Midweek with December about to dawn there is some positive economic data showing growth in the US economy, but there is still plenty of concern about where a looming debt bubble is headed.
The equity market stocks were feeling a bit more optimistic as the second reading for 3rd quarter GDP growth came in at 5.2%. Beating analyst expectations of 4.9%, which was originally reported last month. Today’s reading compares to 2.1% GDP growth in the second quarter. Today’s upward revision for the third quarter largely reflects upward revisions to nonresidential fixed investment and state and local government spending that were partially offset by a downward revision to consumer spending, while also seeing downward revisions to imports. Personal income was revised upward by $18.8 billion to $218.3 billion in the third quarter, reflecting increases in compensation, nonfarm proprietors income and personal interest income. Disposable personal income was revised upward by $48.2 billion to $144 billion, while real disposable personal income rose 0.1%. Personal savings totaled $815.4 billion in the third quarter, which is an upward revision of $51 billion, with the personal savings rate surprisingly being revised 0.2% higher to 4.0%.
In the grain complex wheat made a strong move higher midweek after putting in contract lows on Tuesday. It appears to be a rumor of China purchasing US hard red winter wheat that is driving the market buy. However there were similar rumors on Tuesday afternoon for soybeans, but there have been no confirmations or flash sales from USDA to confirm these buys.
EIA data for the week ending November 24 showed US ethanol production dropped 1.2% or about 11,000 barrels to 1.011 million b/d. That is a 7 week low in US ethanol production. US ethanol stocks dropped 1.3% or 273,000 barrels to 21.379 million barrels. Stocks were 6.8% less than the same week last year and 1.2% below the five-year average. Inventories thinned across all regions except the Midwest (PADD 2). The volume of gasoline supplied to the U.S. market, a measure of implied demand, slid 3.2% to an 8-week low of 8.21 million b/d (125.80 bg annualized). Demand was 1.3% less than a year ago and 4.6% below the five-year average.
In the livestock cattle have now posted 2 consecutive sessions higher. Tuesday erased Monday’s losses and Wednesday put in some limited gains on the week. However at the close buyers seem to be thin and maybe showing some buyer exhaustion. So Thursday could be a lower day.
The CEO of Brazil meat packer Minerva claims the company will account for 50% of South American beef exports in the next five years due to Brazil’s lower wages and previous purchases the company has made of competitor plants. They currently hold a 40% share
The fed cattle cash trade has traded every day so far this week. With the sharp sell off early in the week feeders wanted to move cattle quickly. Wednesday Nebraska saw dressed deals at $275, $4 lower than last week’s weighted averages. Live business is being reported at $175, steady with yesterday’s trade, but $2 lower than last week’s weighted averages. Some light sells are also reported in parts of Kansas at $175, steady with the rest of the week’s trade, but $2 less than the prior week.
For the week ending November 18, 2023, Imported Beef Passed for Entry in the U.S. totaled 47,203, 105.53% of the previous week and 100.46% of the 4-week average.
Daily slaughter estimates Wednesday
Cattle
125,000 hd today 127,000 hd wk ago 126,000 hd yr ago
Hogs
484,000 hd today 450,000 hd wk ago 490,000 hd yr ago
Wednesday Midday Carcass Cutout
Beef
Choice dn 0.21 297.96
Select dn 1.74 264.61
C/S Spread 33.35
Loads 88
Pork
Carcass up 0.39 85.19
Bellies dn 9.87 87.58
Loads 176
Pre-opening grains with Mark Gold of Top Third Ag Marketing
Pre-opening livestock with Jerry Stowell of Country Futures
Midday market commentary with Mike Zuzolo of Global Commodity Analytics
Closing livestock market commentary with David Ericson of Ag Optimus
Closing grain market commentary with John Payne of Hedge Point Global Markets
