Las guerras comerciales se ganan o se pierden en los costos de oportunidad marginales.



Screen Shot 2018-08-05 at 4.29.35 PM

(Bloomberg) — Stocks pared the volatile morning session’s rally with the S&P failing to pierce a recent congestion level around 2,675; the broad index remains on the cusp of a correction.

GE sank to a nine-year low on disappointing results. 

Facebook reports after the markets close.

Screen Shot 2018-08-05 at 4.29.43 PMScreen Shot 2018-08-05 at 4.29.47 PM

Treasuries fell and the dollar rose; the Bloomberg dollar index set a 2018 high.

Cable extended losses after S&P said the chance of a no-deal Brexit is now a rating consideration.

Italian sovereign bonds fell, the spread over German bunds widening as EU concerns on Italian debt weighed.

Elsewhere, copper extended the month’s slide while crude fell as trade tensions weigh on global demand.

Key Headlines:

  • EU commission says Italy debt a concern for the whole euro- zone
  • U.S. consumer confidence in Oct. rose to 137.9 vs. 135.3 prior
  • Mexico 3Q preliminary GDP 2.6% y/y; estimate 2.4%
  • German inflation accelerates to 2.4%, highest since February 2012

Screen Shot 2018-08-05 at 4.29.51 PM

Screen Shot 2018-08-06 at 3.05.39 PM.png

(Bloomberg) — Rapeseed futures in Paris are trading at a one-month low. The market is under pressure from declining soybean and canola prices, according to Agritel. Parts of Europe are also poised to get a bout of beneficial rains. In Ukraine, the grain harvest is nearing the finish and farmers are almost done seeding winter grains, the agriculture ministry says.

Market Movers

Rapeseed futures for Feb. fall as much as 0.3% to EU373 a ton in Paris, contract’s lowest since Sept. 27

Oilseeds are “still experiencing a bearish pressure implied by the structural weakness of the soybean in Chicago,” Agritel says in note Dec. wheat futures fall as much as 1.6% on CBOT

Latest News

Ukraine Harvested  57.5m Tons of Grain So Far This Season Farmers harvested grain from 13.3m ha, or 90% of the planted area, with an average yield of 4.31 tons/ha, the Agriculture Ministry says Drought and Tariffs  Awaken Commodities in Boon for Top Exchange Trading in CME Agriculture complex jumped most in three years.


Turkish Grain Board  Plans to Purchase 2.5m Tons Wheat in 2019 Turkey sees Grain Board, or TMO, purchasing 0.5m ton corn in 2019, according to the presidency’s annual program published in Official Gazette Russian Wheat

Price  Falls Amid Rising Export Competition Russian wheat export price fell to $224/ton as of Friday

Crop Weather

U.S.:  Midwest Faces Deluge, Threatening Harvest

EMEA:  Rain Boosts Wheat Outlook in Parts of Europe

ASIA:  Snow in China Corn Areas; Showers in Malaysia

WEEK 1 Forecast Total

WEEK 1 Forecast Total


CBOT  soybeans  for Jan. -0.4% to $8.48 3/4 a bushel by 3:35pm in London

Soybean meal  for Dec. -0.3% to $307.30 per 2,000 lbs

Soybean oil  for Dec. -0.2% to 27.84c/lb

Corn  -0.5% to $3.64 3/4 a bushel

Milling wheat  -0.6% to EU199.25 a ton in Paris

(Bloomberg) — Soybean futures fall to the lowest in five weeks on signs that demand remains muted in China, the world’s top buyer, amid persistent trade friction with the U.S. Aggregate trading for this time rises 40% above the 100-day average, according to data compiled by Bloomberg.

The Bloomberg Agriculture Subindex of nine prices drops to a four-week low with most components posting a decline. The gauge is down 10% this year.




Overhang May Mark Long-Term Bottom: BI “Conditions are ripe for lower 2018 prices marking a longer-term bottom in soybeans” “They are at the epicenter of U.S.-China trade tension and have been pressured by an unprecedented increase in Corn Belt production and a slumping Brazilian real”


With U.S. Soybeans Changes Course From  China  to Vietnam A ship carrying U.S. soybeans changed destination from China to Vietnam as exporters find new buyers for American supplies amid an escalating trade war.

Ship With U.S. Soybeans Changes Course From China to Vietnam


Soybean  futures for January delivery fall as much as 0.5% to $8.47 3/4 a bushel on the Chicago Board of Trade, the contract’s lowest since Sept. 20 The price on Monday dropped 0.6%

Market talk

“The trade situation with China remains uncertain as another round of tariffs is being discussed for implantation in December,” MaxYield Cooperative in West Bend, Iowa, says in a report “This comes as China has announced it will reduce protein levels in hog and poultry feed” to shift use away soybeans “U.S. soybean values delivered to China are 22% lower than Brazil, even with the 25% tariff added in”.

Image result for soft commodities goldman sachs

(Bloomberg) — Raw sugar falls for the fourth straight session as traders book profit following an October surge spurred by the Brazilian real’s rally.

Coffee caps the biggest three-day slump in 16 months, and cotton drops.

The Bloomberg Softs Subindex with those three commodities slumps as much as 1.4% on Tuesday to a two-week low.

The gauge has declined 15% this year amid global surpluses for coffee and sugar.

Other softs

Arabica-coffee futures for December delivery fall 1.6% to $1.124/lb In three sessions, the price tumbles 7.2%, the most since June 2017.

Cotton futures for December delivery drop 0.3% to 76.9c/lb.


The real is little changed on Tuesday after weakening as much as 2.2% on Monday

NOTE: Datagro More Than Doubles Estimate for 2018-19 Global Deficit

NOTE: India’s Sugar Production, Exports Seen Increasing, USDA FAS Says


Raw sugar for March delivery falls 1.3% to settle at 13.32c/lb on ICE Futures U.S. in N.Y. after touching 13.17c, the lowest for a most-active contract since Oct. 15 The four-session slump was the longest since Aug. 1  This month, the price has jumped 19%, the most since 2015

Market talk

“Profit-taking following the massive price rise since the start of the month and the weaker Brazilian real are likely to have been the main reasons” for sugar’s decline, Commerzbank says in a report

NOTE : Indian Sugar Mills Extend Gains After ISMA Cuts Output Forecast


Screen Shot 2018-08-04 at 9.11.59 PM.png

(Bloomberg) — Issuers lit up the U.S. investment-grade primary bond market this morning, taking advantage of a more upbeat macro tone.

  • Six domestic high-grade borrowers came forward today versus five that issued on Monday
    • Tool maker Stanley Black & Decker is among those, marketing deal in two parts after meeting with bond investors yesterday
  • The week is shaping up to be busier than last as $3.5b priced Monday and $15b-$20b is expected in total
  • High-grade credit index held again yesterday after a steady streak of widening through this month


  • Stanley Black & Decker Inc. (SWK) $Benchmark 10Y, 30Y
  • Corning Inc. (GLW) $Benchmark 30Y, 50Y
  • Eastman Chemical Co. (EMN) $800m WNG 3Y, 10Y
  • Ryder System Inc. (R) $300m WNG 5Y
  • Cleveland Electric Illuminating Co./The (FE) $300m WNG 12Y
  • TD Ameritrade Holding Corp. (AMTD) $Benchmark 3Y FRN, 5Y


  • Oesterreichische Kontrollbank AG (OKB) $1b WNG 5Y
  • Empresa Nacional del Petróleo (ENAP) $Benchmark 10Y Avg Life Sr Unsec
  • BNG Bank NV (BNG) $500m WNG 3Y Sustainability Bond
  • Svensk Exportkredit AB (SEK) $1b WNG 3Y


  • Whirlpool slated to hold calls today and Duke Energy Carolinas conducts calls Wednesday


Screen Shot 2018-08-05 at 4.29.47 PM

(Bloomberg) — A grinding rally over the U.S. session failed to see Treasuries unwind an Asia selloff, leaving yields cheaper by 1.9bp to 2.9bp across the curve; a choppy day for stocks helped underpin USTs into the settlement, while USD/JPY gained and dollar index climbed on the back of a weaker U.K. pound.

  • UST 10-year yields cheapened by ~2.3bp at 3.11% and ended close to the middle of a 3.081%-3.121% daily range; the long end led losses, steepening 5s30s curve by a further 0.7bp and topping at ~42bp, the widest level since April 9
  • Most gains over U.S. session were seen during the morning, where Treasuries rallied as S&P e-minis threatened to break through Asia session lows ahead of the cash equities open
    • During the morning advance, domestic real money was seen buying belly of the curve
  • Most Treasuries losses occurred during the Asia session after U.S. President Trump’s comments on trade with China lifted risk sentiment
  • Eurodollar options flow included upside via 30k EDF9 97.125/97.25/97.375 1x3x2 call fly at 1 tick; meanwhile, Treasury options flow included upside via ~14k TYZ8 121 calls, paying 4 ticks

-R.W.N II, yours in 322.

Charlotte NC - Founders Hall lobby with frescos by world famous artist Ben Long
Charlotte NC – Founders Hall lobby with frescos by world famous artist Ben Long

Banyan Capital Management, LLC (“BCM”) is a publisher, not a registered investment advisor, and nothing in BCM’s newsletter is intended, and it should not be construed, to be investment advice. BCM’s newsletter is for informational use only. Any mention in BCM’s newsletter of a particular security, index, derivative, or other instrument is neither a recommendation by BCM to buy, sell, or hold that security, index, derivative, or other instrument, nor does it constitute an opinion of BCM (or of any of its officers, employees, agents or representatives) as to the suitability of that security, index, derivative or other instrument for any particular purpose. BCM is not in the business of giving investment advice or advice regarding the suitability for any purpose of any security, index, derivative, other instrument or trading strategy and nothing in BCM’s newsletter should be so used or relied upon. BCM is not acting as your financial advisor nor in a fiduciary capacity, with regard to any securities, index, derivative or other instrument referred to in BCM’s newsletter. Also, no representation is made concerning the tax implications in any applicable jurisdiction regarding any securities, index, derivative or other instrument and BCM is not advising you in respect of the tax implications. All opinions and estimates in the newsletters are given as of the date of their publication on the BCM’s website and are subject to change and BCM does not assume any obligation to update the newsletters or to reference any such changes. BCM hereby expressly disclaims any and all representations and warranties that: (a) the content of its newsletters is correct, accurate, complete, reliable or a guaranty of future performance; (b) any of its newsletters will be available at any particular time or place, or in any particular medium; and (c) that any omission or error in any of its newsletters will be corrected. BCM shall not be liable for any errors or omissions made in its newsletters or for any inaccuracies in its assumptions. BCM specifically disclaims liability for any losses or damages (incidental, consequential or otherwise) that may arise from the newsletters and that are either used or relied upon by anyone for any reason, including without limitation, the use of the newsletters in the preparation of any financial books and records. Although from time to time BCM’s newsletter may link to or promote others’ websites or services, BCM is not responsible for and does not control those websites or services. BCM’s newsletter is published and distributed in accordance with applicable United States and foreign copyright and other laws. Without the prior written consent of BCM, no person or entity, directly or indirectly, may copy, reproduce, recompile, decompile, disassemble, reverse engineer, distribute, publish, display, perform, modify, upload to create derivative works from, transmit, or in any way exploit all or any part of BCM’s website, its newsletter, or any other material belonging to BCM.Without the prior written consent of BCM, no person or entity, directly or indirectly, may offer all or any part of BCM’s website, its newsletter, or any other material belonging to BCM for sale, nor may any person or entity, directly or indirectly, distribute all or any part of BCM’s website, its newsletter, or any other material belonging to BCM over or by means of any medium.Without the prior written consent of BCM, no person or entity, directly or indirectly, may make all or any part of BCM’s website, its newsletter, or any other material belonging to BCM, available as part of or in connection with another website, whether by hyperlink, framing on the Internet or otherwise. At any given time BCM’s principals may or may not have a financial interest in any or all of the securities and instruments discussed herein. At any given time BCM’s principals may or may not have a financial interest in any or all of the securities and instruments discussed herein.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.