USDA on resurvey

USDA NASS to Collect Updated Information on Planted Acreage

Issued June 28, 2019 by the Agricultural Statistics Board of the U.S. Department of Agriculture’s, National Agricultural Statistics Service. For more information, contact Lance Honig at (202) 720-2127 or Lance.Honig@usda.gov.

In July, USDA’s National Agricultural Statistics Service (NASS) will collect updated information on 2019 acres planted to corn, cotton, sorghum, and soybeans in 14 states. NASS previously collected planted acreage information during the first two weeks of June, with the results published in the June 28 Acreage report. Excessive rainfall had prevented planting at the time of the survey, leaving a portion of acres still to be planted for corn in Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, New York, North Dakota, Ohio, South Dakota, and Wisconsin; cotton in Arkansas; sorghum in Kansas; and soybeans in Arkansas, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, New York, North Dakota, Ohio, South Dakota, and Wisconsin. If the newly collected data justify any changes, NASS will publish updated acreage estimates in the Crop Production report to be released at noon ET on Monday, Aug. 12. It will be available online at www.nass.usda.gov/Publications.

Morning 6-28

Waiting game Continues today as Focus on trump-Xi meeting continues, Huawei is main sticking point. Month End quarter End Activity may provide a bit of Excitement due to order flows, U.S. Economic calendar shows PCE  and Chicago PMI

 Bond complex trading lower, Stocks little changed as markets expect very little in the way of resolution of trade conflict but also believe escalation unlikely to occur. Shake hands, smile, and kick can down the road appears to be the situation market is pricing. Quarterly Crop report is a big deal for grain complex today; the data is released at 11:00. OPEC meeting July 1-2 will keep oil sideways today as will meetings between putting and Saudi Arabia, always a possibility that production gets cut further as OPEC would like to see higher prices. A  21% chance  for 50 Bps cut at July fed meeting, regardless of what Fed bank   presidents are saying markets  ignoring them for now. Gold headed for best monthly gain since 2016(BBG) and All 18 U.S. Lenders passed latest stress tests thus allowing them to boost payouts, buybacks and Dividends, financials higher pre market. Nike missed estimates for first time in 7 years but said not feeling impact from trade war

BOSTON, June 28 (IFR) – More concern over China’s Huawei demands in restarting trade talks, is creeping into the pricing of treasuries and the yield curve, and that means more steepener flows. And this despite outright longs and steepeners positioning even more one sided with this week’s $113 bn in supply of 2s, 5s, and 7s.

Thus it is not surprising to see a big block flow coursing through the futures pits, and well before the regular futures open where investors and traders find enhanced liquidity. A real money manager bought 11,300 TYs (7s), while selling 2833 ultra bond futures (30s). The 7s/30s spread steepened to 65.3 bps from prevailing 64.4 bps prior to the big block trade.

S.F. Daly Comments

San Francisco Fed president Daly,Non voter and Neutral on Hawk/ Dove scale doesn’t sound like she is in a hurry to cut rates.She Spoke yesterday and now interviewed on BBG TV I wonder if she wanted to say something today that she forget to mention or failed to mention yesterday.Just something to take note of

Alerts History

  • 27-Jun-2019 12:35:39 PM – FED’S DALY SAYS TOO EARLY TO KNOW WHETHER SHOULD CUT RATES, OR BY HOW MUCH, IN JULY
  • 27-Jun-2019 12:37:09 PM – FED’S DALY SAYS SEES INDICATIONS INFLATION EXPECTATIONS ARE SHOWING SIGNS OF GETTING UNTETHERED – BBG TV INTERVIEW
  • 27-Jun-2019 12:38:13 PM – FED’S DALY SAYS BALANCE SHEET TRIMMING HAS BEEN WELL-TELEGRAPHE
  • 27-Jun-2019 12:38:57 PM – FED’S DALY SAYS DOES NOT SEE JANUARY’S COMMITMENT TO PATIENCE AS A POLICY PIVOT
  • 27-Jun-2019 12:39:21 PM – FED’S DALY SAYS SHE DOES NOT BELIEVE FED IS TAKING POLICY SIGNALS FROM FINANCIAL MARKETS
  • 27-Jun-2019 12:40:22 PM – FED’S DALY SAYS SHE IS LETTING ECONOMIC DATA INFORM HER DECISION ON RATES IN JULY
  • 27-Jun-2019 12:41:17 PM – FED’S DALY SAYS SHE HAS NOT SEEN TRADE TARIFFS SLOW ECONOMY YET, BUT UNCERTAINTY IS HOLDING IT BACK
  • 27-Jun-2019 12:43:17 PM – FED’S DALY SAYS FED POLICYMAKERS DEBATE POLICY AS EQUALS, IT’S A DEMOCRACY OF IDEAS
  • 27-Jun-2019 12:43:53 PM – FED’S DALY SAYS FED IS NOT AS DIVERSE AS SHE WOULD LIKE IT TO BE

Corn Demand Destruction?

Great graph From DC analysis showing different Shipping prices for Worldwide corn exporters,the U.S .crop just a bit high vs competitors. We can have all sorts of weather problems causing all sort of issues but if prices are too high demand will be hit

Morning 6-27

He said, she said Event driving flows this morning

  • From South China Morning post at 3:30 Ish , US and China agree  to tentative    truce before G20 summit  
  • Then around 4:45 this morning    Chinese Diplomat says    NOT AWARE OF SCMP REPORT ABOUT A TENTATIVE TRADE DEAL: BBG
  • China is insisting that ban on tech sales to Huawei be lifted before any deal is signed    …Not good for negotiations I believe  
  • G-20 leaders arriving in Osaka as I type, Plenty of tape bomb material  Is possible over the next few days    as world leaders meet face to face           
  • For the second time in a little over a week Goldman lowered end of year forecast for US 10 year yields   ,they predict 1.75%,joins peer JP Morgan    
  •  Open interest — a measure of a market’s liquidity — in the Eurostoxx futures index hit record highs on a monthly basis of 4.61 million lots on Monday
  • German CPI in line with expectations
  • GERMANY AND FRANCE, OTHER ALLIES, TOLD U.S. DEFENSE CHIEF ESPER THAT 2015 NUCLEAR PACT ON IRAN MUST BE UPHELD, SHOULD NOT BE JEOPARDIZED-Reuters
  • President Donald Trump will have breakfast with Saudi Arabia’s Crown Prince Mohammad Bin Salman before a high-stakes meeting with Chinese President Xi Jinping on Saturday, White House spokesperson Hogan Gidley said.
  • Negative comments Regarding Boeing sees stock 2%
  • Per Bloomberg Junk bonds have already returned more this year than last 2 years Combined,searc for yield knows no bounds

 Bonds higher stocks higher, Bund little changed Dollar sideways as markets await Trade deal talks and  on the lookout for Tape bombs related to  trade and Iran. Stocks in Japan, China, and Hong Kong closed higher, Dax up a touch. Gold pulling back from multiyear gains trading back towards $1400  And Bitcoin futures -13%.US economic calendar doesn’t offer much excitement, and a 7 year auction at noon. Oil down a bit as it  has plenty of future event risk from trade talks, Iran and OPEC meeting  next Monday Tuesday.Copepr little changed stuck in a tight range. Month end quarter end tomorrow.

Tale of the Tapes

Major Averages rolling over a bit,the biggest decliners are the interest rate sensitive Sectors
Feeder cattle limit Bid in front Month August as selling may finally have dried up.I don’t think I ‘m too excited to hold longs overnight,but don’t listen to me I just advise the traders,they make decisions.

Term premium

Not to go down the rabbit hole too much but below find graph of term premium of treasuries maturing between 1-10 years via Bloomberg. More to it I know but one can think of Lower term premium as a risk on indicator as long dated rate expectations drop.A weekly chart below show levels at lowest price in a few years.

here is same metric on a daily chart over last 6 months.Notice the big drop in premium as markets priced fed rate cuts.

A bonus Chart below , Average German bond yield of all maturities on a weekly time frame,Not a big surprise but to see it visually drives home the point a bit more ..