5.17.24 Tredas Recap
Weekly Action:
KC Wheat July24 down 10 at $6.61
Corn July24 down 15 at $4.53
Beans July24 up 8 at $12.27
Hogs June24 down 1.55 at $100.125
Fats June24 up 4.70 at $180.90
Feeders Aug24 up 8.325 at $259.525
Corn Dec24 down 13 at $4.77
Beans Nov24 down 3 at $12.02
Corn seasonal average (70% through): $4.71
Soybean seasonal average (30% through): $11.84
Market Recap:
As of last Sunday, corn planting was 49% vs 54% average and 60% last year. Iowa, Nebraska, and Illinois are states among those most behind their averages.
Soybean planting was 35% done compared to 35% average and 45% last year.
The Wheat Quality Council projects the Kansas wheat crop yield 46.5 bpa compared to USDA’s estimate of 38.0 bpa and the 5-year average for Kansas is 44.2 bpa. The overall crop production estimate of 290 million bushels is higher than the May WASDE estimate of 267 million bushels. The tour does expect a large amount of abandoned acres, though. If the USDA’s expected harvest acreage comes to fruition, Kansas’s production could be well over 300 million bushels. The tour noted large variability between different areas of the state. This week’s crop progress report has all winter wheat rated 50% good/excellent compared to just 29% g/e last year. Kansas’s crop is rated just 31% good/excellent but is dramatically better than last year’s 10% g/e rating. Nebraska’s crop is rated 79% good/excellent compared to 17% last year.
The Buenos Ares Grains Exchange expects the Argentine soybean crop to be 50.5 MMT which is in line with USDA’s 50.0 target. If realized, this would double their output from last year (25 MMT). This represents approximately 1 billion additional bushels being produced in Argentina year over year. They estimate their corn crop to be 46.5 MMT which is a significant decrease from USDA’s 53.0 projection. It would be a about a 350 million bushel increase from last year’s crop. Argentine soybean harvest is 61% complete vs 76% average and corn is 33% complete vs 42% average.
Ukraine corn planting is 92% complete. Planted acreage is expected to be down 4.5% from last year.
Friday’s Commitment of Traders showed more managed money buying. Below is the net change in position over the last four weeks. The funds have bought over 200,000 corn contracts during this time. In 2019, they had flipped their corn position by over 300,000 contracts from Spring to mid-June.
Weather:
Additional spring showers are forecast for most of the Central corn belt. Rains are not expected to hit Southwest Kansas, or the OK/TX Panhandles, which could be a developing story in the wheat market and new crop corn market in terms of Western corn belt basis values.
Economy:
The DOW crossed above 40,000 points for the first time in its 128-year history this week. The crazy thing about this: it took from 1896 to 1972 for the index to get to 1,000 points (76 years). Below is the date of each 1,000-point hurdle over the years. The S&P 500 also reached a new all-time high this week. This is the 23rd time it has made new all-time highs just this year. Since the FED began raising interest rates (+525 bps since March 2022), the S&P has rallied 22%.
Starbucks revenue fell 2% last year. Since its IPO in 1992, the only periods with larger revenue declines were 2008-09 and 2020.
A sign inflation is still a problem, the Personal Savings Rate in the US has moved to 3.2%. The average rate over the last 30 years is 5.8%.
Red Lobster is closing nearly 50 restaurants and is preparing for bankruptcy protection as the restaurant incurred large losses from an “all you can eat shrimp” promotion causing a $11 million loss in the third quarter last year.
Something That Probably Means Nothing:
A jiffy is an actual unit of time. It is 1/100th of a second.
Quote of the Week:
“In the spring, I have counted 136 different kinds of weather inside 24 hours.” – Mark Twain
Enjoy your weekend!
