Economic May News

According to the latest reports, job openings hit new record levels in March, in contrast to belief in market that labor market is tightening. Wholesale inventories grew in March, but fell below forecast. Producer price index rose in April, but was also below expectations. Inflation remains in check for now, but if the withdrawal from Iran deal rises oil prices longer term, it could be a game changer. 10-year Treasury yield was over 3%, while 2-year met 2008 high. European companies are now assessing a path forward in Iran now that U.S. sanctions could become a factor
Stock index futures higher for an 8th consecutive day; Mon’s strength tied to reports that Foreign Ministry spokesman said China is willing to work with the U.S. for a positive outcome in trade negotiation talks in Washington May 15-19th; USD lower, only ~1% below LW’s highs. Hopes for a trade deal between the U.S. and China supporting soybean futures in early trade; President Trump’s surprising big change on sanctions against Chinese telecom ZTE Corp. is seen as easing trade tensions as Chinese delegation heads to US for talks that start tomorrow
Improved rain outlook for Southern Plains weighing on wheat; Corn caught in the middle. Trade looking for corn planting of 55-60% this afternoon versus avg. of around 63%; Bean planting expected to be 30-32% completed (26% avg.); and spring wheat around 50% (75%)
Weather leans negative with a more active late May Midwest rain system providing timely precip for recently planted crops; US HRW belt slated for 70% 5 day precip coverage, while S Brazil rains forecast to arrive this week
A gradually warmer pattern is taking over, and will see temperatures widely exceeding the seasonal climb in normal in the weeks ahead. With increasing sun angle, normal temperatures are going up fast across all of the US right now and through the balance of this month into next month as well. The forecast for the next couple of weeks argues for much of the US to see temperatures that outpace the normal climb, meaning some at least occasional near summer like temperatures. The Mid-Atlantic and some big cities in Texas both recently received their first 90s of the year, and it is a certainty that more are on the way, and again on the way sooner than normal, especially in the Mid-Atlantic States. As the map below says quite clearly, most of the US will be warmer than the rising normals next week, with widespread much above normal temperatures expected from northwest Texas through much of the Midwest, and at the least extending into the Southeast and Mid-Atlantic.