August 11, 2015
With rates up over the past seven/eight weeks, dry bulk owners, particularly Capesize, are breathing easier. Daily earnings increased by an average 45% month-over-month in July 2015. Dry bulk rates are exceed operating costs for the first time this year. In July, Capesize spot rates nearly doubled and approaching $20,000 per day (“p/d”) in early August. Panamax spot rates increased to an average $8,400 p/d (up 45% month-over-month), peaking at $9,400 p/d during mid-July.
August 9, 2015
Farmland values rise…Albeit at a Slowing Rate…
The value of all U.S. farm real estate, a measure of the value of all land and buildings on farms, rose 2.4% from 2014 to an average value of $3,020 per acre, according to U.S. Department of Agricultural (“USDA”). The U.S. cropland value increased 0.7%, to $4,130 per acre from the previous year. Pastureland value increased 2.3%, to $1,330 per acre. The increase in farmland value actually represents a deceleration from the 8.1% growth rate reported in 2014, the slowest pace since 2010.
Clearly since the financial crisis of 2008 the U.S. Government, the Federal Reserve, social activists and pundits have been preoccupied with the idea of “Too Big to Fail”. The U.S. government enacted the Dodd–Frank Wall Street Reform and Consumer Protection Act on July 10, 2010. As described by President Obama, this Act to change the U.S. financial regulatory system (and impact the global financial system) would be a “sweeping overhaul of the United States financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression”.
The greatest impact of Dodd-Frank on the marketplace has been the destruction/elimination of entrepreneurial. Instead of controlling those financial entities that are “too big to fail”, Dodd-Frank has enhanced their size, power and market competitiveness as compared to smaller entities. The regulatory framework which Dodd-Frank has put in place has all but limited entrepreneurial development of financial institutions, such as start up hedge funds or new start-up banking/financial institutions, The Dodd-Frank Act has not only increased the likelihood that a large entity will need to be protected from failing, but also that its failure will have a significant and systemic impact as these entities have become even more pervasive throughout American society and the economy.
August 3, 2015
Bunge CEO expects Chinese buys of U.S. soybeans to ramp up in fourth quarter…
While forward sales of 2015-2016 soybeans are off to a notably slow start (down around 50% from last year at this point), Bunge’s CEO Soren Schroder told Reuters he expects business will accelerate in the fourth quarter thanks to purchases by China. The top importer has been buying a record amount of soybeans from South America in recent months, but Mr. Shroder said positive soy crush margins should keep import demand strong.
“Three months of record imports by China means that they’re sitting on comfortable inventories and are therefore not in a hurry to go out and forward-buy a lot of beans,” Schroder said, continuing, “But I think when we get to October, November, December, the Chinese will be there in style.” But he did note that crush margins are expected to be around half as strong the second half of the year.
July was a bad month for commodities…..
Commodities turned in their worst performance in July 2015 since September 2011. The Bloomberg Commodity Index dropped roughly 10% for the month amid rising supplies and Chinese demand concerns. Investors also expect the U.S. Federal Reserve to raise interest rates later this year, which is keeping the dollar supported and weighing on commodities.