Blog » Canola, Committees and Cryptocurrency for Christmas
Canola, Committees and Cryptocurrency for Christmas
I wanted to provide a quick update prior to the busyness of the Christmas season. Frankly, news will be rather slow and hard to come by this time of the year. I do wish we'd have an all out blizzard with several feet of the white stuff to blanket this region.
Boris and Natasha - Sec of State Tillerson stated that the Russian troop occupation of eastern Ukraine is the biggest obstacle to 'normal' relations between the US and Russia. This recent airspace encounter over Syrian airspace isn't going to calm the rhetoric or relations.
Canola oil- Perhaps you've already read or have heard about a recent Temple University study on the usage of canola oil and its findings.
Cryptocurrency - Recognizing that agriculture is probably the least digitized industry in the world is soon to change. Large pension fund(s) will soon be able to trade bitcoin as a commodity after the CME group announced it would open a market for trading bitcoin futures. Earlier this month there was an article on 'cryptocurrency' sharing how the commodities market will eventually use such technology and currency for trades.
As a matter of fact, the first ever settlement of a physical grain trade between a farmer and buyer utilizing 'blockchain technology' occurred last December. The wheat trade that was completed in Australia was through a company called AgriDigita utilizing blockchain technology. Blockchain is a shared digital ledger accounting system that records each transaction and cannot be modified by the user (buyer or seller). Blockchain is the technology behind the bitcoin revolution. Point and counterpoint follow:
Point and Counterpoint and Tether, an $814 million mystery.
Gift Giving - For those of you that are concerned with toy safety, here's a link to this year's 10 most hazardous...I must take exception to an item on the list, Nerf Crossbow. Honestly, what responsible adult/guardian would use such without the precaution of safety glasses/goggles? Having two grandsons at 4 years of age, Nerf guns are better than a candy store! The choices are utterly amazing, fairly accurate and they can leave a mark. Needless to say, this is a source of much entertainment and laughter in our home - all properly equipped with eye protection.
Farm Bill - House Ag Committe Chairman Conaway announced the unveiling of a website that includes a link on the Farm Bill. Conaway reiterated his commitment to completing a Farm Bill on time. He also said that he has submitted a draft of the bill to the CBO for their scoring and hopes to mark up the bill in the first quarter. Senate Ag Committee Chairman Roberts also indicated he plans to move on the bill early in 2018. Sen Grassley indicated that he believed the Ag Committee was 3 months behind in writing the bill. Meanwhile, Representative Collin Peterson said some Senate Democrats want to delay the Farm Bill until 2019 on the belief that Democrats will be in the majority, but Peterson said he disagrees with this viewpoint.
Kick the can - Congress passed a two-week funding extension that expires this Friday. It is expected that another, short term extension will be passed in January, followed by a longer-term extension that will fund the government through the end of the fiscal year 2018 (September 30, 2018).
Markets - As expected on Thursday, the Feds raised interest rates 0.25 percentage points to 1.5%, indicating additional rate increases for 2018. I suspect this will have a similar affect again as previous - strengthened dollar, ratcheting up the cost of our products to be exported. Overall, exports have been a bit sluggish for the past several weeks, but last week's export report showed a pace that is 2x what's needed to attain USDA's predictions. Harvest rains impacted the quality of the last half of the Australian harvest - exact impact on quality is being assessed and determined. Warm, dry weather in South America has been a cause for concern of late. Rain was forecast this weekend; I suspect the corn and bean market will respond accordingly to moisture conditions in Brazil and Argentina.
Livestock prices have been the lone bright spot with continued strength shown - will it sustain itself? Cattlemen, have you taken steps to lock in profits?
Timing is everything - I caught an interview with a gent from Allendale, Inc., stating world corn stocks are down 10%, roughly 800 million bushels from 2016. Carryover is at record levels for all starch grains; however demand is also at record levels and continues to build. For example, world corn consumption is greater than production, record yields continue to mask this and nobody wants to talk about that...if there was a 2% loss in production worldwide, which would be a billion bushel loss, this is half of the carryover and would change corn market dynamics. Last week's USDA report cited the exact opposite, a slight increase in carryover stocks. After said report, some are now predicting corn acreage for 2018 to be less than 90 million acres and beans to exceed 91 million acres...hmmm. Couple with China needing an annual 1 billion bushels to meet their recent ethanol mandate by 2020.
Prevent planting – In a surprise move by RMA, they announced that previously available 10% additional buy-up for prevent planting is no longer available, effective 2018 spring crops. All insureds who previously had this option, will be automatically moved to the 5% buy-up. This isn’t a big item in our region, however this is a different story in the upper Midwest.
Pot usage - Who'd a ever thunk pot usage would have increased the risks associated with driving? Duh, impaired driving or under the influence is just that, impaired driving! Read this...
Weather - Although we're supposedly in the grips of a La Nina weather pattern, our region's moisture pattern is considerably different than it was last year at this time. We're on pace for record, or near record dry December. The same holds true for much of the Great Plains region of the US. Football isn't the only drought in Lincoln, the city has received less than a tenth of moisture over the past 60 days - driest on record. As you can see from the map below, the drought area is expanding with what looks to me 2/3 of the country in the grips of a moisture deficit. I anticipate the PNW to soon make the map again.
Year In Review - Annually, they are various posts regarding the lengths some individuals will go to attain their wishes. The first link is an insurance industry post called the 'newest members of the Hall of Shame' providing the worst insurance scammers of the year; without exception, this year's list has some real doozies.
This link is recognizing the 2017 Darwin Award winners...self explanatory.
Merry Christmas to all and to all a good night! I wish all a Blessed New Year.
Until next time,
"People only see what they are prepared to see." ~Ralph Waldo Emerson
"Pretty much all the honest truth-telling there is in the world is done by children.” ~Oliver Wendall Holmes
McGregor Risk Management Services, LLC
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Posted in Risk Management; Posted December 18, 2017 by Curtis Evanenko
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