Stock Markets
Analysis-Bumper US corn harvest sinks prices, pushes global supply to surplus
© Reuters. FILE PHOTO: Corn is loaded into a truck to be transported for ethanol production in Kelley, Iowa, U.S., January 21, 2020. REUTERS/Shannon Stapleton/File Photo
By Mark Weinraub
MAPLE PARK, Illinois (Reuters) – After a dry spring threatened to wither the U.S. corn crop in the fields, farmers are harvesting what will likely be the country’s third-largest crop ever.
A bumper harvest will strain storage capacity and hold down prices of the world’s most traded commodity crop. This will benefit customers who will pay less for corn used to feed livestock, dairy cows and egg-laying chickens or to make ethanol biofuel. But it will squeeze profits for farmers, who will store corn and hope for new demand from exports or new domestic uses.
“At the end of June, I wasn’t even sure it would make a crop,” said Steve Pitstick, who farms nearly 5,000 acres just outside the Chicago suburbs in northern Illinois, where harvested fields stood next to crops ready to be cut.
“But the timing of the rain, better genetics and better planting equipment set us up for success,” Pitstick said during a rain delay in his harvest after more than two straight weeks of work. “It is surprisingly good.”
When the combines have finished the harvest and all the corn has been delivered for customer and exporter needs, the corn left in storage should exceed the amount that has sat in U.S. silos for seven years, according to the U.S. Agriculture Department (USDA).
There could be 50% more corn in storage when the harvest starts in 2024 than when it started this year, the biggest single-year jump in supplies in nearly two decades. That bounty should further pressure the international corn price in Chicago.
Already corn prices are trending near three-year lows at a time when some food prices are rising due to tight supplies of other staples like rice, stoking inflation worries.
Top exporter Brazil also grew a record amount of corn, and the global corn market, tight for years, now stands on the verge of a change in fundamentals to surplus for the first time since before the pandemic.
Just 16 months ago corn prices were at their highest in a decade as the war in Ukraine disrupted supplies from the Black Sea breadbasket.
“I think we are kind of in a headwind for corn for a couple of years,” said Stephen Nicholson, global strategist for grains and oilseeds at Rabobank.
Corn is the world’s single biggest grain crop, and a surplus can quickly change the market tone to bearish for wheat, soy and other major crops.
USDA forecast that domestic corn supplies would jump 55% to 2.111 billion bushels in the 2023/24 marketing year, helping push the global stockpile to a five-year high by September 2024.
Corn buyers will benefit. The U.S. chicken industry will spend less on corn for poultry feed after years of poor margins and closing plants.
“I’m optimistic that the feed costs are going to be more manageable going forward,” said Bill Roenigk, a consultant to the chicken industry.
Cal-Maine Foods (NASDAQ:), the biggest U.S. egg producer, said its costs for feed per dozen eggs produced fell 10.5% in the quarter ended Sept. 2, primarily because of lower corn prices.
STORING GRAIN
But lower prices have dented incomes for corn farmers. Those with space in their grain silos will refrain from selling at a loss this fall and instead store the corn, hoping prices rise. Some may switch to planting more soybeans next spring.
Pitstick, who devotes about half his acreage to corn, said he plans to store all the grain he has not already committed to sell. In the past 10 years, he has tripled his storage capacity to about 500,000 bushels.
“You have only got one chance to grow a good crop but many opportunities to market it,” he said.
Still, rising interest rates make storing grain a more expensive and risky proposition. Some growers need to take out loans to fund their operations as they wait and hope corn prices will rise.
U.S. farmers also face high costs for the fuel and fertilizer needed to produce their corn. Net U.S. farm income is expected to fall 23% at the end of this year from last year’s record high.
Harold Wolle, president of the U.S.-based National Corn Growers, said that to use the surplus and keep farmers financially stable, it will be critical to boost exports, including tapping new markets, and grow ethanol demand with developments in the aviation fuel industry.
“As prices decrease, our margins get squeezed,” Wolle said. “It becomes harder and harder for farmers to have a profit margin when our prices get this low.”
Sterling Construction Company, Inc. (NASDAQ:) has reached an impressive milestone, with its stock price soaring to an all-time high of $137.93. This peak represents a significant achievement for the company, reflecting a robust performance and investor confidence. Over the past year, Sterling Construction has witnessed a remarkable 84.48% increase in its stock value, underscoring the company’s strong market presence and the positive reception of its strategic initiatives. Investors and market analysts alike are closely monitoring STRL’s progress, as it continues to build on its momentum in the construction sector.
In other recent news, Sterling Infrastructure, Inc. announced two key changes in its leadership. The company revealed the upcoming retirement of board member Charles R. Patton, effective from September 1, 2024. Patton, who has been a part of Sterling’s Board since 2013, will step down after over a decade of service, during which he contributed to the Corporate Governance & Nominating Committee and the Compensation Committee.
In parallel, Sterling Infrastructure named Dan Govin as its new Chief Operating Officer. Govin, who brings over three decades of experience in the energy infrastructure industry, is set to lead the company’s strategic and operational initiatives. His past roles include Regional President at Quanta Services (NYSE:) and Senior Vice President of Operations.
In related developments, Sterling Real Estate Trust, a North Dakota-based real estate investment trust, recently held its annual shareholders’ meeting. During the meeting, eight trustees were elected, including Gregory P. Hammes, Timothy L. Haugen, and Michelle L. Korsmo, among others. Additionally, the appointment of RSM US, LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024, was ratified by the shareholders. These are among the latest developments at Sterling Infrastructure, Inc. and Sterling Real Estate Trust.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
CRH (NYSE:) PLC, a global leader in building materials, has reached an all-time high, with its stock price soaring to $91.22. This significant milestone underscores the company’s robust performance and investor confidence in its growth trajectory. Over the past year, CRH has seen an impressive 66.73% increase in its stock value, reflecting strong market demand and the successful execution of its strategic initiatives. The company’s ability to achieve this record price level amidst a dynamic economic environment speaks volumes about its resilience and the positive outlook shared by its stakeholders.
In other recent news, CRH Plc has seen a series of positive developments. Stifel, a financial services firm, has increased its EBITDA projections for the company by 4% for the years 2024 and 2025, following a positive outlook on CRH’s earnings. This includes the expected contributions from the newly acquired Adbri, which is predicted to add an additional 1% and 2% to the EBITDA in 2024 and 2025, respectively.
In addition, Deutsche Bank has raised its price target for CRH, maintaining a Buy rating on the stock, following the company’s acquisition of a majority stake in Adbri. This move is anticipated to enhance CRH’s materials solutions offerings in Europe.
Furthermore, CRH has appointed Lauren Schulz as its new Chief Communications Officer, a move expected to enhance the company’s global communications strategy.
Additionally, CRH has filed a notification regarding transactions by persons discharging managerial responsibilities, providing transparency into the dealings of the company’s management.
Lastly, CRH has reported strong growth in adjusted EBITDA and margin for the second quarter of 2024, and has raised its full-year adjusted EBITDA guidance to a range of $6.82 billion to $7.02 billion. These recent developments demonstrate the company’s resilience and strategic approach in a competitive market.
InvestingPro Insights
The ascent of CRH PLC in the stock market is not just a reflection of past performance but also a beacon for future potential, as suggested by InvestingPro data and insights. With a market capitalization of $60.88 billion and a forward-looking P/E ratio of 17.69, CRH is positioned competitively within the Construction Materials industry. Its commitment to shareholder returns is evident through a consistent dividend growth, having raised its dividend for the last four years, and a dividend yield of 1.39% as of the last twelve months leading up to Q2 2024. These financial gestures indicate management’s confidence in the company’s profitability, which is further supported by a strong gross profit margin of 34.85%.
In addition to its financial health, CRH’s operational efficiency is highlighted by an EBITDA growth of 13.63% in the same period. Notably, analysts have revised their earnings upwards for the upcoming period, signaling potential for continued growth. For investors seeking more detailed analysis, there are additional InvestingPro Tips available, including insights into CRH’s share buyback strategy and its performance relative to industry peers. These tips, accessible through the InvestingPro platform, offer a comprehensive view of the company’s strengths and investment potential.
For those monitoring CRH’s trajectory, the stock is trading near its 52-week high, at 99.14% of its peak, with a previous close at $89.27. The company’s next earnings date is set for November 7, 2024, which will provide further clarity on its performance and outlook. With a fair value estimate of $101 by analysts and an InvestingPro fair value of $74.35, investors are presented with a nuanced picture of CRH’s valuation. As the market anticipates CRH’s next financial disclosures, the InvestingPro platform remains a valuable resource for real-time data and expert analysis.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
In a remarkable display of market confidence, Nelnet Inc (NYSE:) stock has achieved an all-time high, reaching a price level of $115.64. This milestone underscores a period of significant growth for the company, which has seen its stock value surge by 27.28% over the past year. Investors have rallied behind Nelnet’s strong performance, propelling the stock to new heights and reflecting optimism in the company’s future prospects. The all-time high represents not just a peak for the year but an unprecedented value in the company’s trading history, marking a momentous occasion for both Nelnet and its shareholders.
In other recent news, Nelnet Inc. has been under the spotlight following strong Q2 earnings and subsequent adjustments by TD Cowen. The firm increased Nelnet’s price target to $98.00, up from $96.00, while maintaining a Hold rating on the stock. This follows Nelnet’s Q2 2024 earnings report, which highlighted an EPS of $1.44, surpassing TD Cowen’s estimate of $1.33. The improved earnings were largely due to reduced operating expenses and a lower provision for losses. However, these gains were slightly offset by a decrease in fee income and a lower net interest income.
In recent developments, Nelnet disclosed its quarterly financial results to the Federal Deposit Insurance Corporation (FDIC). The report provides a snapshot of the financial health of Nelnet Bank, its wholly-owned subsidiary, and includes critical data such as assets, liabilities, and income. This commitment to transparency and regulatory compliance allows investors to gauge Nelnet’s financial stability and growth prospects.
Furthermore, Nelnet’s bank subsidiary, Nelnet Bank, also disclosed its quarterly financials. The report, known as the Call Report, is a significant indicator of the subsidiary’s contribution to Nelnet’s overall financial status. This routine disclosure aligns with the requirements of the Securities Exchange Act of 1934, providing a clear view of Nelnet Bank’s financial standing as of the last quarter.
InvestingPro Insights
In light of Nelnet Inc’s (NNI) recent achievement of an all-time high stock price, several InvestingPro Tips and real-time data points provide further context to the company’s financial health and market performance. Notably, Nelnet has demonstrated a robust track record by raising its dividend for 9 consecutive years and maintaining dividend payments for 18 consecutive years, which signals a strong commitment to shareholder returns. Additionally, analysts remain optimistic about the company’s profitability, expecting net income to grow this year.
From a data standpoint, Nelnet’s current market capitalization stands at $4.15 billion with a price-to-earnings (P/E) ratio of 26.88, which adjusts to a lower ratio of 22.02 when considering the last twelve months as of Q2 2024, reflecting a more favorable valuation for investors. The company’s revenue growth has been modest at 0.7% over the last twelve months, yet it experienced a more significant quarterly surge of 12.82% as of Q2 2024. Importantly, Nelnet’s stock is trading near its 52-week high, at 99.06% of this peak, and has seen a large price uptick of 31% over the last six months. These figures underscore the company’s strong market presence and potential for continued growth.
For those interested in deeper analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/NNI, which can provide investors with more nuanced insights into Nelnet’s performance and future outlook.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Forex2 years agoForex Today: the dollar is gaining strength amid gloomy sentiment at the start of the Fed’s week
- Forex2 years ago
How is the Australian dollar doing today?
- Forex2 years ago
Dollar to pound sterling exchange rate today: Pound plummeted to its lowest since 1985
- Forex2 years ago
Unbiased review of Pocket Option broker
- Cryptocurrency2 years ago
What happened in the crypto market – current events today
- World2 years ago
Why are modern video games an art form?
- Commodities2 years ago
Copper continues to fall in price on expectations of lower demand in China
- Stock Markets2 years ago
Morgan Stanley: bear market rally to continue
