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No Bull | The Five Spot

NO BULL - Mon Feb 26, 11:07AM CST

#5 | Moving & Shaking

Nvidia has been the primary beneficiary of the tech industry's recent obsession with large artificial intelligence models, which heavily rely on the company's expensive graphics processing units (GPUs). Nvidia's Q4 revenue was up 265% from Q3, thanks to its thriving AI business - helping its stock achieve the largest single-day market cap gain in history last week.

Nvidia holds a whopping 80% of global GPU market share and sits in the #3 spot, only behind Microsoft and Apple, on the list of largest U.S. companies by market cap.

Four companies account for nearly 40% of its revenue - all of which are its neighbors on the list of largest US companies by market cap (Microsoft, Amazon, Alphabet & Meta).

#4 | Max pain inflicted

The week ending February 20 was the 10th consecutive week of selling in ags, sitting within spitting distance of a 700,000-contract net short as of Tuesday, and has likely been breached by now. 

Managed money's net corn position has never been more bearish with a record short of more than 340,000 contracts. While their bean position isn't quite a record, soybeans have seen 14 consecutive weeks of selling, pushing the board $2.50 lower during that time and inflicting maximum pain for any longs in the market.

#3 | Race to the bottom

The soy complex has been under pressure since mid-November with sizable losses across beans, meal and oil.

Since the mid-November highs, meal has been the hardest it, down more than 27%, as tightness in cash markets has been alleviated amid record U.S. crush and the world turns its focus to new crop crush in Argentina later this spring. The clock is ticking as U.S. meal exports will no longer be winning by default with the world’s long-time largest meal exporter (Argentina) back online

#2 | Halfway there

Although soybean oil futures have tanked from the highs of 2022 and 2023 (down every trading day since mid-month) they remain elevated compared with historical values:

#1 | One big correlation

The relationship between diesel futures and soybean oil remains intact, as soybean oil now trades like an energy amid its new-found boom in demand on the back of California's Low Carbon Fuel Standard.

For the full version of this update, visit NoBullAg.Substack.com.

Thanks!


On the date of publication, Susan Stroud did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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