Katie Geerdes

There should be more appreciation of the phenomenal run on corn exports this season, but the lingering question is whether the surprising growth of export demand is a product of corn prices having been undervalued. By saying corn export demand is 'surprising,' that is partly referring to comparison with USDA estimates that have once again been lagging reality, although the earlier projections may have originally been a driving factor for lower corn prices in the first place. Record corn exports again coincide with a period of doubt about Chinese demand for U.S. crops. The last time corn exports were close to this strong was 2020/2021, which not only marked the last major crop price lows, but also the last time there were debates about a new U.S.-China trade deal.   This week was notable for having the export inspections report show corn shipments down to a marketing year low, and they were still very strong, but actually lower than soybean inspections. We have long talked about how this year was going to be a switch for the U.S. corn and soybean export programs because we did not have the Chinese soybean demand already pre-booked for fall, but we were more…

Part 2 of 2 Canadians are thinking that they are independent and I am less convinced that will be successful in remaining independent until enduring a lot more pain first. Canadians are an optimistic lot telling each other how they are winning this confrontation with us but are only trying to bolster their own confidence. The engagement is just beginning. They are shifting their alliances to Europe and opening to China which is just going to make Trump irater so look for more retribution. Commerce Secretary Lutnick says that Canadas trade deal with China will open the door to the demise of the USMCA. The negotiation has begun even though direct talks have broken off. Canada knew that was coming regardless. Essentially, a close Canadian arrangement with China would violate president Trumps perception of the Monroe Doctrine. I think that he will try to boil Canada awhile before he tries to eat them. I think that prospects are very remote that Canada becomes another US state. If wrong, they are more likely to become our 53rd state in order behind Venezuela and Greenland. Or maybe Argentina will be the 53rd and Canada the 54th? That would average one new territory…

Part 1 of 2   President Trump is taking the Monroe Doctrine thing to another level. His hemispheric foreign policy is actually a combination of Manifest Destiny and the Monroe Doctrine that when combined becomes the Donroe Doctrine. The Monroe Doctrine essentially is that other global powers should stay out of our “yard.” Manifest Destiny meant when we took anything, we thought should be owned by us on this continent, making it part of our “yard.” Most Americans support the Doctrine and the Destiny. Our “yard” is defined as this hemisphere. Is Greenland part of our “yard”? Sure, it is, as the tectonic fault line is in Iceland. I was there once. He wants Russia and China out of our hemisphere which is a very good thing but has no intention of reciprocating. The one thing that we have that they don’t is a blue-water navy. You can buy and maintain one of those for $257 bln annually which no one else in the world can remotely afford. Most countries spend on their entire militaries just what we do funding ICE. That is just the current sunk cost to maintain our Navy as DJT plans a 50% increase in overall…

I advised that subscribers start turtling up over a year ago. If you don’t know who Ray Dalio is then google him up or check him out on you-tube.  Ray Dalio a well-known billionaire economic commentator who doesn’t act like a billionaire. He came out with some specific advice as to how he thinks that we should turtle up. He begins with the premise that long term economic cycles are converging for a major financial reset that rhymes with the 1930’s. He lays out a format where there are 8 stages that a debt cycle goes through and we are in number 7. Number 8 will feel like we stepped into an elevator shaft. He says that we have 6-12 months to position and should do 4 things.   Dalio’s first piece of advice was to buy gold and silver. I bought physical as well as ETFs in gold and silver some time ago and then remained inactive holding through the entire rally until adding to my gold ETF last Friday. Dalio wants to own physical silver and not ETFs (I own both). He makes a good argument to own the physical commodity. I also own a platinum ETF. Having…

Xi Jinping is executing (no pun intended) another purge of top leadership in China. This is not the first time that he has cleaned house and is why he has a tight grip on the power centers. This time he has swept out the top military general, reportedly sacking him along with all but one other general in their equivalent joint Chiefs of Staff. Xi now heads the party and the PLA. Probably do not have to worry about them invading Taiwan for a few days at least. Maybe Taiwan should invade China? They always use “corruption’ as the excuse, but I expect that loyalty matter more than if you take money on the side there. Xi Jinping commands loyalty and heads roll over it. Someone who does too well and gets a power base becomes a threat to Xi. What was interesting though is that this purge goes further than the military. Someone who is a “friend of this report” who has done business with COFCO, the state-owned Ag enterprise, says that who they did business there with “was in jail”. They do not just fire them…they jail them. So, the purge could even impact Ag. China bought the…

This week's average daily trading range for silver futures has been more than $18 per ounce, or $90,000 per contract. Volatility readings skyrocketed for silver, rivaled only by the massive swings for natural gas futures, with their February contract expiring on Wednesday after surging 240 percent over the previous seven sessions. More tame but still also on the rise were volatility levels in the stock market. Volatility index futures for the S&P 500 made contract lows earlier this month and have risen more than 20 percent since then. Stock traders see nervousness expressed in the dollar index, which was volatile enough to gap lower at the start of the week. Crude oil futures have recorded their highest volatility since last summer when the market dropped to $55 and then shot up to $78.   While many markets have had unprecedented doses of volatility this week, the grain and livestock trades were quiet by comparison. The January crop report rout boosted grain futures volatility ever so slightly, but price movements compressed again so that corn traded within a weekly range of less than 10 cents and soybeans less than 20. Livestock options similarly show subdued volatility expectations even after hogs have…

Morning Market Talk Below, you will find today's installment of Morning Market Talk. You can copy and paste the link below for this morning's episode.   https://youtu.be/8F_oPKKsBiw?si=RRrviZYwU2w87YQF   On the Grains   Corn and soybeans are under pressure early this morning, while the wheat markets are also starting to weaken. Wheat futures are still working on weekly gains, led by SRW contracts, while soybeans are near unchanged for the week and corn is lower.   Grain and soy markets are quiet compared to the sharp drop in gold and silver overnight, which were in part pressured by a firmer dollar as President Trump plans to nominate Kevin Warsh as his choice for next Fed chair. Warsh, who served on the Fed's Board of Governors from 2006 to 2011 and has advised Trump on economic policy, would still need Senate confirmation after being selected by Trump.   The dollar firmed overnight amid speculation Warsh may be less enthusiastic to cut rates than other candidates given his past warnings of inflation risks and more recent calls for the Fed to reduce its balance sheet. However, he has more recently echoed Trump's criticism of the Fed for being too slow to ease monetary…

What is ethane? If you guessed that it was an industrial hydrocarbon gas you would be right. More specifically, it is the feedstock from which ethylene is produced. Ethylene is an ingredient used in the manufacturing of many industrial products… plastics (polyethylene, PVC, polystyrene), antifreeze (ethylene glycol), textiles (polyester), detergents, solvents, and packaging materials like foam insulation, as well as in agriculture to ripen fruits. It's the world's most produced organic compound, essential for creating products like plastic bags, pipes, medical devices, tires, and even as a sterilizing agent for food and medical supplies. China imports a lot of it…80% of its industrial needs.  The US was the largest producer of ethane and by far the dominant exporter of ethane to China. Used to be that is. Past tense.   President Trump mistook ethane for having “rare earth mineral-like” leverage in trade with China. We had it…they needed it…sort of thing. All true. However, unlike rare earth minerals, which China controls via having 90% of global processing, there are alternative suppliers of ethane China could get what they needed from. Last May the US placed export licensing requirements on US ethane exports going to China and stopped two ships carrying ethane…

I made the paper (Des Moines Register) recently and it was not for being arrested or showing up in the obituaries. I did participate in a demonstration, so to speak, at the Iowa State Capitol.  I joined ethanol and CO2 pipeline supporters who were lobbying against an Iowa House Bill that would bar use of eminent domain for virtually anything. That was overkill. It was no surprise that the bill passed in the House, however it is not going further from there and is like the bill that Governor Reynolds vetoed last session. There was a strong show of opposition from the ethanol industry to the bill personified in the group I joined at the capital. House members who voted for this bill should not receive the endorsement of the Iowa Corn Growers Association or Iowa Farm Bureau Federation next election. Last fall I traveled to Washington DC with a Carbon Board group who lobbied for 45Z. I had never participated in lobbying the Iowa legislature before. I wanted the experience.   The Iowa Legislature is dealing with eminent domain. There is at least one in every bushel so you will not be able to plan a route for a…

New metal price highs were being recorded once again to close the week. Gold, silver, platinum, and copper seem to have bullish inputs from all sides considering the flows of buying interest coming from central banks, institutional funds and swap dealers, private wealth offices, retail traders and commercial end users. Metal bulls have their reasons, whether it is a long play based on inflation and currency expectations, safe-haven demand driven from geopolitical tension, industrial rationing for use in hot-topic applications like electric vehicles and artificial intelligence, or for speculative gaming around short squeezes and the physical delivery market. Traders are left to weigh long-term metal price expectations against the potential for extreme volatility in the short-run, projecting not only how high metal prices could reach, but also how far prices could fall while still remaining within the current cycle.   The CME just this month changed its silver margin rates to a higher floating percentage set at 9 percent. Notional value of the 5,000 ounce silver contract trading at $100 per ounce is $500,000, which will factor into a minimum silver futures margin requirement near $45,000 and higher based on individual risk assessments. Since the start of the month, the…