The world is still crazy: Mexico announced its intention to immediately ban U.S. GMO corn, rather than wait until 2024, but then Mexico purchased U.S. corn (yes, the GMO variety) one day later. Then, over the weekend, Barron’s made a positive investment case for garbage and recycling companies. They cited the stocks as “recession proof.” This comes as recession fears are fading!
Back to this week’s executive briefing, we are watching a slew of items that entail the consumer, the PCE inflation report, and fourth quarter U.S. GDP figures. Also, Friday marks the one-year anniversary of the war in Ukraine. Our numbers of interest include data on average cargo rates (down 85% vs. last year’s peak) and federal deficits, among other interesting items.
7 Things On the Watchlist This Week
- Black Seas Conflict: Friday the 24th marks one year since Russia invaded Ukraine. Will there be an escalation in attacks?
- Cotton Acres: Growers expect to plant 11.4m acres this year, a -17% y/y decline driven by lower planting in Texas. Will acres shift to corn, soybeans or wheat?
- USDA: Hosts its annual outlook forum (focus on farm labor and also releases its Food Price Outlook (2/23) and Cattle on Feed (2/24) reports.
- The Fed: Releases minutes (2/22) from its latest FOMC meeting. We are watching for commentary signally the split between hawks and ultra hawks.
- Consumer Data: Numerous catalysts / update: The CAGNY Conference (NY), earnings from Home De-pot and Walmart, Burger King analyst day
- GDP: BEA releases is “second” estimate of 4Q22 GDP; expectations = 2.5%, down from the initial indication of +2.9%
- PCE Report: The Fed’s preferred gauge of inflation comes out 2/24, expectations = 4.3%.
Economic Numbers of Interest
- 6.4%: Last week’s CPI print for January, down from 6.5% in December and vs. 9.1% peak in June 2022
- $986 Billion: Current level of U.S. credit card balances, up $61 billion during 4Q 2022; previous high $927 billion in 2019.
- 362,000: Number of vehicles with Full Self Driving capability that Tesla is recalling/repairing due to reg-ulator safety concerns.
- 35 million and 5%: U.S. households dispose of 35+ million tons of plastic annually, yet only an estimat-ed 5% is recycled (Source; Barron’s)
- $3.41: National average price of gas per gallon, down from the peak of $5.02 in June 2022.
- $50 Trillion: The expected Federal Deficit 10 years from now according to Congressional Budget Office figures ($31 trillion today), due to higher veteran’s healthcare, social security / retirement benefits, more military spending and higher interest rates
- $1,444: The current cost of shipping a 40-foot container from China to California, down 85% from the March 2022 peak.
Agriculture Numbers of Interest
- $304 Million: Dollar value of U.S. pet food exports to China for the first 11 months of 2022, a 197% in-crease year/year.
- -50%: Decline in Belarusian potash shipments in recent months according to Nutrien)
- + 34%: Deere’s sales growth for 1Q 2023
- $196 billion: U.S. exported $196 billion worth of agricultural commodities in 2022 (a record), up 11% yr./yr.
- 11%: Adjusted EBITDA margin reported by Nutrien last week
- $1.5 Trillion: Estimated cost of 2023 farm bill per the latest Congressional Budget Office (CBO) forecast.
- $2 Billion+: Amount of U.S. Ag trade deficit in 2022, despite AG exports hitting a record
- 74%: The percentage of abandoned Texas upland cotton acres in 2022 because of mega droughts impacting soil.
Connect with Ken on LinkedIn for the full report
Kenneth Scott Zuckerberg is Lead Industry Analyst, Grains, Farm Supply & Biofuels, CoBank.
