The Commstock Report

On the Grains For all the “fear” of the economy falling to zero, Apple’s earnings yesterday were reported at $95.4 billion, up 5% year-over-year, beating expectations of $1.62/share and paying out $1.65. Apple also announced it will purchase $100 billion in its stock buyback program.  Chinese sales, shockingly, were down 2.3% year-over-year. If an analyst expected them to gain market share in China, I wonder what they think and if the hamster is still running around? Undoubtedly, the concern is the tariffs and how the 2nd quarter numbers look, some might have been preemptive buying ahead of the tariffs supporting numbers last quarter. In my house, we upgraded one phone, an Apple Watch, and AirPods ahead of the tariffs. I believe all three were in January. Not solely based on tariffs, but it did help make the decision easier. The phone and watch were over five years old, and the AirPods I lost are essential in this business. This content is for members only.Register Already a member? Log in here

What will US consumers think when store shelves empty and retail prices for many goods increase? China appears willing to wait to find out. That is why president Trump has been so antsy to get trade talks started and the Chinese are not. Amazon said that they were considering posting the amount that tariffs added to product prices on their platform which sent president Trump off the deep end blasting the proposed company action as "a hostile political act". That caused Amazon to quickly reconsider as their stock dipped on the threat. His response will not be lost on other companies thinking of doing the same. He wants that cost hike covered up as if it didn't exist so that consumers cannot specifically identify it. That is how he does business. He said that companies as large as Amazon should not be raising prices but, given a tariff rate of 145% on goods coming from China, how much margin does he think that they have? Companies tried to prepare, anticipating a disruption of trade, by stockpiling inventories of key items, but this pause in trade will exhaust inventories. Then the question becomes if and how much and how quickly supply…

Above you will find today's installment of Morning Market Talk. Mayday Mayday You can click on the picture above to take you to this morning's episode. On the Grains Equity markets are rebounding as the market is getting signs that the first deals on tariffs might be close to being done. Potential deals include Japan, South Korea, and India, but Trump is not in a hurry to rush into a deal to get it done. US Trade Representative Greer, said in a statement that the US and China have not had official talks yet is clearly a misdirection by the administration from earlier reports that China had come to the table. At the same time, the equity markets are on a rip higher this morning as Microsoft and Meta are leading the way. Several major companies are set to release earnings today- Microsoft, Meta, Pfizer, and United Parcel Service. Microsoft reported that $9.7 billion in share buybacks and dividends for Q3 maintaining its aggressive shareholder return strategy. Yesterday, 120,000 MT of corn was sold for delivery to an unknown buyer in a flash sale, and today’s export sales report is expected to show 1.0 million MT to 1.25 million MT.…

PLEASE REFER TO THE BROKER COMMENTARY PAGE FOR UPDATES!! My crops got planted the middle of last week. We were scrambling to get them put in ahead of a forecasted rain. We made it just in the nick of time as it started raining on the last two rounds. Soil conditions were about as good as we have seen in the last several years. We have already gotten a couple of inches in April with more forecast for this week. Temperature forecasts continue to remain above average and so it appears any risk of frost is limited. Scattered rainfall of 1" to 1.5" will encompass most of the Corn Belt this week. Texas and Oklahoma received the most with up to 4" in some areas. Nebraska is the one state that has been left out of any significant April showers, showing limited precipitation in the near term. The May outlook shows a slightly drier trend for Iowa and most of the Eastern Corn Belt. Meanwhile Northern regions in the Dakotas and Minnesota should see above average rain along with the Southern Plains. For the time being, corn areas affected by drought are receding to the Western Corn Belt. It may not come…

On the Grains Risk off was the theme that dominated the trade yesterday, as the Brazilian state of Parana’s Department of Rural Economics reported corn conditions at 63% good to excellent. Currently, there is a limited risk of developing a crop problem in the Brazilian crop. That’s not to say that something couldn’t arise in the future, but it’s looking good so far.  This content is for members only.Register Already a member? Log in here

Footnotes on Pope Francis: While Lutheran, I have long admired Pope Francis as personifying what a Christian should be. I set him out as being the most Christian Pope, living and preaching the gospel in humility, in my lifetime. That pitched him into contrast and conflict with some of the strongest cultural and political movements today. All Pope Francis did was point out how Jesus said to treat strangers and children and that was contrary to what many politicians were selling voters or voters were demanding of politicians. That is why the public uproar against a caravan of children crossing our southern border a few years ago forced me to comment on the hypocrisy. My wife and I visited the Vatican and gazed at Michelangelo's Sistine chapel ceiling. While most impressive, we also came away with an aversion to the overall ostentatiousness of the place. The irony and our connection to Pope Francis was that we shared that perception which is why he chose not to live there. I am not convinced that had Martin Luther known Pope Francis that there would be Lutherans today. I recommend the movie "Conclave" for an idea of what comes next.   Footnotes on…

On the Grains Today will be a crucial day for the equity markets and could spill into the agricultural pits in Chicago. Visa, Coca-Cola, Starbucks, UPS, and Pfizer are set to announce quarterly earnings today. Traders appear confident in what they will see. Overnight, the DOW was up 100 points while the NASDAQ was down 41 points. Gold is taking a break this morning as well, down $24/oz. The Consumer Confidence Report will be released today at 9 am Central Time and will likely impact the livestock markets, more on that below.   This content is for members only.Register Already a member? Log in here

Instead of having one crop planted in April and another one in June like last year, both our corn/soybeans got planted together early for a change. We had gotten some moisture recharge at the beginning of spring along with a couple inches of April showers out of recent rains to get the crops off to a good start. This should get us some way down the road toward pollination. Royal Iowa has had year to date precip of 4.6 inches compared to an average 6.1. The long-range forecasts suggest that summer will be drier and warmer than usual, at least for the western half of the corn-belt and plains. Analog comparative years appear to back that up. Early planting is one defense against summer drought. The forecast looks to be drying out ahead with warming temps in May that should give farmers an open planting window for a change. While our local rainfall totals were on the low side, much of the corn-belt did get a recharge from recent rain systems. The location of the Bermuda high is facilitating the air flow from the gulf being open and a lot of moisture has been flowing up into portions of the…

On the Grains: Ricky Bobby, while a fictional character in the movie Talladega Nights, made a reference during the Talladega 500, “buckle up, this could get bumpy” which is exactly what the weather forecast is for much of the upper Midwest in the next 48 hours, likely throwing the anchor on planting progress for the next couple of days. East of the Mississippi, while too early to call a 2019 repeat, is starting to be concerning and would change the risk appetite of the funds drastically. Friday’s Commitment of Traders report had the funds sellers of 11,768 contracts leaving them 112,805 long. This content is for members only.Register Already a member? Log in here