Thursday, March 29, 2018

Soy In, Corn Out -- Well Not Quite -- 89 / 88 -- March 29, 2018

Pardon the interruption: before we get to what I was going to post first, this weather advisory -- global warming hits North Dakota on Easter:


See first comment which has this link: http://www.cmegroup.com/education/featured-reports/crude-oils-next-move-clues-from-soybean-oil.html.

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The Agriculture Page

From The Bismarck Tribune:
Corn has been dethroned as the king of crops as farmers reported Thursday they intend to plant more soybeans than corn for the first time in 35 years.
Profitability is the primary reason farmers indicate they intend to plant 89 million acres in soybeans and 88 million acres in corn.
Corn costs much more to plant because of required demands for pest and disease control and fertilizer. When the profitability of both crops is close, farmers bet on soybeans for a better return, said Chad Hart, an agriculture economist at Iowa State University.
Soybeans cost about 60 to 70 percent as much as corn to plant.
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Tesla Recall

I was posting all this "stuff" on an earlier post but it was getting too crowded. Instead of posting this additional note at that post, I will post it here.

This is not the way to treat your investors. 

From The Street:
Shares of Tesla fell sharply in after-hours trading Thursday after the company said it is voluntarily recalling Model S vehicles built before April 2016 to fix a power steering component.
The stock fell $9.63 to $256.60 in late trading, undoing gains made during the regular session.
Year to date, shares are up about 10%.The company said in a statement that there have been cases of excess corrosion in the power steering bolts in cold climates where calcium or magnesium road salts are used instead of sodium chloride. It said it is fixing the bolts in all affected cars in the event that the vehicles are ever used in cold climates.
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Shorts: WSJ. The Journal apparently updates this data twice/month.


A reader suggested I start following the statistics:

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Porsche EV

There is another option for EV enthusiasts ... range over 300 miles ... can get 80% charge in 15 minutes:


And posted on YouTube earlier today:


Three New Permits; Six Permits Renewed -- March 29, 2018

Active rigs:

64.943/29/201803/29/201703/29/201603/29/201503/29/2014
Active Rigs60493197194

Three new permits:
  • Operator: WPX
  • Field: Spotted Horn (McKenzie)
  • Comment: WPX has permits for a 3-well Young Bird pad in SWSW 34-150-94;
Six permits renewed:
  • BR (3): one Cleetwood and two Gudmunson permits in McKenzie County
  • EOG (3): three Clearwater permits in Mountrail County
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Getting Ready For Easter

Sophia decorating the Easter tree.


Re-Balancing Remains At 33 Weeks -- March 29, 2018

Yesterday:
Weekly petroleum report:
  • crude oil inventories: increased by 1.6 million bbls; now at 429.9 million bbls
  • refineries operating at 92.3% operable capacity -- nice; pretty much the sweet spot between 92 - 94%
  • gasoline production up a bit; distillate fuel production up a bit
  • if folks weren't following crude oil inventories so closely, this would pretty much be a ho-hum report
Today, the re-balancing spreadsheet (minor process change made in the third column but it does not affect the bottom line). Re-balancing remains at 33 weeks.

Week
Date
Drawdown
Storage
Weeks to RB
Week 0
Apr 26, 2017

529.0
180
Week 24
October 12, 2017
-2.8
467.8
40
Week 25
October 18, 2017
-5.7
473.5
37
Week 26
October 25, 2017
0.9
457.3
39
Week 27
November 1, 2017
-2.4
454.9
38
Week 28
November 8, 2017
2.2
457.1
42
Week 29
November 15, 2017
-1.9
459.0
43
Week 30
November 22, 2017
-1.9
457.1
42
Week 31
November 29, 2017
-3.4
453.7
41
Week 32
December 6, 2017
-5.6
448.1
37
Week 33
December 13, 2017
-5.1
443.0
36
Week 34
December 20, 2017
-6.5
436.5
30
Week 35
December 28, 2017
-4.6
431.9
28
Week 36
January 4, 2018
-7.4
424.5
25
Week 37
January 10, 2018
-6.9
419.5
23
Week 38
January 18, 2018
-6.9
412.7
20
Week 39
January 24, 2018
-1.1
411.6
20
Week 40
January 31, 2018
6.8
418.4
24
Week 41
February 7, 2018
1.9
420.3
26
Week 42
February 14, 2018
1.8
422.1
27
Week 43
February 21, 2018
-1.6
420.5
27
Week 44
February 28, 2018
-1.6
423.5
28
Week 45
March 7, 2018
2.4
425.9
29
Week 46
March 14, 2018
5
430.9
33
Week 47
March 21, 2018
-1.6
428.3
32
Week 48
March 28, 2018
1.6
429.9
33


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Galveston, Glenn Campbell

The Katie Ledecky Page -- March 29, 2018

Headlines:
  • Katie Ledecky turns pro after dominating college swimming (all two years of it), The New York Times, March 26, 2018; link here;
  • Katie Ledecky turning pro shows the folly of the NCAA's white-knuckle grip on "amateurism" -- Yahoo Sports, March 26, 2018; link here;
  • Katie Ledecky likely face of US Team for '20 Games after going pro, SportsBusiness Daily; link here
  • Five-time Olympic gold medalist Katie Ledecky will turn pro, The Washington Post; March 26, 2018; unable to get good link; Katie Ledecky’s short but spectacular collegiate swimming career is finished. The five-time Olympic champion will forgo her final two seasons of college eligibility at Stanford to embark on a professional swimming career, immediately setting her sights on the 2020 Summer Games in Tokyo.
  • Katie Ledecky decides to turn pro after leading Stanford to second NCAA title; USA Today, March 26, 2018; link here
From USA Today:
It’s hard to imagine a company that wouldn’t want to be associated with Ledecky, who has broken 13 world records and 33 American records in her illustrious career.
Her athletic resume is impeccable.
After winning a surprising gold medal in the 800 freestyle as a 15-year-old at the 2012 London Olympics, she came back to win four golds (the 200, 400 and 800 freestyles, and the 4x200 freestyle relay) and one silver (the 4x100 relay) while setting two world records in Rio.
Her dominance was extraordinary; who can forget the social media photos of the 800-meter event in which she was the only person in the picture even though seven other women were in the race?
My favorite YouTube video of Katie Ledecky: https://youtu.be/JHbNKX3VkIM.  At the link, at 1:16, she steps on to the world's stage at age 15. Think about that. At age 15. The British announcers are clearly still thinking that their British favorite Adlington will win even at the 500-meter mark where Ledecky is well ahead of the British (and Olympic) favorite. At the 9:00 minute mark on the video, finally some concern by the British announcers. By now, Ledecky has a two-body lead. At 10:04, Ledecky is the only swimmer in the video shot. Announcers are wasting time talking about the others; the bit story is Ledecky and they are missing it. Ledecky is so far ahead, and yet the announcers, even at the turn into the final lap have not grasped what is going. Midway in the final 100 meters, finally -- the announcers get it. Wow, even at the end, still talking about the Brits.

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La Mer

La Mer, Charles Trenet


The Political Page, T+29 -- March 29, 2018

One of Vic Hanson's best replies to an "angry reader." In one or two short paragraphs, Vic Hanson has completely encapsulated the political history of the Obama administration and the campaign of 2016.

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The Library Page
  • A Night to Remember, Walter Lord, c. 1955
In 1898 a struggling author named Morgan Robertson concocted a novel about a fabulous Atlantic liner, far larger than any that had ever been built. Robertson loaded his ship with rich and complacent people and then wrecked it one cold April night on an iceberg. This somehow showed the futility of everything, and in fact, the book was called Futility when it appeared that year, published by the firm of M. F. Mansfield.
Fourteen years later a British shipping company named the White Star Line built a steamer remarkably like the one in Robertson's novel. The new liner was 66,000 tons displacement; Robertson's was 70,000 tons. The real ship was 882.5 feet long; the fictional one was 800 feet. Both vessels were triple screw and could make 24 - 25 knots. Both could carry about 3,000 people, and both had enough lifeboats for only a fraction of this number. But, then, this didn't seem to matter because both were labeled "unsinkable." 
On April 10, 1912, the real ship left Southampton on her maiden voyage to New York. Her cargo included a priceless copy of the Rubaiyat of Omar Khayyam and a list of passengers collectively worth $250 million dollars. On her way over she too struck an iceberg and went down on a cold April night.
Robertson called his ship the Titan; the White Star Line called its ship the Titanic. This is the story of her last night.
Nobel Peace Prize, 2019 (posted at 11:06 a.m. Central Time, March 29, 2018):
  • shared: Kim Jong Un, Xi Jinping, and DJT 
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The Book For Today

The Last Englishman: The Double Life of Arthur Ransome
Roland Chambers
c. 2009

Arthur Ransome: among the handful of writers who make up the British children's canon which includes AA Milne, JRR Tolkien and CS Lewis
  • Ransome, today, is best known for Swallows and Amazons and eleven further stories written one after another on an almost yearly basis between 1930 and 1947; twelve "immortal" books; wrote them on his return from Russia in 1928
  • 1917 - 1924: the Russian correspondent for the Daily News and the Manchester Guardian
  • Bolshevik sympathizer
  • lover, and later the husband, of Evgenia Shelepina, Trotsky's private secretary
  • friends included Karl Radek, the Bolshevik's Chief of Propaganda, and Felix Dzerzhinsky, founder of the secret police
  • denied the horrors that the followed the Russian revolution; became the bane of the British establishment
  • his name, and by extension his character, have become identified with a particular vision of England: a pastoral, old-fashioned utopia set in the Lake District sometime between the wars, with its roots in the Edwardian heyday of the British empire
Chapter 21: Swallows and Amazons
  • the Great War was directly responsible for a greater number of future conflicts than any previous war in history
  • think of the books published directly after the Great War
    • TS Elit's The Waste Land
    • James Joyce's Ulysses
    • Ludwig Wittgenstein's Tractatus Philosophicus, revolutions in poetry, the novel and philosophy
    • Hermann Hess, Demian: "Whoever wants to be born must first destroy the world."
    • PG Wodehouse: My Man Jeeves; enchanted his readers by forgetting the war altogether, or rather, by perfecting the art of ignoring what could not be forgotten
    • some had foreshadowed the Great War: Thomas Hardy; Rudyard Kipling; Joseph Conrad
    • others stepped out of the Great War, fully Grown: Ernest Hemingway, F Scott Fitzgerald
    • others: Siegfried Sassoon, Wilfred Owen
  • returns to England, 1924
  • August: first fishing article in the Guardian; earned him a place in angling history; on-going column, "Rod and Line"
  • Racundra earnings help pay for his barn he constructed as a study
  • 1924: spent Christmas in Egypt, covering the assassination of Lee Stack
  • 1925: back to Russia to write a brief history of Revolution commissioned by the Encyclopedia Brittanica
  • final political pamphlet: The Chinese Puzzle, November, 1927 
  • February, 1928: back to Russia; "the end of an epoch"
  • Stalin's victory over Trotsky, Ransome noted sadly, was essentially a bureaucratic coup de main
  • 1929: Ransome describes it as a "year of crisis"
  • Jonathan Cape approached him; Cape was then the foremost publisher of the day, who asked Ransome to put together a collection of political essays, the first of a series which Cape suggested might support him in old age
  • what Cape got was a selection from "Rod and Line" and a synopsis of The Swallows and the Amazons
  • 1930, returned to England; determined to devote himself entirely to his book
  • book dropped the The (s)
  • sold slowly at first but by third adventure, Peter Duck, a book set in the West Indies, the tide turned; he put all journalism other than literary reviews behind him
  • by 1948, shortly after the appearance of the twelfth and final book in the series, Great Northerns?, Cape had sold their millionth copy
  • died 1967, two years before Neil Armstrong walked on the moon
  • the majority of Ransome's papers can be found in the Brotherton Library at Leeds University, where Ann Farr, one of the talented few capable of deciphering his handwriting, began to catalogue them in the 1980s

The Market And Energy Page, T+29 -- March 29, 2018

Correction: earlier this week I wrote that we would know on Friday, 10:30 a.m. Central Time whether the market's surge on Monday was a dead cat bounce. The market is closed Friday. We will know today at the close whether Monday was a dead cat bounce:
  • if the market closes on a negative note, clearly Monday was a dead cat bounce
  • if the market closes less than 150 points up, Monday was likely a dead cat bounce
  • if the market closes between 151 points and 250 points up, Monday was NOT likely a dead cat bounce
  • if the market closes up more than 251 points today, Monday was clearly not a dead cat bounce [Later, the Dow closed UP 255 points -- which I would argue is a somewhat ambivalent response]
TSLA: On the last trading day of the quarter, and on a day the market is marginally higher, TSLA? Down another 3%; down almost $8. Could drop below $250/share. Did I hear someone say "ouch"? [Later, TSLA closed up over 3%; over $8/share.] [After market close and just ahead of a 3-day weekend Tesla announces a recall of 123,000 Model S cars over faulty steering component: the timing of the announcement is incredibly interesting. This has to leave a lot of TSLA "investors" a bit nervous -- buying TSLA at the close (when shares were moving up) and now not knowing what the recall will mean to TSLA when the market opens again -- a long, long three days from now.]

 The above posted at 7:14 p.m. Central Time, March 29, 2018.



Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or what you think you may have read here. However, having said that, Grapevine, TX, is a nice place to visit this time of the year. Or, actually, any time of the year.

Biggest problem for Tesla: no moat.
  • at the high end: Jaguar + Waymo = I-Pace
  • at the low end: Hyundai just announced its EV entry 
 Second biggest problem for Tesla: minimal experience with manufacturing automobiles
  • Jaguar: long, long history
  • Hyundai: long, long history
Best thing going for Tesla: faith.
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Port Of North Dakota

Minot Daily News provides update.
  • the railhead / terminal / transloading facility leases land from the city of Minot
  • the port has not paid its lease in some time; the port has defaulted on many loans
  • the city has taken steps to terminate the lease with the port
  • the port has until April 30, 2018, to sort this out
  • port leases about 135 acres from the city of Minot
  • the city has capitalized about $1 million in rail and other infrastructure at the port 
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Frack Sand

Look at that amount of sand Enerplus used on this frack, reported today, almost 20 million lbs:
  • 33486, 1,667, Enerplus, Crane 150-94-33C-28H, Spotted Horn, 40 stages; 19.3 million lbs, mesh; t10/17; cum 184K 1/18; 
See results of other wells that came off confidential list this week at this post.

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Bakken Economy


Unemployment LOWEST In 45 Years -- President Trump Not Mentioned In The Article -- March 29, 2018

Econoday link:
  • prior revised: from 229K to 227K (better)
  • forecast for past week: 228K
  • actual: 215K -- wow!
  • new claims: a decrease of 12,000 
Pretty amazing. Lowest since January, 1973.

Waiting for the Trump tweet.

And President Trump won't get any credit.

And again, the word I seem to hear every time these great reports come out: "unexpectedly."

From Bloomberg:
U.S. filings for unemployment benefits unexpectedly fell last week to the lowest level since January 1973, further evidence that the labor market remains tight, Labor Department figures showed Thursday.
  • jobless claims decreased by 12k to 215k (est. 230k)
  • continuing claims rose by 35k to 1.87m in week ended March 17 (data reported with one-week lag)
  • four-week average of initial claims, a less-volatile measure than the weekly figure, fell to 224,500 from the prior week's 225,000
 With regard to the graphic and January, 1973, above: it looks like the '60's came to an end in 1973.

Meanwhile, with regard to consumer sentiment:


Taxable Sales And Purchases -- North Daktoa -- 2017 Data Released -- Not Fake News But Incredibly Poor Headline / Poor Reporting

To the reader who sent me the link/story:
Wow, wow, wow -- what a poor headline.

2017 over 2016:
Every major city in ND showed negative  change 2017 over 2016 EXCEPT Dickinson and Williston. Even Minot showed a slight decrease. Bismarck, Fargo, Grand Forks -- all negative.

Williston: 24% increase in taxable sales and purchases year-over-year.
The only reason ND was even positive by 3% was due completely to the Bakken.

Even Minot was slightly negative. 

The full PDF tables are here.
I will come back to this later when I have more time. Blogging will be delayed today.

I am not sure if all links work but we will get that sorted out later.

This is the reason for being behind in blogging. Re-reading an expert's analysis of the Bakken. I'm trying to see what I missed. It will take me most of the day to get through that report.

Active Rigs Hold Steady At 62 -- March 29, 2018

Updates

Later, 9:32 p.m. Central Time: this is why I love to blog. I thought someone would "call me" on my habit of calculating "deals" on a per-net-acre basis. It turns out I'm not the only one. See this post over at oilprice.com:
To be sure, investors were not exactly enthused by the deal, which amounted to a greater than $70,000 per-acre price tag.
Original Post
 
Permian consolidation. This may be the biggest news of the day in the shale sector: Permian oil producer to buy rival RSP Permian.
  • $8 billion; all stock deal
  • RSP:29% premium for shareholders
  • 92,000 net acres
  • will make Concho one of the biggest producers in the Bakken
  • Permian could report as much as 3 million bopd in March, 2018
  • back-of-the-envelope: $8 billion / 92,000 acres = $87,000 / acre 
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Back to the Bakken

Active rigs:

$64.323/29/201803/29/201703/29/201603/29/201503/29/2014
Active Rigs62493197194

RBN Energy: why $3 natural gas continues to elude the market.