Headlines:

  • Bunge Q2 profit warning re-opens takeover speculation
    Bunge’s admission today that second quarter earnings are likely to be “below the low end of the range of analyst estimates” has prompted a wave of speculation that the company is more vulnerable to a takeover. But Bunge insists a cost cutting program will restore its shareholder value. New York-based Bunge’s full second quarter results are due on August 2nd. The company resisted an “informal approach” from Glencore over a “possible consensual business combination” in May this year, insisting the business was “committed to continuing to execute its global agrifoods strategy and pursuing opportunities for driving growth and value creation”. Glencore’s bid was widely interpreted as a move to extend its Canadian strength into the US market. Bunge’s first quarter earnings fell by 61% to $109 million, which it blamed on the large soya harvest in Brazil leading to weaker prices. This prompted growers to hold on to their crops in the hope of better values, but meant Bunge’s crushing plants were short of material to process and sell. This factor – which also affected fellow ABCD Company ADM – persisted into Q2
  • White House Confirms McKinney, Clovis Headed for Key USDA Posts
    The White House tonight said President Trump plans to nominate Indiana Agriculture Director Ted McKinney to become USDA’s first undersecretary for trade and foreign agricultural affairs, and Sam Clovis (shown at right) to be undersecretary for research, education and economics, confirming Agri-Pulse reports in mid-May. McKinney spent 19 years with Dow AgroSciences, and 14 years with Elanco, a subsidiary of Eli Lilly and Co. Clovis served as chief policy adviser on the Trump campaign and has been working as a senior White House adviser at USDA since the president took office.

 

Summary:

Cross stress and weather concern continues to be the driver of market action again today. All three markets closed close to their intraday highs with only one more trading day left for the week. With dry and hot weather persisting crop rating continue to deteriorate, thereby prompting lower yield estimates. The US Dollar has also been struggling against the backdrop of a basket world currencies and that is lending some strength to the commodity complex. Today the USDA released strong Weekly Sales numbers for Corn, Wheat and Soybeans. Corn was on the higher end of trade expectations at 678.6k metric tons (MT). Wheat crushed trade expectations coming in at 669.5k MT. Soybean rounded out the day at 1.932 million MT which was close to the top end of expectations.

Crude Oil futures has been moving higher since July 10th. Today it posted a higher high and higher low but close to the end of the trading day had surrendered all of its gains and was well into negative territory.