On this week’s Ag Analyst’s Watchlist:
- U.S. Debt Ceiling: Republican negotiators abruptly walked out of talks with White House negotiators on Friday, however, President Joe Biden is expected to meet with Republican House Speaker Kevin McCarthy today to pick up where negotiations ended last week. Could a deal be announced today?
- Global Warming: In April, sea surface and air temperatures were 1.55 to 1.80 degrees above long-term averages according to NOAA, whose officials estimate that 2023 has a 93% change of ranking as one of the top five warmest years on record. Will this we realized?
- Increased Snacking: Recent WSJ article by Jesse Newman and Jaewon Kang indicated over the past two years, more than 50% of U.S. consumers are eating three or more snacks per day up from 8%. The top selling snacks are salty (potato and tortilla chips) rather than sweet.
- Onshoring: Schneider Electric (of France) is opening factories in El Paso, TX and Monterrey, Mexico that will produce circuit breakers and electric panels , adding to 35 existing North American factories and distribution centers. Will we see more onshoring announcements during 2023?
Numbers of Interest
53% Deere reported that sales jumped 30% for fiscal 2Q to $17.4 billion, sales of large farm equipment grew by even more, staggering 53%!
20% China reported that youth unemployment rose about 20% for the first time since the nation began tracking the data in 2018. China’s economic recovery remains suspect.
-7% The latest quarterly 12-month rate of return reported for venture capital funds (WSJ.)
4.57% Level of consumers’ credit-card debt that is 90-plus days delinquent in 1Q 2023, compared to 3.04% in 1Q 2022 (WSJ). The age group seeing the largest amount of negative debt transition was 19-29 years of age
$773 billion Nvidia’s current market capitalization after gaining 46% over the past three months, which now exceeds Berkshire Hathaway’s $735 billion value
752 billion Miles driven by Americans YTD through March 31, 2023, almost identical to the record of 753 billion in 2019 (Barron’s)
Last Week’s Headlines of Interest
- The Black Seas Grain Initiative been extended for two months
- China canceled 339k MT of corn (the trend continues) and 119k MT of soybeans; and there were rumors of Brazil corn flowing into Mexico.
- Truterra (division of Land O’Lakes) announced it paid over $5.1 million to farmers during 2022 to store carbon
- USDA’s Rural Utilities Service is offering $10.7 billion in loans and grants to help rural energy providers reduce greenhouse gas emissions.
- U.S. retail sales rose 0.4% in April, less than expected but still positive. Core retail sales rose 0.7%; March revised slightly lower
- Kansas Wheat Tour: The Wheat Quality Council predicted an average of 30 bushels per acre with production this year for winter wheat at 178 million bushels, the first time since 1963 total production in Kansas could be under 200 million and the lowest yield since 2000. Abandonment of acres is an issue not just for grain but also for seed.
Despite reporting strong results, John Deere’s chart is telegraphing a negative message for agriculture
The Week Ahead & Upcoming Events
May 22
Biden / McCarthy meeting on debt ceiling. Fed speeches (Bullard, Bostic, Barkin); JPMorgan investor day; Grain export inspections, Crop Progress
May 23
Fed Logan speech, Redbook, S&P Global Manufacturing, PMI, Richmond Fed Manufacturing, Building Permits; Lowes earnings report
May 23 to 24
Kansas City Federal Reserve 2023 Agricultural Symposium: The Changing Geography of Agricultural Production
May 24
Mortgage Applications, EIA data, PPI, FOMC Minutes
May 25
Q1 GDP (2nd est), Core PCE, Jobless Claims, Corp Profits, KC Fed Manufacturing, Chi Fed National Activity, Pending Home Sales, Fed Collins speech; Zoetis investor day
May 26
Personal Income/Spending, Durable Good Orders, Retail Inventories, UM Inflation Expectations, Baker Hughes Rig Count
June 27 to 28
The InfoAg Conference. St. Louis, MO.
Kenneth Scott Zuckerberg is Lead Industry Analyst, Farm Supply & Biofuels, CoBank.
