Headlines:

  • JBS wins breathing space over $6.5bn debts, sending shares soaring
    Shares in JBS bounced nearly 8% after the meat giant, seeking to stabilize its finances after receiving a record fine, revealed deals with lenders over $6.5bn of debts, and was seen as potentially in line for a bid for its Pilgrim’s Pride division. Shares in Brazil-based JBS hit R$7.53 at one stage, before easing back to R$7.46 in late deals in Sao Paulo, a gain of 6.7% on the day. However, the shares are still down some 35% so far in 2017 – a year in which the group has agreed a record $3.2bn fine for its role in corruption claims that have threatened to topple President Michel Temer, and with Brazil’s meat sector caught up in food safety scandals too. Wednesday’s share recovery following an announcement by the group of deals to gain breathing space of its debt burden, winning agreement to maintain credit lines from banks responsible for the equivalent of 93% of loans to its key JBS Brazil business.
  • US farmland overtakes timberland in investor returns
    Timberland has fallen back behind farmland as a US investment, thanks to notable improvement in income from growing annual crops – although there remain worries yet over the agricultural economy. US timberland investors earned a return of 0.7% for the April-to-June period, down from 0.8% the previous quarter and 1.0% a year before, reflecting a flat performance for land price growth, the National Council of Real Estate Investment Fiduciaries said. “After a flat year for appreciation in 2016, timberland has only had marginal appreciation thus far in 2017, at 0.13% in the first quarter and 0.08% in the second quarter,” the council said. Returns in the US South provide particularly weak, undermined by land price depreciation of 0.3% over the April-to-June quarter.

 

Summary:

Corn, Wheat and Beans not only closed higher today they all settled near their intraday highs staving off what was starting to looking like the possibility of breaking below key support levels. Over the past few trading days Corn and Wheat had surrendered most of their gains from the end of June through July 11th. Soybean futures on the other hand has only given up about 38% of its gains for the same period. Everyone was up about 1% today with the idea that the move from yesterday was perhaps a bit overdone. It is not unusual for markets to consider the extent of recent moves and simply recalibrate. All three markets were with close to or inside of an oversold status by what of our stochastic parameters. Additionally, the markets had reached Volatility Based Support zones which lends themselves to causing short-term pauses in the midst of market declines. If the weather continues to ease the projected production could continue to wreak havoc on prices. We are still in the midst of a weather based market so volatile price swings could continue to plague the price action.