BASIC & RECENT MARKET INFO

Highlights The USDA will issue its April Supply and Demand (S&D) Report today at 10 AM Mountain Time. The expected numbers in million bushels for US and mts for the world are: If USDA throws out a surprise today, it most likely will be a bullish soybean carryover. Why? The USDA took an inventory as of December first and again March first. Every week, USDA reports how many beans were exported and every month, USDA reports how many beans were crushed. So, December first invent

Highlights On Friday, First Republic Bank filed a regulatory document that it will suspend quarterly cash dividends on its preferred stock “as a measure of prudent oversight.” The preferred stock dividends have been ~20%. First Republic Bank common stock has lost 90% of its value since early March. Banking problems are short term bearish for commodities. Will this action by First Republic Bank create another banking collapse fear? A bank failure could happen without warning a

Outlook for Production Agriculture as of April 2019 (and April 2023 update) Long Term Outlook World population is increasing and more...

American markets are closed today and will begin trading normal time Sunday evening. Highlights The US initial claims for unemployment benefits dropped 18,000 to a seasonally adjusted 228,000 for the week ended April 1, which was 28,000 more claims than expected. Worse yet, data for last week’s new unemployment claims was revised higher by a whopping 48,000. The Canadian economy added more jobs than expected in March and the unemployment rate remained near a record low for a

Highlights There was a lot of US and world economic news yesterday. While none of it was terrible, none of it was as “good” as expected. For example, unexpectedly, the Central Banks of Australia and New Zealand raised interest rates by 50 basis points (half a percent). Argentina did announce its third soy/dollar deal, which begins Saturday. The conversion will be 300 pesos per US dollar vs. the official exchange rate of 210 pesos. That is a 42.5% over the market premium. Tha

Highlights US manufacturing activity projected for April fell to the lowest level in the last 14 years. All components of the industrial Purchasing Managers Index (PMI) were below 50 for the first time since 2009. Of the 18 key industries, contraction was recorded in 12. The industries with a PMI above 50 were oil, coal, and separate segments of the military-industrial complex, and the aircraft industry. On any other day, that news would have sent crude oil $2 to $3 lower, so

Highlights We consider the biggest short-term bearish threat is another banking “crisis” to scare the markets. We put the risk of that happening at 50/50, but if that does happen, the sell-off will be short-lived and recovery will be more quickly than the sell off we suffered through three weeks ago. Maybe we can take some comfort from the news Federal Reserve officials are expressing confidence they have nipped a potential financial crisis in the bud. Now they face a diffi

Highlights There is a growing sense of relief and optimism that the banking shock is abating, the Federal Reserve’s vice chairman for supervision, Michael Barr, and FDIC Chairman Martin Gruenberg told US lawmakers on Tuesday. They said that depositor funds in U.S. banks are safe and sound. The market believed them for at least one day. They also said tougher regulations will be forthcoming. China announced it will ease regulatory crackdowns and support private enterprises’ t

Highlights No bank failures yesterday; no rumors of bank failures and commodities had a good day. That confirms the sell-off from the day Silicon Valley Bank (SVB) failed on the 10th of this month until last Thursday was 95% fear of a banking system collapse and 5% due to all other news. However, late last evening, rumors were the Charles Schwab brokerage and investment firm is having some financial woes. After the stock lost 25% of its value the past two months, their balan

Highlights First Republic Bank stock was up 30% yesterday as it continues to stave-off collapse with other banks’ money. That helped stocks and crude oil and hurt gold and the US dollar index, which should have helped grain prices. Soybeans had a bad day yesterday supposedly because Brazil’s monster crop continues to keep Brazil’s infrastructure jammed and overflowing as their basis continues to weaken. What good is cheap soybeans to soybean importers if they must wait thre

Highlights The stock value of First Republic Bank (FRB) slid to an all-time low yesterday after S&P Global lowered FRB’s credit rating for the second time in a week. FRB has moved to the top of the list of “most likely to fail” banks after Credit Suisse was absorbed by Switzerland’s largest bank. FRB was second on that list the day SVB was closed by regulators. Since then, FRB has been extended quite a few “lifelines” and should be much less likely to fail now than it was on

Highlights The Swiss National Bank is financially backing the sale of troubled Credit Suisse to UBS, the two largest banks in Switzerland. The banks agreed on a price per share Sunday afternoon and Credit Suisse stated on their website the deal has been made. The Banks of Canada, England, Japan, EU, Federal Reserve, and the Swiss National Bank announced late last evening a coordinated action to enhance liquidity of the U.S. Dollar for international trade and confidence. Asi

Highlights Oleksandr Kubrakov is Vice Prime Minister for the Restoration of Ukraine. He reported yesterday The Black Sea Grain Initiative (Ukraine’s corridor to export grain) has been extended for 120 days. Elena Faige Neroba is with Maxi Grain in Kyiv, Ukraine. She said Russia notified Turkey and the UN that the grain deal was extended for 60 days. UBS AG is the largest Swiss bank. It has asked the Swiss government to cover about $6 billion in costs if it were to buy 167-ye

Highlights Late yesterday, the Manhattan District Attorney asked for a meeting with law enforcement officials ahead of a possible indictment of Donald Trump. The DA said he is planning to have Donald Trump handcuffed and arrested next week over hush money Trump’s attorney paid to Stormy Daniels to keep her quiet in 2016. What this event would do to commodity prices is probably bearish short term and then bullish after a week or so. Hopefully, the nation does not have to go th

Tidbits USDA announced yesterday morning the sale of 641,000 mts of old crop corn to China. The three-day old crop corn sales to China total is 1.92 million mts (75.6 million bushels). The corn basis is firming at the river and Great Lake terminals and the May futures corn contract has gained 7¢ on July corn this week and 17¢ since last fall. May will gain another 10 to 20¢ by mid-Arpil now that corn exports are moving. Last year, May corn went 44¢ over July. So many farmer

Tidbits All markets rotated 180° yesterday from expectations of a stronger dollar and higher interest rates to a return to an easy money policy. The pivot of market expectations in such a few days has never happened before. It is truly a historic event. Your great-grandchildren will be reading about the events of this past weekend when they are working on their MBA or Ph.D. in macroeconomics. On Thursday, the market had priced-in an 81% probability the Fed would raise intere

Economy Last summer, we explained how the Federal Reserve’s management of the US economy had returned to the confusing policy of the late 1970’s and early 1980’s when good economic news was bad for commodity prices and bad economic news was bullish for commodity prices. How can that happen? Paper currency is no longer tied to something of value such as gold, silver, or in the old days, salt. People with paper currency used to be able to go to a bank and redeem the paper for

Tidbits Many times this winter we have commented about how good news for the US economy was bad news for grain and oilseed prices because the Fed is trying to choke a stronger economy with tighter credit. On Thursday and Friday, the yield (interest rate) on two-year maturity US Treasury notes declined over 50 basis points (one-half percent). That is the sharpest decline since the world’s fourth largest investment firm, Lehman Brothers, went belly-up in September 2008 during

Friday morning We received more good economic news for the US economy at 7:30 Central this morning. The US economy added 311,000 jobs in February and the market expected only 205,000 jobs. The market knows a better economy means the Federal Reserve thinks that means more inflation, so the Fed will increase interest rates faster and higher than expected before the report was released. In order to choke the economy to slow inflation; higher interest rates and a good economy m

Highlights The Chinese spy balloon drifting across North America was shot down near the South Carolina Coast by the U.S. military around 2:40 PM Eastern on Saturday. U.S. Navy ships were deployed and preparing for the recovery operation. Military analysts think the balloon was remotely controlled to some extent as it crossed the USA at 60,000 feet. The balloon was over Alaska for a week before heading southeast. The Dept of Defense (DOD) confirmed late Friday a second Chines