This week’s action:
Corn May down 23 at $6.18
Beans May down 12 at $15.07
KC Wheat May down 12 at $8.03
Feeders April up 1.60 at $197.60
Fats April down 1.15 at $164.35
Hogs April up 2.75 at $87.25
Corn Dec23 down 13 at $5.59
Beans Nov23 down 20 at $13.56
KC Wheat July23 down 14 at $7.93
The WASDE released Wednesday morning didn’t have much for surprises. Corn export projections were lowered by 75 million bushels for the year while soybean export projections raised 25 million based on current export pace. This raised US corn ending stocks and lowered soybean ending stocks.
For South American production, Brazil was left unchanged from last month while Argentina corn production was lowered by 7 million metric tons and soybeans lowered 8 million metric tons to the ongoing drought. The lost production in Argentina will be offset by higher production in Brazil, but the biggest issue for US futures prices is that demand is not shifting to US exports, especially in corn.
The next major report will be the March 31st planting intentions and then US weather and planting pace will be the focus from there on.
From a strict seasonal standpoint, we are approximately 20% through a typical December corn marketing timeline.
The National Weather Service said La Nina conditions have officially ended. The NWS expects neutral conditions through this summer with the possibility of El Nino arriving by fall. El Nino generally produces dryer and warmer weather for the Northern US and wetter weather in the Southeast.
It has been a dramatic week for the banking industry. Silvergate, a crypto-focused lending bank, announced it is shutting down operations and liquidating assets.
The news that Silicon Valley Bank (the 16th largest bank in America) was insolvent has become the main story. The bank was seized by regulators after it failed to raise capital or be purchased by another bank. It is the second largest bank failure on record.
Under law, all accounts less than $250,000 are insured by the FDIC and the agency has said all insured accounts will have access to their money by Monday. A staggering 87% of all SVB accounts are uninsured and will have to wait as the FDIC sells off bank assets to hopefully receive funds.
In a nutshell- this is what happened:
Their bond portfolio was locked in at very low interest rates from the last few years. As more and more depositors withdrew money, they had to sell these bonds at a loss of around $1.8 billion.
Theoretically the bank had enough assets to cover deposits, but the assets were not able to be turned into cash without incurring huge losses. This could affect other banks as well.
FDIC recently reported US banks’ unrealized losses on available-for-sale and held-to-maturity securities totaled $620 billion as of December 31. That is up from just $8 billion before the FED began raising rates.
Something that probably means nothing:
Cruise ships use up to 250 tons of fuel per day. That is equivalent to approximately 80,645 gallons of gasoline daily.
Enjoy your weekend!