It is good to be Gold(man)
It would appear that markets have decided it is time to build a bit more risk premium into the price of new crop corn. December futures have extended into higher highs once again overnight and have moved to within a dime of challenging the 2014 peak for that contract month at 5.17. Outside of temperature leaning a bit to the cool side as of late, there does not appear to be many areas of immediate concern for the majority of the Midwest, but these are “futures” markets, and when we already know there is little room for production error this summer, no one wants to be left sitting behind the proverbial eight ball.
Overall ag-related news is still a bit sparse this morning, but we have a couple of updates to look forward to tomorrow morning. First up will be the weekly export sales, which probably will not be stellar, and then later in the morning, the NOPA crush number for March will be published. The trade is looking for a figure of around 179.2 million bushels. If realized, this would be well above the February number of 155.16 million but still shy of the March 2020 record of 181.37.
It is a good time to be in the investment banking business, as long as you have not had Archegos Capital Management as a client, but that is another story. Two of the big names, Goldman Sachs and JP Morgan, have released first-quarter results this week, which appear to be nothing short of stellar. For the first three months of the year, Goldman has posted net earnings of $6.84 billion, which is a 464% improvement over the first quarter of 2020. Not to be outdone, JP Morgan posted earnings of $14.3 billion, which was nearly a five-fold increase over the first quarter of 2020. At first blush, some of you may be thinking that last year depressed due to the coronavirus, but keep in mind, the real impact from that did not truly hit the economy until after March. Fees from “investment banking” at Goldman were up 73%, while over at JP, they increased a paltry 57%. In case you are curious, shares for Goldman are up a bit over 1.5% today while JP Morgan is trading down a little more than 1.5%.
One final note from the financial world this morning. Bernie Madoff, the man who orchestrated the world’s largest Ponzi scheme has passed away in prison. It is estimated he defrauded his 4,800 clients out of around $64.8 billion. I suspect that more than a few of these people are polishing their dancing shoes for when they visit his grave.
Looking at the macros this morning, we find energies higher, metals lower, financial instruments lower, the dollar lower and yup, you guessed it, equities into higher highs again.
