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It would appear that the growing chorus of voices and a few well-placed ads over the weekend, concerning the disastrous situation in the livestock and livestock processing industry, grew loud enough to reach Washington. Yesterday President Trump issued an executive order via the Defense Production Act to mandate the plants to open and continue to operate. “Such closures threaten the continued functioning of the national meat and poultry supply chain, undermining critical infrastructure during the national emergency.”  Along with providing a little more incentive to get plants operational, what this move does is provide companies like Smithfield, JBS, Tyson, and Cargill an extra layer of liability protection against health claims and it is recommended you read this before proceedding to next step.  I do understand that while some of these plants have been idled, additional measures have been put into place, such as dividers between workstations, protective face gear, and taking the temperature of employees when they arrive at work.  Ideally, that will be happening at more facilities, as trying to help keep employees healthy, should pay dividends for all concerned.  I did not see any mention of providing additional help and relief to the farm sector, as I do not believe any of this had been anticipated when the original package was announced, but maybe that comes later.  Do you think it would be beneficial to run a few full-page ads in major publications?

The weather situation in Argentina has done an about-face over the last few days as rains have arrived, and in some areas, it has been too much of a good thing.  Many rural roads are impassable, and corn and bean harvest have been brought to a standstill.  While harvest may be put on hold, the moisture should provide welcome relief for soils that have been quite parched for over a month and set the stage for the planting of winter wheat.

The action in the grain and soy markets should have left no doubt that bears still control the reins, but that said, they are not making a lot of forward progress.  Wheat is still in a defensive mood this morning, but corn and beans appear to have stabilized at last week’s lows.  With the first notice day and end of the month arriving tomorrow, it is difficult to imagine a bit swing in either direction, and we should see more and more emphasis placed on weather and weather outlooks in the weeks ahead.  Up until this point, the focus has been on demand destruction.

I do not want to try and jump the gun, but we could be witnessing signs of stabilization over in the energy sector.  With all the excitement of the negative session behind us, for now, at least, prices have moved into a sideways pattern, and technical indicators are close to turning positive once again.  Realistically, the West Texas futures will need to push up and close above 18.25 to be able to say with any level of confidence that we have established a low. As I mentioned last week, significant bottoms (or tops) will often occur with record-setting anomalies, and a $40 negative price for crude oil has to fit that definition.

We have had a spate of economic releases this morning.  Advanced GDP for the first quarter of this year came in at a – 4.8%. This is nearly a 7% slide from the fourth quarter and will be the first in negative territory since 2009.  Economists were expecting – 3.5%.  Advance Real Final Sales registered – 4.3%, a 7.4% swing lower from the last quarter, and Advanced Personal Consumption has swung from +1.8% in the last quarter to -7.6% in this. The advanced PCE Price Index remained positive with a reading of 1.3%.  While certainly not unexpected, the numbers were by no mean encouraging, but as is their habit, equity market sees the glass half full and have pushed higher again this morning.