June 28 - Stocks were mixed at midday, as traders digested comments coming from a seminar hosting central bankers in Europe today that sounded a hawkish tone, but that was generally expected. The VIX continues to trade near 13 at this hour. The dollar index is trading higher near 103.0 as the euro loses value. Yields on 10-year Treasuries are trading near 3.73%, while yields on 2-year Treasuries are trading near 4.73%. Crude oil prices are bouncing back after holding at key support levels on the charts - currently 2% higher. The grain and oilseed sector again sees heavy losses as weather forecasts increasingly look wet over the next two weeks for central and southern portions of the main Ag belt. That's subject to change with the next weather model run if it flips, or if the rains fail to verify. But thus far, the odds are increasing that we will see soaking rains across central and southern portions of the Midwest Corn Belt in the days ahead, with follow-through rains coming in July as well.
Another rate hike in July by the European Central Bank is likely, according to ECB president Christine Lagarde, while Federal Reserve Chair Jerome Powell stated that he could not rule out consecutive rate hikes at future meetings. The comments came out of an annual gathering of central bankers in Portugal earlier today, as the central bankers tried to communicate a united front to confront inflation. Powell particularly pointed out the labor market, which remains tight, supporting wage inflation. Bank of England Governor Andrew Bailey also commented, stating that its recent 50-point rate hike reflected a resilient economy and persistent inflation. It currently has the highest benchmark interest rate among the Group of Seven nations, but he stated that they will continue to do "what is necessary."
The State Street investor confidence index rose to 95.8 this month, up from 89.7 the previous month. The index is a measure of investor confidence in the markets, as measured by changes in investor holdings of equities. Specifically, State Street's index for North America rose 4.9 points this month to 90.0, while the European index rose 5.0 points to 104.9. However, the Asian investor confidence index fell 4.3 points in June to 96.7. This suggests that investors have increasing levels of confidence in the economy and in the markets in both Europe and in North America, although concerns remain, but investors are losing confidence in Asia currently, with much of that focused on concerns about China's economy. An index of 100 is considered a level of neutrality.
U.S. commercial crude oil stocks (excluding the Strategic Petroleum Reserve) fell by 9.6 million to 453.7 million barrels in the week ending June 23, putting them roughly 1% below levels typically seen during this week of the year. Gasoline stocks rose by 0.6 million barrels, leaving them about 7% below seasonal levels. Distillate stocks increased by 0.1 million barrels during the week, putting them 14% below the five-year average for the week. Ethanol stocks rose to 23.0 million barrels in the week ending June 23, up from 22.8 million barrels the previous week, and up from 22.7 million barrels in the same week last year. Ethanol production was unchanged on the week at 1,052K barrels per day, which was up only slightly from 1,051K bpd in the same week last year. Estimated corn use for the production of ethanol totaled 103.5 million bushels, which matched usage the previous week, and it matched usage in the same week last year as well. Estimated marketing year to date corn use for ethanol totals 4.169 billion bushels, which is down 188 million bushels, or 4.3%, from the previous year's pace, and it is down 45 million bushels from the seasonal pace needed to hit USDA's target for the year.
