BASIC & RECENT MARKET INFO

Highlights Just before midday yesterday, negotiations on raising the US debt ceiling broke off, which pretty much sent all markets around the world lower except gold and silver, the traditional place to park money when the end of civilization is approaching. The issue is the House Republicans want no spending increase as part of the increased debt ceiling deal and Democrats say no way will they ever agree to that. The House of Representatives is the only government body whic

Highlights The fast planting progress for corn and beans with a favorable weather forecast kicked those two markets lower Monday evening. The sellers got a boost from a batch of Chinese economic data which showed industrial output and retail sales growth in April was less than expected and real estate investment values fell again. Both domestic and export growth engines were lackluster. Slow economy in China means reduced food demand. That means less pork (pigs eat a lot of

About Inflation "Roger, any thoughts on how bad inflation is going to get? Thanks, Mike" The Consumer Price Index (CPI) is the measure of inflation at the retail level of an economy. The Producer Price Index (PPI) is the measure of inflation at the wholesale level. Both indexes are a statistical estimate constructed using the prices of a sample of representative items whose prices are collected periodically. The representative samples used to calculate CPI and PPI have alr

Highlights Wheat harvest in Central Kansas started yesterday. They must have had some pretty dry weather… This is when wheat harvest usually starts in Texas. April jobs data on Friday was bullish and sent stocks soaring and bonds falling (higher interest rates). Interest rate hikes may not be pausing after all with the US adding jobs for the 13th consecutive month. The government reported the US added 253,000 jobs in April. The market expected 180,000. Where is that recessio

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Highlights Crop conditions and progress reports yesterday afternoon were slightly supportive for wheat. Corn, at 26% planted, was slightly less than trade expected, but in line with the 10-year average. Full report for all crops and states at: https://grainstats.com/ The 6 to 10 day forecast predicts above normal rainfall from Canada to the Gulf of Mexico for all crop areas, including the PNW, except Michigan, Northern Ohio and Eastern Colorado. JP Morgan acquired First R

Highlights Banking regulators decided Friday afternoon First Republic Bank cannot be saved; there is no more time to pursue a rescue through the private sector. The Federal Deposit Insurance Corporation (FDIC) said it was preparing to place First Republic Bank under receivership. Saturday morning, FDIC asked banks for their best and final offers by this afternoon to take over First Republic Bank. JP Morgan and PNC are the most likely bidders. Several other banks, including Ba

Highlights Yesterday was an economic gloom and doom day made even more negative because it might rain in Kansas. The G7 and several market analysts, according to the news media, said the Ukraine grain corridor deal will be renewed. Russia's Lavrov said again the sanction issues are not being resolved and the deal will not be renewed. The market seemed to be calling his bluff. Export deal or not, new crop Ukrainian wheat production is expected to fall nearly 40% with exports

Highlights USDA numbers made no sense for beans and, to lesser extent, corn. Basis, spreads and technical factors are our best predictors of futures prices Argentina’s “soy dollar” program bought very few soybeans the first two days of the program as farmers were not impressed with the 300 pesos per US dollar instead of the current (today) 213 pesos for everyone else in Argentina. Farmers, like all people in Argentina, are trying to survive with inflation over 100% per year,

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