This week’s action:
Corn Sep up 7 at $5.35
Beans Sep down 7 at $11.92
Feeders August up 7.85 at $241.75
Fats June up 9.325 at $176.60
Hogs June up 10.45 at $86.70
Corn Dec23 up 6 at $5.41
Beans Nov23 down 7 at $11.82
KC Wheat July down 8 at $8.12
Dec corn seasonal Feb 1- today: $5.55
Nov beans seasonal April 1- today: $12.54
Market Recap:
The big story of the week were the livestock contracts with June Live Cattle closing at all-time front month highs and August Feeders very close to doing the same.
New crop December corn futures only finished up 6 cents this week but overcame a dramatic stumble out of the blocks Monday evening. After initially trading down to $5.12 by Wednesday, December futures rallied nearly 30 cents Thursday/Friday on continued hot/dry forecasts and closed at its highest point since late April. Based on chart indications, the market may try to move to the 5.75-5.85 range. It is an important time of the year for new crop marketing and working orders are encouraged if you are optimistic about your production as forecasts can change quickly.
There are many reasons to be bullish, but we are now in June and as a reminder: approximately a year ago we were in the heat of the Ukraine/Russia news when people were forecasting how “obvious” it was we would have $10 corn and $30 wheat and $200 oil.
USDA released the first crop ratings of the season this week. The corn crop was rated 69% good/excellent, which is below last year’s initial rating of 73%. This is mostly in line with the average of the last 10 years. Of the last 10 years, only 2016 saw a noticeable positive increase from the initial ratings.
Corn planting is 92% complete (84% average) and soybeans are 83% planted (65% average).
Through the first four months of its marketing year, Brazil has shipped almost 1.5 billion bushels more soybeans than during the same period last year.
Shipping data shows five vessels of Brazilian beans are either being loaded or are on the way to the U.S. by mid-June. Additional soybean imports from Brazil are expected but are not surprising. USDA has long-estimated imports of 20 million bushels while the U.S. has only received about 7 million bushels so far in the current marketing year ending September 1.
According to Iowa State, the average farmland rent in Iowa climbed 9% year-over year, to $279/acre. This beat the 2013 record of $270.
Forecast:
Limited rains are forecast over the next 10 days and heat is expected to continue. There may be a few brief showers, but coverage and totals are expected to be extremely limited throughout many key producing areas. Should be good lake days ahead for those who partake.
Economy:
Congress was able to navigate the debt ceiling issue this week and has extended it through the 2024 election.
The Dow Jones finished “green” only five days in May, which is the fewest up days in a month in over a decade. Dow Jones was -3.4% for the month. The DOW is up 2.5% the first two days of June.
Chicago PMI was reported at 40.4, well below the expected 47.2 and last rating of 48.6. This is the biggest drop since April 2020.
After a three-year pause, student loan payments will start again August 1. About 40 million borrowers have an average $393/month payment. This will account for about $16 billion/month or $192 billion/year in discretionary spending taken out of the marketplace. This may bleed into housing for younger people as $400/month ($800/couple) could have big impacts on Debt-to-income and monthly payment affordability. A typical monthly mortgage costs about 25% more than rent, according to Redfin.
Flippers in Pheonix are experiencing troubles with a reported 31% of investors selling homes they attempted to flip at a loss, which is more than double the national rate.
Since COVID, New York City has lost 5.3% of its population and San Francisco has lost 7.5%.
Blackjack players lost nearly $1 billion to Las Vegas casinos last year, which is the second-highest loss on record after 2007.
Something that probably means nothing:
In California, unlicensed marijuana sales totaled $8.1 billion in 2022 compared to only $5.4 billion in licensed sales.
With a 10% city cannabis tax, a 15% state excise tax, and a 9.5% sales tax, unlicensed dealers have a minimum 34.5% price advantage. The price system even works in California.
Enjoy your weekend!