No Bull, December 15
12 Days of Christmas
1 Big Price Tag
Yesterday one lucky bidder walked away with a 3 year lease of 241 acres in south central Iowa for one big price tag of $475 per acre.
While sub-$500 rent might not sound like much to some of you (cough, cough central Illinois) $475 an acre for a 49.6 CSR2 is an eye-popper.
If you read last week’s No Bull (HERE) you may recall that CSR2 (Corn Suitability Rating) index goes up to 100… meaning this 241 acres at 49.6 is very marginal… as in 160 to 180 bpa corn each year, according to Jim @theLandTalker Rothermich.
What gives?
Hog poop. That’s what.
When I asked Jim for the scoop he said the farm gets hog effluent (aka manure), boosting the value of the lease agreement.
2 Big Smiles
Santa came to church last Sunday and for once - EVERYONE WAS SMILING AND LOOKING AT THE CAMERA.
It is a Christmas Miracle!
3 Million Metric Tonnes
Weekly soybean export sales were a whopper at nearly 3 million metric tonnes. Total sales of 2.94 mmt (108 mil bu) rank at the second-highest week this marketing year and one of the highest single weeks on record.
Sales were split to both China and ‘Unknown’ as buyers made last-minute purchases of US beans ahead of Brazil’s harvest.
Last week’s purchases put us ahead of the pace needed to hit USDA’s current full-year export estimate by more than 130 million bushels. We will probably need that head start though as Brazil has a whopper coming on.
4 Weeks In a Row
In Wednesday’s weekly EIA report, ethanol stocks rose for the 4th week in a row.
Seasonally it is the time of year for stocks to build - but this week’s bump took stocks to an all-time high for this point in the year.
This coincides with weaker gasoline demand where inventories are up despite increased exports and lower prices - all of which are concerning for US ethanol demand.
Five-thousand dollars
$5,000 is supposedly what Elon Musk offered 20 year old Florida college student Jack Sweeney to take down his Twitter account dedicated to tracking the location of Musk’s private jet a few months back.
Sweeney wrote an algorithm to track the plane’s location using publicly available flight data, amassing more than half a million followers since its creation in 2020.
Although Musk had previously stated he was a staunch fan of free speech and would not ban the account… Sweeny’s @ElonJet was suspended by Twitter on Wednesday, citing increased risk of physical harm as the reason behind the move.
Similar accounts tracking the jets of Meta CEO Mark Zuckerberg and Amazon founder Jeff Bezos have also been suspended.
6 Straight Weekly Declines
Diesel prices continue their much-welcomed trek lower, down for 6 straight weeks now. Prices dropped 21.3 cents this past week - the largest weekly decline since October 2008, near the start of the global financial crisis.
Nationally diesel is $4.754 per gallon, the lowest price we have seen since March 7, but remains $1.10 higher than one year ago.
Gasoline prices, on the other hand, now sit below year ago levels at $3.239 this week. The spread between retail gas and diesel also remains historically high at more than $1.50 per gallon (vs 30 cents one year ago).
7 Rate Hikes in 2022
The Fed continued down their path of historically aggressive action in 2022 this week, dishing out their 7th rate hike in a row.
Wednesday’s 50-basis point hike takes the federal funds rate to 4.25 to 4.50 percent, a change from their four consecutive 75-basis point hikes previously.
The Fed’s action in 2022 is the most aggressive in history. Although rates were hiked an equal 425 basis points in 2004 through 2006, the tightening was spread over 2 years versus the current tightening cycle of a mere nine months.
8 Point Improvement
According to the Buenos Aires Grain Exchange, Argentina’s soybean crop had an 8 point improvement in good/excellent conditions after last weekend’s better-than-expected rains benefitted parched soils.
19% of the crop is rated good/excellent up from 11% last week but down a whopping 66% from last year.
Soybeans are just over 50% planted in Argentina, nearly 20% behind a normal pace due to excessively dry conditions.
9 Days Away…
…from having a serious need for long underwear.
It depends on your location but check your weather app… Santa is bringing the North Pole along with him this Christmas!
10% Less
Haven’t heard this in a while - retail fertilizer costs have slowly been drifting lower in recent weeks. In fact, Urea is now 10% cheaper than it was one year ago - the only one of the 5 (retail-priced) fertilizers listed below that is less year-on-year.
The reprieve might be short-lived though as CoBank is expecting wholesale fertilizer costs to remain high during the first half of 2023 as expensive transportation costs (barge and rail) will keep prices elevated, according to their recently released annual outlook for 2023.
CoBank also notes that an estimated 70% of European fertilizer production was offline during Q3 2022 as the region dealt with record-high natural gas prices.
11 Months In
Looking at NOAA stats through November, the first 11 months of 2022 have been notable and not exactly in a positive way:
A reminder where we are today:
And where were were to start 2022:
12 Golden Eggs
Avian influenza is showing few signs of slowing with several additional outbreaks over the course of this past week.
Most notably, a South Dakota egg layer farm was hit resulting in the loss of 1.2 million chickens confirmed yesterday, plus more than half-a-million turkeys were lost Monday across Iowa, Minnesota, and South Dakota.
Total losses are 56 million to date.
As a result eggs continue to make new record highs especially as we enter what is typically a seasonal high of the year - peak holiday baking demand.
USDA’s National Shel Egg Index is a bit slow on their weekly weighted average (shocker) but their reported $4 price point is up $1 from the week prior and is more than $3 higher than prices one year ago.
Looking at ACTUAL wholesale values though - if you want to buy a load of large eggs today it will set you back north of $5.
Midwest large eggs set another new record at $5.23/dozen today which will only translate into higher prices at the grocery store as we head into next week.
Better buy those eggs you’ll need to bake Santa’s cookies today because they aren’t going to get cheaper until after the holidays and after we get past these million-plus-bird outbreaks.
Tonight’s No Bull has been sent in its entirety no matter if you are a paid subscriber or receiving the shortened free version each Thursday.
This year the original 12 Days of Christmas will set you back more than $45,000 - up 10.5% year on year.
If you are looking for a slightly less expensive and more practical gift for that special someone - consider a No Bull subscription for $29.50 a month (or $295 per year). I am partially biased, but what can I say?
I am confident you have wasted $29.50 on worse!
For paid subscribers - I will catch you this weekend!
Thanks,
