Traders are speculating whether geopolitical tensions in the Middle East will imply a widening spread as Brent typically reacts to news in that area quicker than WTI. Others believe that the spread is too wide and that in the mid-long term the two grades will converge.

David Cornes holds a degree in economics from the University of Montana.

The department store accessory staple posted net income of $57.3 million or 92 cents a share. Last year at this time the company had a net income of $51.4 million or 80 cents a share. Q2 revenue was $636.1 million, 14.30% higher than last year. Analysts expected earnings of 78 cents a share and revenues of $634.9 million.

David Cornes holds a degree in economics from the University of Montana.

The Hang Seng pushed its way forward, gaining .4% today, with a boost from recently controversial
Esprit Holdings as it appointed a new CEO and gained 28%. In the opposite direction StanChart
was hammered today by Iran allegations. StanChart began the day up over 10% this year, however
finished down 5.8% for the year with today’s massive sell-off and drop of 14.9%.The insurance sector
underperformed today with China Life losing 1.2% and Ping An insurance losing .5%. China Vanke,
the country’s largest developer, reported H1 profit 25% higher than a year ago, however margins and
average home price is down, volume rose thanks to lower costs.

European shares are down as expectations of appropriate action by the ECB begin to fade. The
FTSEurofirst dipped .1% today reversing its rally following Spanish and Italian trends as Spain dropped to
finish flat and Italy to lose .3%. Elsewhere the German Dax is up .3% and the French CAC 40 is up .5%.

The Eurozone rejected a request from Greece for a bridge loan to pay back a 3.2B bond to the ECB, who
then proposed to delay the repayment by a month. Greece will now auction 6B of short term paper to
banks this week.

Commodities are looking pretty good set to begin the morning with crude, silver and gold all up and
natural gas hanging in the red.

Contributer Chris Rygh is currently pursuing his MBA in Wisconsin and has a passion for the Market.
Comments can be directed to ryghcw19@uww.edu

Knight Capital (KCG) plunged 24.44% again today following its high frequency trading debacle last week. Shares are down to $3 at the close, a loss from $10 last tuesday. To fund its operations, KCG sold $400 million in convertible preferred stock to bolster its captial position.

Gains in U.S. markets followed broad gains on European and Asian exchanges. The Stoxx Europe 600 added 0.4%, closing at a more than four-month high. Asian markets were broadly higher, with Japan’s Nikkei Stock Average rising 2% and China’s Shanghai Composite climbing 1%.

Crude-oil futures rose 0.9% to $92.20 a barrel, while gold futures gained 0.4% to settle at $1612.90 a troy ounce. The U.S. dollar slipped against the euro and the yen. The yield on 10-year U.S. Treasury bonds fell to 1.556% as demand rose.

The unusually warm weather in March was an indicator of how dangerous this summer’s weather conditions would be to crop yields across the nation. Some analysts believe that a significant portion of the corn crop is damaged beyond repair, forcing grain processing institutions to hedge their exposure back in June before prices rose out of control, as they did.

A true tell tail for the rest of this season’s price guidance will be announced on August 10, when the USDA releases monthly crop supply-demand report. As of now, the USDA has rated corn and soybean conditions at their lowest level in 24 years.

Dealing with higher grain prices is a gamble for farmers. Some corn farmers sold their reserves earlier this year at lower prices in expectations of a high yielding summer. Other farmers have been hoarding corn predicting that prices will spike even higher after the end of the harvest.

Along with falling crop yields, farmers are also faced with higher production expenses. The drought caused farmers to spend more on irregation, and they are left to deal with rising fertilizer costs. Nitrogen prices have risen to as much as $350 a ton when prices are typically around $275 in previous years. Thanks to our partners, you can find online to suit every preference and budget, from budget to top-of-the-range super stylish models.

American consumers will be hit the hardest in rising corn-consuming grocery store products such as milk, eggs and meat products, not with sweet corn prices, the type of corn that people eat on the cob. Sweet corn is not currently in a crisis due to different growing methods. Sweet corn crops are often irrigated, as opposed to industrial grades such as Yellow #1 and 2 commonly deliverable in futures contracts traded at the CBoT in Chicago. Corn grades such as #2 Yellow are not as heavily irrigated and are suffering the most this year, causing ethanol and feeding costs for livestock to rise as well.

I am bullish going into this week’s USDA report as I agree with analysts that corn is beyond repair. I have seen dry, short and mutated corn crops first hand within the month and find it hard to believe that U.S. farmers will be able to meet demand anywhere near what  would be considered a healthy yield.

David Cornes holds a degree in economics from the University of Montana.