On the Watchlist this week:
- Black Seas Grain Deal Earlier this morning, the New York Times reported that Russia has pulled out of the deal. Stay tuned.
- Norway’s Phosphate Discovery Norge Mining now estimates that its phosphate rock reserve discovery is an estimated 70 billion tons; almost doubling the known global reserves of 71 billion tons (approximately 70% is in Morocco). The company estimates this can support 50 years of global phosphate fertilizer production. Mining permits are in place.
- Teamster Union Strike Deadline August 1 is the deadline to avoid a strike by 340,000 Teamsters union members employed by UPS. A strike would affect not only retail deliveries but also intermediate supply chain shipments COVID-style. FedEx and the US Postal Service are planning for a potential shift in shipping should the strike occur, with FedEx assuring priority to current customers
- China Economy and Trade China’s total exports in June dropped 12.4% - the biggest since February 2020 at the outset of COVID. Moreover, imports into China dropped in June by 6.8%, and for the fourth consecutive month. As two-way trade is a measure of economic activity, these are warning signs about the Chinese economy.
- Cattle on Feed The July 1 Cattle on Feed report will be released on Friday July 21, which will show placements of cattle in feed yards over the month of June. Placements in May surprised the market above expectations. Extreme heat and regional rains make the prediction of June placements difficult leading to a wide range of predictions this week and potentially another surprise.
A Closer Look at Inflation Trends
U.S. inflation (the reported all-in figure) continued its downward trend during June, falling to the lowest level in over two years to more than two years,
Falling CPI items included: Eggs (-7.9%), Major Appliances (-10.7%) and Unleaded Gasoline (-27.1%),
Rising CPI items included: car insurance (+16.9%), primary residence rent (+8.3%) and spirits at bars and restaurants (+7.9%).
CPI items that are seeing a slowdown in the rate of increase: haircuts (+5.0%), apparel (+3.1%) and college tuition (+2.0%).
Source: Bureau of Labor, Statista, The Wall Street Journal, and CoBank.
Upcoming Events & Catalysts
July 17 Empire State manufacturing survey, Crop Progress, expiration of Black Seas Grain Initiative
July 18 Retail Sales, Industrial Production, Homebuilder Confidence
July 19 Housing Starts
July 20 Initial Jobless Claims, USDA Weekly Exports, U.S. Bioenergy Statistics
July 21 USDA Cattle on Feed
July 25-26 Tech Hub Live (Des Moines, Iowa)
July 25 Archer Daniels Midland earnings report
July 26 FOMC Rate Decision, LSB Industries earnings report
July 27 2Q GDP (first look)
July 28 Earnings: AGCO, CNH Industrial
Week of Aug 1 Earnings: Andersons, Bunge, CF Industries, Corteva, FMC, Green Plains Energy, Mosaic, Nutrien, Mosaic, Scott Miracle Gro, Trimble
Week of Aug 8 Earnings: AMVAC, Darling Ingredients, Israel Chemical
Numbers of Interest
114 degrees The high temperature in Phoenix this weekend, marking the 17th day of temperature above the 110 degree mark thus far in 2023.
17.3% YTD price performance of the S&P 500
160,000 The number of TV and movie actors represented by the SAG-AFTRA Union which are presumably now on strike.
54% Market share of electric vehicles (EVs) sold in China during 1H 2023 up from 48% in 2022.
100 million Number of users now using Facebook/META’s Threads platform, the Twitter alternative.
$1 billion Estimated gross revenues from Taylor Swift’s ongoing 2023 concert tour
Kenneth Scott Zuckerberg is Lead Industry Analyst, Farm Supply & Biofuels, CoBank.
