Category: Morning Summary

Final Corn Yields from the 2015 Thomson Reuters US Crop Tour

Corey Cherr, head of Lanworth, presents the data and the full analysis to tour participants in Chicago, at the conclusion of the final day of the Thomson Reuters US Crop Tour 2015. The presentation is available HERE (registration required). We compiled their results for all six states, which you can see on the map below.

This article is only an excerpt of the 8/12/15 Van Trump Report. Sign up for a free trial by clicking here.

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August-October Most Dangerous Part Of Hurricane Season

If you didn’t know, the 2015 hurricane season has begun and it’s off to a record start. Through July 13, there’s already been 11 named storms in the eastern Pacific, central Pacific and Atlantic basins combined this season. Perhaps the most stunning is the three named storms that formed in the central Pacific basin this July. If you remember, Tropical Storm Bill was the most significant causing flooding in the southern Plains, Ozarks and Ohio Valley. The all-time record for the number of named storms to form in any full season in the central Pacific basin is four, which happened in 1982 during the developing phase of what would become a strong El Nino. As we enter the peak season for hurricanes we need to pay attention as 93% of major hurricanes occur from August through October. Click the image below to see the full infographic.

This article is only an excerpt of the 7/31/15 Van Trump Report. Sign up for a free trial by clicking here.

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Why Are Commodities Under Such Heavy Pressure?

I heard some good comments from Goldman’s Jeff Currie yesterday regarding the current commodity headwinds and “negative feedback loop” that’s occurring. He boiled it down to the three D’s of macro which I have listed below…

  • Deflationary Commodity Prices – This is caused by the excess capacity and production that was created during the decade long commodity bull run. In simple terms a response by producers to meet demand and capture higher prices.
  • Divergence in Currency & Monetary Policy – The Fed diverging from the rest of the world banks for the first time in a decade is creating major uncertainty and wakes in the currency markets.
  • Deleveraging of Debt in the Emerging Markets – During the commodity bull run many emerging markets such as China have amassed huge macro imbalances and massive debt burdens, now that decade long trend is becoming more apparent and glaring the markets are re-pricing the associated risk. Similar to the U.S. housing market bust, as long as the U.S. home builder was able to keep building more homes nobody seemed to care or notice the debt burden they were amassing. Once the music stopped and the new homes were no longer selling it became very clear and apparent that most U.S. home builders had amassed too much debt as they expanded production.

This article is only an excerpt of the 7/30/15 Van Trump Report. Sign up for a free trial by clicking here.

Will Maxed Out Cushing Storage Push Crude Prices Even Lower?

There was a lot of talk this past Spring that as a nation we might max out our strategic storage capacity for crude oil Cushing, OK. That didn’t actually happen because we began seeing strong demand from the refiners. Now all of a sudden we are starting to see more headlines suggesting that Cushing could fill-up and overflow this fall. From what Reuters reported, Cushing stocks are an estimated 39 million barrels higher than last year, actually the highest year-over-year on record. The way I understand it, we never had the big drawdown in oil supply that many had projected this summer, production has remained near record levels and we are heading into a period of time where refiners like to traditionally shut down for maintenance. The EIA reported yesterday that weekly gasoline demand was 9.399 million barrels, down from 9.749 million the prior week. Keep ​in mind demand is still running about 4% higher than last year, but it’s looking as if we might have peaked. Energy insiders are worried that when Cushing, OK maxes out storage, which might be sooner than most think, excess crude oil will be forced into the marketplace at discounted prices. From what I’ve heard that’s why many spec players have been bear-spreading in anticipation of the nearby upfront glut of supply. Below is a graphic that shows high crude oil inventories have pushed since 2005.

This article is only an excerpt of the 7/30/15 Van Trump Report. Sign up for a free trial by clicking here.

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