The Van Trump Report

" The takers may end up with more, but the givers will sleep better at night." - Unknown

THURSDAY, JUNE 25, 2015
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Morning Summary: EU finance ministers are meeting in Brussels again to continue negotiations regarding a bailout deal for Greece. From what I understand, the most recent proposals that Greek leaders presented were rejected yesterday by international creditors. Also in the global headlines is news coming out of Iran that their leaders rejected a 10-year restriction on nuclear research and said the country would NOT sign a final nuclear deal unless economic sanctions were lifted first. Here at home Wall Street traders seem to be talking more openly about "profit taking". Some of the bigger players are becoming a bit more fearful that the public investor is starting to be lured into the markets with talks of major stock-splits, big gains among the higher flyers, and more enticing IPO's. From the technical side of the equation a range between 2,060 and 2,075 seems to be heavy nearby support in the S&P 500, while nearby resistance seems to remain up around 2,125. There isn’t much on the economic calendar as we move into the last part of the week. The Commerce Department releases Personal Income and Outlays today, where analysts will be looking for the “illusive” increase in consumer spending that was expected to be generated by lower gas prices. Consensus is for a gain of +0.7%, though that’s seen coming mostly from vehicle sales. The core rate, which excludes vehicles, building materials and gas, is seen rising just +0.1% with consumers continuing their trend of saving more rather than shopping more. The Kansas City Fed Manufacturing Index is also out today, which was a shocking disappointment last month at -13. Lets also not forget the the Supreme Court has some big issues hanging in the balance and awaiting rulings over the next week, as the court needs to complete and finalize action for this term. Look for rulings over the next few days on: Same Sex Marriage; Obama's Health Care Law; Clean Air; Capital Punishment; Fair Elections; and Racial Discrimination.

Crude Inventories Slide But Gasoline Still Climbing: The EIA yesterday showed U.S. crude oil stockpiles pulled back a bit, while gasoline stocks unexpectedly climbed a bit higher. Specifically crude oil stocks fell by 4.9 million barrels for the week ending June 19th. this comes on top of the 2.7 million barrels pullback during the previous week. Data shows we still have close to 463 million barrels which are still near record highs for this time of year. Gasoline supplies rose by 700,000 barrels.

China Proposes Removing Banks’ Loan-To-Deposit Ratio: China’s State Council has approved a draft to amend the country’s banking laws. They propose removing banks’ loan-to-deposit ratios, which capss lending to a maximum of 75% of their deposits. The central bank has used the loan-to-deposit ratio as one tool to contain risks of a loan spree, but say it is no longer effective. It’s estimated that removal of the lending cap could lead to more than $1 trillion in additional lending. The proposal now moves to China’s parliament where no timeframe has been given on how long the final approval process may take.

Carl Icahn Just Made $993 Million On Netflix: Legendary investor Carl Icahn decided it was time to exit the remainder of his Netflix holdings yesterday, which he revealed earned him a profit of $993 million. He became one of the companies biggest shareholders back in 2012 when the stock was trading at just $58. He sold about half of those shares a year later when the stock hit $341 and has been unloading shares here and there ever since. When he sold his remaining 2.3% stake yesterday, the stock was trading nearly 1000% higher than where he purchased it three years ago. Incidentally, after announcing his extremely profitable trade, he sent a string of tweets saying he believed the market was “extremely overheated.” More specifically, he is worried about a bubble in high-yield bonds. Later on CNBC he explained that “high-yield bonds have few covenants to protect investors now. Investors don’t understand those risks.”

How Americans Spend Their Time: The Bureau of Labor Statistics just released their “American Time Use Survey”, which Business Insider used to create the handy chart below. Around 11,000 Americans participated in the survey, which is based on activity for just one day. Many activities typically are not done on a daily basis, and some activities only are done by a subset of the population. For example, only 42 percent of all persons age 15 years and over worked on an average day in 2014 because some were not employed and those who were employed did not work every day, accounting for weekends and holidays. That explains how an average of just 3.59 hours are spent working. By far, sleeping consumes the biggest part of the day, averaging 8.8 hours. The full report provides much greater detail and is available HERE

Weather across the Plains saw showers scattered in northern areas and parts of Montana, North Dakota, Nebraska and Kansas. These conditions should continue to be favorable for develop summer crops in this region. In the Corn Belt, pockets of rain fell yesterday in the southern and eastern parts of the Belt. In the South, scattered rain and thunderstorms provided some much need relief from their hot and dry conditions they have been experiencing as of late. rain will increase through Friday in the Midwest with the heaviest amounts hitting the more northern trail touching parts of Iowa, Illinois, Indiana and Ohio. Of course, this will add more rain and more concern to parts of the Mississippi and Illinois rivers that are nearing flood stages. Next week, rains will move through at mid-week and heavy rains at the end of the week leaving little chance for late soybean seeding in Missouri. Monsoon related showers will begin to develop in parts of the Southwest, particularly in the southern rockies. In contrast, hot and dry weather will persist in the West. Weekend temperatures could approach 110 degrees F as far north as the interior Northwest, while cooler air will arrive across the eastern half of the US. Wheat harvest is expected to continue to be slow throughout the central Plains as a wetter pattern is expected to set up in early July.

Late-Summer Temperature Forecast Expected Below Average for Midwest: The next three months are expected to feature relatively cool condition in the central states while the West endures more above-average warmth. The worst of summer’s heat is expected to stay to in the Western half of the country. The cool down in the eastern/central US appears to be on track for July and will be driven by southward dips in the jet stream across the central and eastern states. This could make for a difficult growing season for corn if we don’t see the proper amount of warm days and nights.

USDA Weekly Export Sales were released this morning. Corn and wheat sales were basically in line with most expectations, while new-crop soybean sales were a bit of a disappointment. Below are the details:

  • Corn sales were reported at 496,800 Tons for 14-15; 297,500 for 15-16. The trade was looking for a number between 500,000 and 700,000 metric tons for 2014-15 and between 100,000 and 200,000 for 2015-16. Last week sales reported at 627,200 Tons for 14-15; 200,400 for 15-16.
  • Soybeans sales were reported at 118,800 Tons for 14-15; 202,500 Tons for 15-16. The trade was looking for a number between 100,000 and 200,000 tons for 14-15 and between 250,000 and 500,000 for 2015-16. Last week sales reported at 132,900 Tons for 14-15; 532,000 Tons for 15-16.
  • Wheat sales were reported at 434,300 for 15-16 (which started June 1st). The trade was looking for a number between 200,000 and 450,000 for 2015-16. Last week sales reported at 315,700 for 15-16.

Corn bulls are talking about how "extreme weather" here in the U.S. should make trend-line or higher yields an afterthought. The bears on the other hand are thinking we could still see a slight bump in planted corn acres next Tuesday by the USDA. Remember, the upcoming June 30th acreage report by the USDA, probably was not able to pick up on many of the acres that producers have just recently given up on. In other words, when the surveys were actually taken, many folks had hopes for getting their remaining unplanted corn acres in the ground. With the ongoing rainfall and wet forecast that might not now be the case. The bears are also worried about a potential curve-ball being thrown by the USDA regarding total "feed and residual" demand in their Quarterly Stocks report. The bears are also talking about better than expected production out of South America and less than anticipated Chinese demand for U.S. corn. Moral of the story, even though the bears have legitimate arguments the trade seems to have their eyes entirely focused on U.S. weather. Therefor, I suspect as long as the U.S. weather extremes continue and remain in the spotlight, corn prices will stay supported. Just remember, as in any weather market the risk premium added can be removed even quicker.

U.S. Ethanol Production Post New Weekly Record: It was reported that ethanol production last week broke a new record with 994,000 barrels per day of production. Most insiders believe that means we chewed through just over 105 million bushels of corn last week to produce this much ethanol. From what I can gather, we might be just a hair ahead of the amount of corn the USDA is currently projecting we will use for ethanol. As I mentioned the past couple of days, we need to keep our eye on "exports". There's some recent political changes that might limit our ability to export as much U.S. ethanol into Brazil and may actually allow more Brazilian ethanol to enter the U.S..

Soybeans traders seem split between extremely wet U.S. weather and what appears to be much cheaper and plentiful South American supplies. There's also the questions still surrounding growth in Chinese demand. From my perspective meal doesn't appear to have the same muscle it once had. With the strength of meal and heavier technical resistance up above, it's tough to imagine great deal of additional upside momentum ahead of next Tuesday's report. Most inside the trade seem to be thinking the USDA is going to raise their soybean acreage estimate to 85 million plus. We have to remind ourselves the survey was taken a couple of weeks back when most all farmers remained more optimistic about getting their final soybean acres in the ground. There's also the continued talk that we might see the USDA make an adjustment that confirms they may have overestimated last years U.S. production. As a spec you have to look more extreme volatility and swings in the market as the July options expire tomorrow and First Notice Day is next week. As a producer I'm keeping my hedges in place and looking for prices to take 2 or 3 steps forward, followed by 2 or 3 steps back...

Wheat traders continue to monitor the dry conditions in Canada along with the slow pace of harvest and the "quality" issues surrounding the U.S. crop, especially the SRW wheat crop. There is also more talk that the EU soft wheat yield estimates are being pulled back on complications in parts of Germany and France. I wish I could take more of a bullish stance than just viewing the current upward price movement as a short-covering rally, but even with a few more bullish supply side fundamentals in the headlines, there's still nothing bullish on the demand side or the macro side of the equation. Also keep in mind there remains heavy nearby technical resistance on the charts up between $5.40 and $5.50 per bushel. If we can close and keep our head above that level for a few consecutive days, perhaps the trade and particularly the longer-term bears will take a different perspective. Stay patient!

Rally for Rural America at EPA Renewable Fuel Hearing in Kansas City: Rally for Rural America is asking farmers, workers, and small business owners from across the Midwest to join them in standing up for America’s rural communities and clean energy future. Held in conjunction with the EPA’s public hearing on the Renewable Fuel Standard, the Rally for Rural America will provide an additional venue for RFS advocates attending or testifying at the EPA hearing. Full details are available HERE.

  • When: Thursday, June 25, 9 a.m. - EPA Hearing, 11:30 a.m. - Rally For Rural America
  • WHERE: Rally will be held at Huron Park, a five-minute walk from the hearing location​, which is at the Jack Reardon Center, 520 Minnesota Ave., Kansas City, KS.

If you can’t attend, a livestream of the event will be available on Twitter/Periscope HERE.

From The Field

> Ethanol Production Week Ending June 19: Weekly ethanol production averaged 994,000 barrels per day, up +1.43% from last week and up +5.97% compared to last year. Stocks fell to 19.84 million barrels, down -4.24% from last week but up +9.11% compared to last year. Total corn usage was estimated at 104.37 million bushels.

> Commerz Cuts Soybean Price Forecast: Commerzbank downgraded their price forecast for soybean futures, cutting their estimate for the end of 2015 by 50 cents to $9.00 a bushel. Early 2016 prices were forecast at $9.61 per bushel. The bank cites high global stocks from 2014-15 harvests followed by prospects that 2015-16 production will on be “marginally lower.” Commerz is more optimistic about corn, however, seeing demand outstripping production and giving futures a boost. They see prices returning to $4.00 per bushel by the end of 2015. For wheat prices in the October-December period, they forecast $5.50 per bushel. They did note that “very good conditions are needed in key regions” to ensure the world does not fall into a production deficit in 2015-16. (Source: Agrimoney)

> Rabobank Pushes Milk Price Recovery Further Out: In its latest Dairy Quarterly report, Rabobank says a milk price recovery will not come until late 2015, best case scenario. The report says global production is still exceeding demand and the imbalance is unlikely to be substantially corrected in the second-half of 2015. However, they do say the “seeds of an eventual price recovery are now being planted, with producers and consumers finally getting the signal that the world has too much milk and is starting to respond to that.” Rabobank expects prices to enter a recovery phase in late 2015/early 2016.

> Monsanto Delivers Strong Earnings Results: Monsanto reported profits of $1.14 billion for its fiscal third-quarter, up from $858 million a year earlier. Revenue was also up to $4.58 billion from $4.25 billion last year. Included in the results was a $212 million increase in sales in its corn seeds and traits division. During the post-earnings call, Monsanto president Brett Begemann noted that this has no doubt been a tough year as the company grapples with a downturn in farmer spending, lower commodity prices and currency fluctuations. Begemann says he expects many of those headwinds to continue into fiscal 2016. The company kept its full-year guidance for profits between $5.47 and $6.00 per share, forecasting fourth-quarter results would “break even.” To meet that end, they plan cutting costs by $300-$500 million.

> Brazil’s Sugar Mills Opting To Produce Ethanol Over Sweetener: Sugar industry group Utica says Brazil’s center-south region produced 1.97 million metric tons of sugar in the first half of June, -15% below the same period last year. Cane crushing were -5% below last year’s levels at 39.4 million metric tons. Overall, sugar production is running -13% behind last year as mills are choosing to instead produce ethanol.

> CME Delays Pit Closure: The CME Group says it will delay closure of most of its open-outcry futures pits by at least one day due to a “technical revision” in its filing with the CFTC. The final open-outcry session is now expected to be on July 6 rather than July, pending review by the CFTC. The regulatory agency could delay the pits’ closure by up to 90 days.

> WHO Links Dow Herbicide To Cancer: The World Health Organization is going after another weed killer, this time Dow Chemical’s 2,4-D. The WTO says the herbicide, which has been used for more than 70 years, is “possibly carcinogenic to humans” based on research conducted by its International Agency for Research on Cancer (IARC). They say that epidemiological studies provided “strong evidence” that 2,4-D induces oxidative stress, and moderate evidence that 2,4-D causes immunosuppression. They did not classify it as “probably” carcinogenic because they said there was “inadequate evidence in humans and limited evidence in experimental animals” of ties between 2,4-D and cancer. The IARC said in March that glyphosate, the main ingredient in Roundup, was ““probably carcinogenic to humans.” Dow, the National Corn Growers Association and CropLife America are just a few of the industry groups and businesses that have expressed outrage over the IARC declaration.

> Who Likes Us And Who Doesn't? America’s overall image around the world remains largely positive. Across the nations surveyed (excluding the U.S.). A median of 69% hold a favorable opinion of the U.S., while just 24% express an unfavorable view. However, there is significant variation among regions and countries. Below are some of the specifics. To read more details and specifics please go to Pew Research Center.

Global Numbers & Market Talk

East central Nebraska - Corn is looking fair at best around here. Typically when you drive in this part of Nebraska in late June, you see corn fields that look like green carpet,corner to corner, mile after mile. This year the corn is yellow and streaking and the leafs are brown. We are very wet and everything is late. The beans do not look any better and most even worse.

South central Minnesota - I feel like we are in one of the garden spots of the country. Things went in the ground early, with good soil moisture levels and above average soil temps. It has been one of the easier planting seasons that we have had for our farms in a long time. All of our crops germinated quickly, which was very suitable for emergence that was fast and very consistent from field to field. Right after planting we were getting half inch to inch rains, pretty much every two or three days. We got a nice two inches of rain this morning that will certainly help again. We were able to make it through mid June without another hail storm, which has happened the last two years and really hurt our crops. We look to be pollinating here in the next few weeks and right now the weather conditions should be very favorable for overall plant production and higher yield potential.

East central Kansas: After a protracted planting season we just got done with beans with one day to spare on full insurance date (June 25). I planted the first corn on April 1, first insurable day, which is tasseling now. Finished corn May 3 and was rained out until starting beans a week ago today. Our weather pattern finally shifted the rains north of I 70, but hopefully not for the rest of the summer. With the forecast we had 10 days ago I wouldn't have believed this area would have any beans planted by now. Most of the neighbors appear to be about done and starting in on wheat and hay.

Global Numbers & Market Talk

Technology May Lower Commodity Prices: Reuters’ commodity analyst Clyde Russell looks at a recent report from the Committee for Economic Development of Australia (CEDA) which says about 40 percent of Australia's current workforce, have a "moderate to high" likelihood of disappearing in the next 10 to 15 years due to advances in technology. Mining and agriculture are among the sectors likely to be affected the most. While the report focuses on Australia, technological changes will happen worldwide and most advanced economies can expect to feel the impact, one of which may be lower commodity prices.

Brazil’s Second Crop Corn Crop Exceeding Expectations: After all the worries about late planting, the 2015 safrinha corn crop in Brazil is ending up better than anyone has expected. In fact, Soybean and Corn Advisor says safrinha corn yields are expected to be at record levels due to excellent weather during the growing season.

Still Looking For Just The Right Dividend Stock? The "Sure Dividend" group recently posted an article on valuewalk.com titled "Why Exxon Mobil May Be The Best Dividend Investment Today". With others in the industry sputtering, Exxon Mobil is expected to make $18.4 billion in net profit this year. Many analyst believe it would take sustained oil prices in the $30s for Exxon Mobil to incur a loss on operations. The opinions and websites linked above are worth a look if your interested or researching dividend strategies.

Lamb With Jellyfish Gene Likely Ended Up On Someone’s Dinner Plate: A lamb that was genetically modified with jellyfish DNA was sold for consumption in France, according to a report today from French newspaper Le Parisien. The lamb, named "Ruby," was part of a "Green Sheep" research program at France's National Institute for Agricultural Research (INRA). Le Parisien reports that the lamb was sold to a slaughterhouse last fall, along with non-genetically modified sheep. It was then sold by the slaughterhouse to an unnamed individual in October 2014, though it's not clear how many people may have eaten it. Read more HERE.

Geomagnetic Storm Providing Most Dazzling Aurora Displays In Years: Years of weak solar activity have produced few widespread displays of the aurora borealis. The Solstice Storm of 2015 has changed all that though. A series of CMEs hit Earth's magnetic field on June 22nd, producing a severe G4-class geomagnetic storm. Northern Lights spilled across the Canadian border into more than 20 US states. Check out a gallery of pictures submitted to Spaceweather​ ​so far​. Another round of geomagnetic storms was expected to hit the Earth yesterday, so there may be more incredible pics to come!

From My Perspective

Farmland Values Decline for 19th Straight Month
As of late we have seen numerous reports circulating about declines in farmland values. The most recent report comes from Creighton University’s Monthly Economic Outlook Survey which now shows 19 straight months of setbacks for US agricultural land. The setbacks had been rather small, but appear to becoming a bit more significant in some areas as crop prices remain at the low end of the trading range. The report shows an index value of 31.1 this month for farmland values in 10 states ranging from North Dakota to Missouri. This compares to the 39.7 reading reported last month. The latest findings indicate a slowdown across the whole range of states studied. The only state that showed signs of land price appreciation was North Dakota at an index of 56.0, which I would have to challenge based on other surveys I have read. All other states showed readings below 50.0, which basically suggests that prices will continue to depreciate. While farmland values are suffering from low global commodity prices and decreasing farm revenue, we are also facing headwinds created by a stronger U.S. dollar and fears surrounding higher interest rates. As you know, the thought of increased borrowing costs with the combination of low crop prices only adds more pressure to farmers who are looking to expand. Of the bankers surveyed, 40% anticipate a rate hike by the Fed in 2015. The survey also put June’s farm equipment-sales index at a record low 12.5, which was down from April’s 15.6, representing a 23rd successive month of decline. Ultimately, bankers and survey responders believe that farm income will again decline in 2015 with farmers expected to become even more cautious about purchasing more agricultural land or equipment. I should note, I recently read in another report issued by Farmers National Company that the volume of properties for sale was down about 40 percent over the past six months, as compared to the past two years. They were basically saying demand was still good for the "quality ground," but the B and C grade ground wasn't being bid as aggressively in years past, which has caused values to drift sideways to lower in many locations. (Source: CreightonU)

Seventeen Year-Old Creates The Band-Aid Of The Future
One of the biggest challenges emergency workers face can be to stop the bleeding of a serious wound. In fact, blood loss is the leading cause of preventable death on the battlefield and the second leading cause of non-military pre-hospital deaths. Now imagine a gel that can stop bleeding and seal a serious wound within 12 seconds? That is exactly what VetiGel promises to do. It was invented by a young man named Joe Landolina, the 22-year-old CEO and co-founder of biotech firm Suneris. Vetigel is an algae-based polymer gel that can be safely placed on or injected into skin and even soft organs. The gel begins to form a clot in under 12 seconds and permanently seals the would within minutes. Landolina explains VetiGel with a comparison to LEGO blocks - the algae is made up of tiny individual polymers, that break down into even tinier pieces, all “stacked” on top of each other. When it hits damaged tissue, it forms a mesh-like structure that not only holds a wound together, but acts a “scaffold” for the bodies natural tissue repairing protein, which is called “fibrin.” Landolina came up with VetiGel while he was still in high school, actually creating an early version in his grandfather’s lab. During his freshman year at New York University, he entered the gel in a business innovation competition. Up against graduate students and even professors, Landolina’s gel won second place. He partnered with another undergraduate with a marketing and finance degree and the two spent the next four years building a business around VetiGel. The product will be rolled out to veterinarians this summer and Landolina believes human use will soon follow. He expects to receive FDA approval within the next year to begin human testing. If VetiGel successfully clears those hoops, they will first make it available to the military and EMTs. That will be followed by operating rooms and ultimately, home medicine cabinets. ​Landolina actually delivered a TED talk explaining how VetiGel works, which you can watch HERE. ​Suneris is not a publicly traded company and I've not seen any information indicating they intend to pursue public funding, but you never know! It might be one to keep on your radar. Remember, before pursuing any type of investment, consult your advisor! (Source: Business Insider)

What You Need To Know About The Problems Brewing In The South China Sea
China is once again in the news for flexing it’s muscle in the disputed South China Sea. The country has been pushing claims to about 80% of the Sea’s waters, an area in which approximately 40% of the world’s trade passes. It’s also an area where several other Asian nations stake claims, including Indonesia, Malaysia, the Philippines, Taiwan and Vietnam. In the last few years the dispute has grown even stronger as China escalates their aggressions. You may recall last summer the conflict between China and Vietnam after China planted an oil rig near the Parcel Islands, in waters Vietnam claims for itself. It sparked riots in Vietnam and some tense standoffs between Vietnamese and Chinese vessels. The latest concerns surround China’s declaration of an “air-defense identification zone” and artificial island building. Particularly with the addition of permanent landmasses, the conflict is reaching a newly worrisome level with no obvious resolution in sight. Here is a brief explanation of the moving parts: (Sources: Reuters, Foreign Policy)

  • Who Really Owns The Disputed Territories? The area in question involves both islands and waters. China claims what is known as the “nine-dash line” area (see map below), which encompasses 291 islands and reefs including the Parcel Islands, Spratly Islands and the area where they are currently building islands, known as the “great wall of sand.” Their claims are based on historical records dating as far back as the Xia Dynasty (circa 2070 - 1600 BC). The U.S. strongly rejects China’s claims and contends the South China Sea is international water. Further, the U.S. says the only the United Nations Convention on Laws of the Sea (UNCLOS) can decide the sovereignty of the area. One of those laws prohibits staking a claim to land that is submerged at high tide, including land that previously was submerged but has been built up by construction - as is the case with China’s new islands.
  • Why Does China Want The South China Sea? As I mentioned, about 40% of global trade passes through the area in question. Controlling those shipping lanes would give them considerable leverage in any number of geopolitical matters. It’s also a resource rich area believed to contain massive reserves of oil and natural gas, along with lucrative fishing areas. A major point of contention with China is the fact that “international waters” are open to any nation to conduct patrols or perform military exercises. In particular, China would prefer to keep both the U.S. and Japan out of their “backyard.”
  • Who Has Built What In The Area? Island building and construction on existing islands is not a recent development and China is not the only country to have done it. Vietnam and the Philippines claim 29 artificial islands between them. Vietnam, the Philippines and Taiwan have also installed military forces on at least some of their islands. Keep in mind though that these countries in no way can compete with China’s military might, nor have their land reclamations come anywhere close to China’s activities. They have created over 2,000 acres of new land in the South China Sea in just the last 18 months and have placed military equipment on nearly all the completed islands.
  • How Is The U.S. Responding? While the U.S. mostly overlooked reclamation projects by the smaller Asian countries, they are extremely alarmed by China’s activities. The U.S. has vowed that its military assets would continue to operate in the area as “international law allows”, part of what they call freedom of navigation missions. Their other tactic is to strengthen ties with China’s nervous neighbors. Building even an “unofficial” coalition of partners willing to stand up to the Asian giant is seen by most as the most effective way toward a diplomatic solution. The U.S. is offering assistance to its allies via intelligence and military equipment. They’ve also enlisted Japan’s help in providing military equipment to Vietnam and the Philippines.
  • What To Expect Next: China is determined to become a first-rank maritime power, but to do so, they must first somehow become preeminent in its home waters. America’s determination to curb their aggressions can only be expected to escalate tensions further. As the U.S. continues to operate surveillance aircraft and military ships in the area, China has threatened to defend their territory, though they have not taken any military action. For China, the government is under pressure from political elites in the Communist Party to assert China’s superiority. President Xi Jinping and his party risk losing their support if they are seen being too accommodating. The U.S. faces a similar dilemma of looking weak and lacking resolve, impressions already created by current policies toward Ukraine and the Middle East. A direct conflict between the U.S. and China is seen as unlikely by most experts that I’ve read as ultimately neither really wants to engage militarily. For now, Washington’s main move is going to be discouraging China from continuing down this path and preventing them from setting any legal precedent for claiming sovereignty via their land reclamations.

Cash Sales & Hedging Totals
From My Perspective
Today In History

1876 - Native American forces led by Chiefs Crazy Horse and Sitting Bull defeat the U.S. Army troops of Lieutenant Colonel George Armstrong Custer in a bloody battle near southern Montana’s Little Bighorn River. Crazy Horse and Sitting Bull, leaders of the Sioux tribe on the Great Plains, strongly resisted the mid-19th-century efforts of the U.S. government to confine their people to reservations. In 1875, after gold was discovered in South Dakota’s Black Hills, the U.S. Army ignored previous treaty agreements and invaded the region. This betrayal led many Sioux and Cheyenne tribesmen to leave their reservations and join Sitting Bull and Crazy Horse in Montana. By the late spring of 1876, more than 10,000 Native Americans had gathered in a camp along the Little Bighorn River–which they called the Greasy Grass–in defiance of a U.S. War Department order to return to their reservations or risk being attacked. In mid-June, three columns of U.S. soldiers lined up against the camp and prepared to march. A force of 1,200 Native Americans turned back the first column on June 17. Five days later, General Alfred Terry ordered Custer’s 7th Cavalry to scout ahead for enemy troops. On the morning of June 25, Custer drew near the camp and decided to press on ahead rather than wait for reinforcements. At mid-day, Custer’s 600 men entered the Little Bighorn Valley. Among the Native Americans, word quickly spread of the impending attack. The older Sitting Bull rallied the warriors and saw to the safety of the women and children, while Crazy Horse set off with a large force to meet the attackers head on. Despite Custer’s desperate attempts to regroup his men, they were quickly overwhelmed. Custer and some 200 men in his battalion were attacked by as many as 3,000 Native Americans; within an hour, Custer and every last one of his soldier were dead. The Battle of Little Bighorn–also called Custer’s Last Stand–marked the most decisive Native American victory and the worst U.S. Army defeat in the long Plains Indian War. The gruesome fate of Custer and his men outraged many white Americans and confirmed their image of the Indians as wild and bloodthirsty. Meanwhile, the U.S. government increased its efforts to subdue the tribes. Within five years, almost all of the Sioux and Cheyenne would be confined to reservations.

1956 - The last Packard–the classic American luxury car with the famously enigmatic slogan “Ask the Man Who Owns One”–rolls off the production line at Packard’s plant in Detroit, Michigan. Mechanical engineer James Ward Packard and his brother, William Dowd Packard, built their first automobile, a buggy-type vehicle with a single cylinder engine, in Warren, Ohio in 1899. The Packard Motor Car Company earned fame early on for a four-cylinder aluminum speedster called the “Gray Wolf,” released in 1904. It became one of the first American racing cars to be available for sale to the general public. With the 1916 release of the Twin Six, with its revolutionary V-12 engine, Packard established itself as the country’s leading luxury-car manufacturer. World War I saw Packard convert to war production earlier than most companies, and the Twin Six was adapted into the Liberty Aircraft engine, by far the most important single output of America’s wartime industry. Packards had large, square bodies that suggested an elegant solidity, and the company was renowned for its hand-finished attention to detail. In the 1930s, however, the superior resources of General Motors and the success of its V-16 engine pushed Cadillac past Packard as the premier luxury car in America. With sales dwindling by the 1950s, Packard merged with the much larger Studebaker Corporation in the hope of cutting its production costs. The new Packard-Studebaker became the fourth largest manufacturer of cars in the nation. Studebaker was struggling as well, however, and eventually dropped all its own big cars as well as the Packard. In 1956, Packard-Studebaker’s then-president, James Nance, made the decision to suspend Packard’s manufacturing operations in Detroit. Though the company would continue to manufacture cars in South Bend, Indiana, until 1958, the final model produced on June 25, 1956, is considered the last true Packard.

1957 - A hurricane watch is declared for the Texas and Louisiana coastlines as a tropical depression from the Gulf of Mexico heads toward the United States. The storm quickly becomes Hurricane Audrey, which kills 390 people. A day after the watch was declared, the residents of Louisiana near the Gulf of Mexico were told to seek higher ground. By the time many residents actually began to follow the advice–on the morning of June 27–it was too late. Roads were already washed out because of the strong rain and winds and an oil rig in the gulf had capsized after a storm surge. Water on the coast reached as high as 15 feet above the normal high-tide mark. Boats were washed ashore by the tremendous waves. Many people were simply swept away by the floods. Eighteen people in a single family perished when their home was knocked down and washed away. Some survivors lived by tying themselves to tree tops, other by clinging to driftwood. At least one person died from the bite of a poisonous water snake while clinging to wreckage. Many bodies were not found for months after the hurricane–including one that was not recovered until the next year. It is possible that the death toll from Audrey exceeded 500 people. Louisiana was not the only place that suffered Audrey’s wrath. A building in Port Arthur, Texas, collapsed under heavy rain and wind. As far away as Canada, four people lost their lives at the tail end of the storm over a week later. More than 40,000 people were left homeless by Hurricane Audrey.

Fri. 6/26 - Quarterly Hogs and Pigs

Tues. 6/30 - USDA Quarterly Stocks and Acreage Report

Fri. 7/3 - Fourth of July Observed - Market Closed

Wed. 7/8 - Minutes from 6/17 FOMC Meeting Released

Fri. 7/10 - USDA Supply and Demand

Fri. 7/24 - Cattle On Feed

Tues. 7/28-29 - FOMC Meeting

Wed. 8/5 - USDA Agricultural Land Values & Cash Rents

Wed. 8/12 - USDA Supply and Demand

Wed. 8/19 - Minutes from 7/29 FOMC Meeting Released

Fri. 8/21 - Cattle on Feed

Tues. 8/25 - Farm Income Forecast

Mon. 9/7 - Labor Day - Market Closed

Fri. 9/11 - USDA Supply and Demand

Wed. 9/16-17 - FOMC Meeting

Fri. 9/18 - Cattle on Feed

Fri. 9/25 - Quarterly Hogs and Pigs

Wed. 9/30 - USDA Quarterly Stocks

CORN SEP 2015 CONTRACT
TECHNICAL LEVELS - NETRAL

N

• Long-Term Resistance Level #3 @ $4.22
• Intermediate Resistance Level #2 @ $4.10
• Short-Term Resistance Level #1 @$3.93

• Previous Close $3.71^4
• Short-Term Support Level #1 @ $3.64
• Intermediate Support Level #2 @ $3.52
• Long-Term Support Level #3 @ $2.23

SOYBEANS NOV 2015 CONTRACT
TECHNICAL LEVELS - NEUTRAL

N

• Long-Term Resistance Level #3 @ $11.30
• Intermediate Resistance Level #2 @ $10.69
• Short-Term Resistance Level #1 @ $10.27

• Previous Close $9.56^0
• Short-Term Support Level #1 @ $9.52
• Intermediate Support Level #2 @ $9.27
• Long-Term Support Level #3 @ $9.05

WHEAT SEP 2015 CONTRACT
TECHNICAL LEVELS - NEUTRAL

N

• Long-Term Resistance Level #3 @ $5.58
• Intermediate Resistance Level #2 @ $5.47
• Short-Term Resistance Level #1 @ $5.32

• Previous Close $5.23^2
• Short-Term Support Level #1 @ $5.16
• Intermediate Support Level#2 @ $4.88
• Long-Term Support Level #3 @ $4.64

CATTLE AUG 2015 CONTRACT
TECHNICAL LEVELS - BULLISH

-1

• Long-Term Resistance Level #3 @ $175.000
• Intermediate Resistance Level #2 @ $169.550
• Short-Term Resistance Level #1 @ $159.900

• Previous Close $150.325
• Short-Term Support Level #1 @ $144.975
• Intermediate Support Level #2 @ $130.550
• Long-Term Support Level #3 @ $127.975

HOGS AUG 2015 CONTRACT
TECHNICAL LEVELS - BEARISH

+2

• Long-Term Resistance Level #3 @ $92.500
• Intermediate Resistance Level #2 @ $88.700
• Short-Term Resistance Level #1 @ $85.950

• Previous Close $72.350
• Short-Term Support Level #1 @ $62.975
• Intermediate Support Level #2 @ $56.100
• Long-Term Support Level #3 @ $50.100

CRUDE OIL AUG 2015 CONTRACT
TECHNICAL LEVELS - BEARISH

-1

• Long-Term Resistance Level #3 @ $72.900
• Intermediate Resistance Level #2 @ $66.290
• Short-Term Resistance Level #1 @ $62.100

• Previous Close $60.27
• Short-Term Support Level #1 @ $41.50
• Intermediate Support Level #2 @ $39.00
• Intermediate Support Level #3 @ $30.90

S&P 500 SEP 2015 CONTRACT
TECHNICAL LEVELS - BULLISH

+1

• Long-Term Resistance Level #3 @ $2,201.00
• Intermediate Resistance Level #2 @ $2,190.00
• Short-Term Resistance Level #1 @ $2,159.00

• Previous Close $2,009.50
• Short-Term Support Level #1 @ $2,020.75
• Intermediate Support Level #2 @ $1,979.00
• Long-Term Support Level #3 @ $1,919.00

US DOLLAR SEP 2015 CONTRACT
TECHNICAL LEVELS - BULLISH

N

• Long-Term Resistance Level #3 @ $109.90
• Intermediate Resistance Level #2 @ $104.955
• Short-Term Resistance Level #1 @ $101.345

• Previous Close $95.418
• Short-Term Support Level #1 @ $78.90
• Intermediate Support Level #2 @ $75.10
• Long-Term Support Level #3 @ $72.80

 

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My Own Personal Truisms

"Not To Trade, is often considered a good trading decision..."

"First Rule of HOLES: When you are in one stop digging..."

"Every looser in Vegas, always walks away from the table thinking he could have done better, the winners on the other hand leave while on top..."

"Bulls make money, Bears make money, but pigs get slaughtered..."

"The markets ability to remain irrational can often times last much longer than your ability to remain solvent..."

I'm more of a long-term player, therefore you will not see me give many short-term suggestions or trade ideas. One of my most important rules is that I always follow my long-term direction. Therefore, as long as I am "bullish" a market I will only play that particular market in one of three ways.

  • Option #1 - Conservatively long.
  • Option #2 - Aggressively long.
  • Option #3 - Sitting on the sideline.

I never initiate a "short" position in a market that I am "bullish" longer-term, nor do I initiate a "long" position in a market I am "bearish" longer-term.