Highlights
No bank failures yesterday; no rumors of bank failures and commodities had a good day. That confirms the sell-off from the day Silicon Valley Bank (SVB) failed on the 10th of this month until last Thursday was 95% fear of a banking system collapse and 5% due to all other news.
However, late last evening, rumors were the Charles Schwab brokerage and investment firm is having some financial woes. After the stock lost 25% of its value the past two months, their balance sheet for this quarter shows unrealized losses (open trade positions) on long-term bonds ballooned to more than $29 billion last year. That is what happened at SVB.
If you buy soybeans in the futures market and the price goes down but you do not liquidate the position, you have an unrealized loss. The instant you liquidate the futures position at a loss, you have a realized loss. If you have a profit in the futures position, it is an unrealized gain until you liquidate the position at a profit, then the profit becomes realized gain.
So, Charles Schwab is at the top of the watch list today.
Wayne Bacon, the most experienced grain guy still involved in the world grain markets and the supplier of our weekly export FOB prices and ocean freight rates, reported it is “official” that the Ukraine grain export corridor agreement was only renewed for 60 days. That is bullish corn and wheat as there is a lot that can go wrong with shipping schedules and Russia’s demand for deal modifications after a 60 day deal versus 120 day deal.