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This week’s action:
Corn Sep up 21 at $5.28
Beans Sep up 25 at $14.27
Fats August down 50c at $179.825
Feeders August down 70c at $245.75
Hogs August up 4.925 at $100.90
Corn Dec23 up 23 at $5.37
Beans Nov23 up 29 at $14.02
KC Wheat Sep23 up 35 at $8.61
Corn Dec24 up 12 at $5.30
Beans Nov24 up 22 at $12.93
KC Wheat July24 up 30 at $8.17
Seasonal Averages:
Dec corn Feb 1- today: $5.51 (insurance price $5.91)
Nov beans April 1- today: $12.69 (insurance price $13.76)
Market Recap:
Grains got a boost from warmer and dryer forecasts in addition to increased geopolitical stress surrounding Russia and Ukraine. New crop corn started the week strong but hit resistance around the 50% retracement of the mid-June rally and seems to have run into some profit-taking here to finish the day Friday. New crop beans broke through resistance in the 13.70s and hit 14.28 on Wednesday, levels we haven’t seen since summer of 2022. Traders will be keeping an eye on the Black Sea drama and another on the next 10-15 days of weather which are forecast to be hot and dry. Estimates on the US corn/bean crop will be very hard to pin down until harvest begins. Upcoming dates to watch:
- August WASDE – Aug 11
- Pro Farmer Crop Tour – August 21-24
The USDA released the monthly Cattle on Feed and Bi-Annual Inventory report today at 2:00pm. Cattle on Feed as of July 1: 98.2% vs 97.7% estimate / Placed in June: 102.7% vs 98.4% estimate / Marketed in June: 95% vs 95.1% estimate. Bi-Annual Inventory Report: July 1 U.S. All Cattle/Calves down 2.7% from last year. July 1 U.S. Beef Cows down 2.6% from last year. Calf crop down 1.9% from last year.
Forecast:
Overall, heat and limited rains are forecast for the next 10 days as much of the corn crop is either currently pollinating or will be soon. The weather models are predicting potential record heat in the Southwest US/Western Plains with 100-degree temps possible for many areas of the corn belt.
Economy:
The US Dollar is down 15% since late last year and temporarily traded below 100 this week despite aggressive interest rate hikes. It is at its lowest point since April 2022.
The S&P 500 is up about 18% so far in 2023. This is largely due to just SEVEN companies being up +58%. The other 493 companies are combined to be up just 4%.
The seven companies doing the heavy lifting:
META +141
AMZN +50%
APPL +25%
MSFT +45%
GOOGL +34%
TSLA +142%
NVDA +216%
Carvana is up 900% YTD.
This phenomenon is causing stress for large investment funds as they struggle to keep pace with indices and face strict regulatory limits that determine whether a fund can be categorized as “diversified”. Mutual funds that register with the SEC as “diversified” cannot put more than 25% of their assets into large holdings. A large holding is defined as a stock that represented more than 5% of the fund’s portfolio at the time of investment.
Something that probably means nothing:
Per Bloomberg, by 2030, the age of people over 65 will outnumber those under 18 in the US.
Quote of the Week:
“It isn’t the heat, it’s the humidity.” – Yogi Berra