News that the Obama administration is paving the way for an increase in oil exports for first time in nearly 40 years provides more evidence of high production and ample supplies in North America. The complicated move, involving the Commerce Department and many technicalities, may be more symbolic at this stage than an overall lifting of export bans but has been heralded by some as a fundamental change in the U.S. oil market policy.
Easing of tensions in Iraq, increased output from Libya and lackluster domestic economic data contributed to lower prices for crude oil and its products last week. The peak of demand for gasoline is typically around the upcoming Fourth of July holiday, while demand for diesel fuel may ebb as builders and farmers have likely already purchased fuel to meet their spring and early summer needs.
By midday Friday, August crude oil was trading slightly lower on the week at $105.50 per barrel, while gasoline and diesel fuel each were cheaper by a few cents per gallon as well.
Grains wait for USDA
Midday Monday, the USDA released two key reports about the grain markets, which will be closely watched by farmers, consumers and traders. The Planted Acreage Report gives the USDA’s estimate of how much corn, soybeans and spring wheat were planted throughout the U.S. this spring, while the Quarterly Grain Stocks Report will tally current U.S. stockpiles of the grains.
With corn and wheat prices relatively low compared to soybeans, many farmers planted more beans this year instead of corn and wheat; the USDA is expected to show more than 82 million acres of beans planted this year, a huge jump from last year’s 76.5 million acres.
The stockpile report is expected to show over 3.7 billion bushels of corn, a relative abundance, nearly 1 billion bushels more corn in storage than in 2013. Meanwhile, soybean stockpiles could be significantly smaller than last year, likely shrinking below 400 million bushels.