unwillingly to pay the difference.”
Melbourne Coffee Academy director Charles Skadiang echoed the sentiment in a March interview with Yahoo Finance, pointing to the cost of beer in Australia increasing with indexation.
Mr Skadiang noted there’s far more skill involved in producing a high-quality coffee than pouring a pint.
“The thought of paying $7 for a cup of coffee is outrageous for a lot of people,” he said.
“But the amount of work that goes into it, you’ve got a skilled barista to train someone up to make a great coffee, it takes a lot of time.”
