Highlights, Announcements  by Mark O’Brien, Senior Broker

General: 

Forecasts for the U.S. economy continue to reduce the chances of recession – or if one arrives its lower severity – as readings for reports like the Consumer & Producer Price Indexes and Personal Consumption continue to show inflation is coming under control.  At the same time, fear has dissipated that the Federal Reserve’s interest rate policies will destabilize the business climate, particularly as it related to employment and hiring, albeit having cooled somewhat last month.  Signs indeed point to the FOMC taking more of a wait-and-see stance in its upcoming meetings than the sense of tenacity it shown in raising rates eleven consecutive times ending in May.  In the background, the U.S. dollar has drifted south giving exports a boost.

Agricultural: 

Orange Juice futures (basis Sept.) traded to new all-time highs this week on the heels of Tuesday’s USDA crop report showing the U.S. orange crop’s 23% decline from last year and the smallest since 1937.  As of this typing prices touched $2.9155 per pound intraday (contract size: 15,000 pounds).  This is a substantial 90-cent price increase for the year, including a ±40-cent/$6,000 per contract move up in price this month alone.

The extreme heat across parts of the U.S., including low triple-digit temperatures forecast in key soybean and corn production areas next week have further threatened this year’s already stressed crops.  In addition, grain supply disruptions related to the war in Ukraine are adding pressure on global grain supplies.  Soybean futures (basis August) remain near their contract highs close to $15.00 per bushel and corn futures (basis September) have climbed back above $5.50 per bushel intraday today and yesterday, half-way back to its mid-June highs near $6.25 per bushel.

Financial: 

What a run for stock index futures the last two weeks.  Prior to what looks like a meaningful down day today, the Dow Jones cash market had risen seven consecutive days – since Mon. July 10 – its longest winning streak since March 2021.  The Sept. YM futures contract made a similar move: up ±1450 points from its closing price of Friday July 7 to Wednesday’s intraday high.  That’s a $7,250 per contract move.  The ES made a similar ±8,500 per contract move and the NQ made an impressive ±$17,100 move.