Comment of the Day
19th June 2023
Eoin Treacy
Jun 20
Video commentary for June 19th 2023
A link to today's video commentary is posted in the Subscriber's Area.
Drought risk keeps US soybeans, corn farmers jittery amid supply cut possibilities
This article from S&P may be of interest. Here is a section:
The three-month outlook hints toward an extended period of warm and dry weather across major parts of the Midwest, the US Climate Prediction Center said June 15.
June to August is usually a critical development period for corn and soybeans crops in the US, market analysts said. So, while June was relatively dry, the Midwest will need sufficient rainfall in the upcoming months for crop development.
The current situation across major soybean and corn producing states does not look promising.
According to the US Drought Monitor report released June 15, about 49% of Iowa was suffering from drought in the week ended June 17, while 65% of Illinois and 75% of Nebraska were also under drought conditions.
Commodity analysts see sharp cuts in output potential for both corn and soybeans if the dryness persists in the upper Midwest and eastern Corn Belt, and to some extent in the southern plains.
Eoin Treacy's view
The torrential rains that resulted in a record snowpack in the Sierra Nevada mountains did not make it over the Rockies. That has resulted in late planting and below par yield expectations. One of the main contributors to falling CPI figures has been the decline in food prices. That’s likely to be prove transitory considering the rebound underway from deep short-term oversold conditions in the grain complex.
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Xi Tells Blinken 'Very Good' That Progress Made on US-China Ties
This article from Bloomberg may be of interest. Here is a section:
Chinese President Xi Jinping told Secretary of State Antony Blinken it was “very good” the two sides had made progress in steadying ties between the world’s two largest economies during his trip to China.
“I hope that through this visit, Mr. Secretary, you will make more positive contributions to stabilizing China-US relations,” Xi told the US diplomat in Beijing on Monday, according to a Chinese Foreign Ministry statement.
“The two sides have also made progress and reached agreements on some specific issues. This is very good,” he said in a video clip of the meeting posted by state broadcaster China Central Television, without elaborating.
Eoin Treacy's view
The exchange of views between US and Chinese diplomats has been described in several outlets as candid. This interview of Rahm Emanuel, former White House chief of staff and current ambassador to Japan, is a good example of just what candid means.
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Rising UK Mortgages, Yields Pinch Homeowners and Sunak Alike
This article from Bloomberg may be of interest. Here is a section:
The UK housing market is under particular pressure from a triple whammy of pricey borrowing, economic uncertainty and high inflation. While the average two-year fixed-rate home loan surpassed 6%, the five-year fixed-rate deal climbed to 5.67% after breaching 5.5% for the first time since January last week.
Eoin Treacy's view
When my parents bought their first home in the mid-1970s they secured a fixed interest rate for the term of the loan. By the time they sold that house twenty years later, the repayment cost was negligible, and the availability of fixed rate mortgages has evaporated. That was a happy circumstance for my parents, but it was funded by government efforts to support home ownership that were unsustainable. Today prices are high, rates are floating higher, government debt is already problematic and young people are being squeezed. It’s a combustible mix.
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Eoin's personal portfolio: stock market long initiated June 12th
One of the questions subscribers ask most often is how to find details of my open trades. To make it easier I will simply repost the latest summary on a daily basis until there is a change.
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