Soyabean prices rise on trimmed forecast

T. Marc Schober submits:Grain prices are back in the headlines and futures prices are limit up as the USDA updated their 2011 plantings and quarterly grain stocks. The USDA expects big increases in corn, wheat, and cotton acres as farmers attempt to capitalize on high grain prices.

WASHINGTON — U.S. producer prices recorded their largest drop in three years in April as gasoline and food costs tumbled, pointing to weak inflation pressures that should give the Federal Reserve latitude to keep monetary policy very accommodative. The Labor Department said on Wednesday its seasonally adjusted producer price index fell 0.7% last month, the biggest decline since February 2010. Wholesale prices had dropped 0.6% in March.

U.S. oil independence is picking up steam. In December, the country lost its position as the world’s largest importer of oil, with shale production climbing faster than expected. Net imports fell below 6 million barrels per day, domestic production increased more than 1 million barrels per day and demand declined by about 700,000 barrels per day.

U.S. oil independence is picking up steam. In December, the country lost its position as the world’s largest importer of oil, with shale production climbing faster than expected. Net imports fell below 6 million barrels per day, domestic production increased more than 1 million barrels per day and demand declined by about 700,000 barrels per day.

OPEC on Wednesday trimmed its forecast for global growth in oil demand in 2013, becoming the second of the world’s closely watched oil forecasters this week to predict weaker consumption. The move by the Organization of the Petroleum Exporting Countries in a monthly report follows a similar downward revision to oil demand growth in 2013 by the U.S. Energy Information Administration on Tuesday.

Equipment stocks showed their true colors Wednesday (04/25), failing to keep pace with the major market indices… While Apple’s positive earnings announcement sent the bulls into a buying frenzy, the major equipment stocks failed to show up at the party.  Bearish action in an otherwise positive environment is definitely a red flag worth digging into (no pun intended)…

If you are old enough to remember the 1970s, the idea that gasoline and stock prices would be correlated seems bizarre. The oil shock years brought stagflation, gas rationing, and a major bear market. And some economists, James Hamilton in particular, believe that the oil price runup of 2008, which helped push retail gas prices in the US over the then-critical $4 a gallon threshold, is what pushed over-levered consumers over the edge and produced the terminal phase of the financial crisis.

As gasoline prices rise above $5/gallon in LA (see video below), analysts are puzzled. Gasoline prices have been on the rise for the past 31 days, which is highly unusual for this time of the year. Typically prices begin rising in March or April as the driving season kicks off.