Most weeks, it seems we are confronted with a dearth of fresh ag news on Wednesday, but it would seem that was reserved for Thursday this week, especially since the weekly export sales have been pushed back a day. Some might argue that Uncle Sam gave us more than enough to digest on the Tuesday report anyway, and markets continue to grapple with the potential ramifications of those reports. Two days out, one can assume that we have made most of the price adjustments to the figures we know about. It will be the unknowns, such as South American weather and moves by China, that will determine the next swing.
There was one interesting story from the ag world overnight, which concerns Louis-Dreyfus Company. Here is a little background for those of you who have not kept abreast of the goings-on with this company during the past few years. This company was founded in 1851 and, since that date, had been controlled and managed by the Louis-Dreyfus family. In 2009, Robert Louis Dreyfus, who was CEO of the firm, passed away, leaving his interest and control to his wife, Margarita. Since that time, she has spent nearly $1 billion buying out other family members, which increased her control to around 96%. In the process, though, it has left the company cash strapped, which has been exacerbated by the difficult ag environment over the past few years. Against that backdrop, it was announced yesterday that for the first time in this companies 169-year history, shares would be sold to a non-family member. A 45% stake has purchased by the Abu Dhabi sovereign wealth fund. No doubt, this sale will place LDC in a much better financial position as an ag powerhouse in the 21st century, but there is also a tinge of sadness to see one more of the “original” grain firms transform this way.
While it realistically goes without saying, 2020 has been a challenging year for people and businesses outside of the tech world at least, and energies have suffered as much as any. After the disastrous collapse back in the spring, crude oil did recover enough to reach back against what had been support, but has done little more than track sideways now for the past five months. During the past week or so, this market has found a little renewed interest, no doubt at least partially spurred on by the news of the Covid vaccine, but according to a report just compiled by Opec’s research arm, the optimism may be premature. While they do expect global crude demand to grow by 6.3 million barrels per day next year, that estimate is 300,000 barrels per day lower than they estimated just a month ago. The cartel meets again at the end of this month to discuss plans concerning future production levels.
