Agriculture -- Part 5, July 15, 2019

Updates

August 16, 2019: 2Q19 earnings -- 

• net income of $867M in the fiscal third quarter, or $2.71 per share, compared with $$849M, or $2.59 per share a year ago
• worldwide net sales decreased 3% Y/Y to $10B
• segment sales: 
• equipment -3%; 
• agriculture & Turf. -6%;
• construction & Forestry +1%. 
• "Results reflected the high degree of uncertainty that continues to overshadow the agricultural sector," CEO Samuel Allen declared. "Concerns about export-market access, near-term demand for commodities such as soybeans, and overall crop conditions, have caused many farmers to postpone major equipment purchases." 
• lowered outlook again: net sales are now projected to increase by about 4% (from a prior 5% and 7%) for fiscal 2019, with net income attributable to the company forecast to be about $3.2B (from a previous $3.3B and $3.6B).

Original Post

 

Wow, wow, wow, earlier today I posted this:

Look at this, DE: trading near its 52-week high, is up over 1% in early morning trading

Which reminds me, the China-US tariff tiff --

• when did you last see an article on how expensive stuff is getting because of the China-US tariff war; you haven't; because it hasn't happened; 
• generally speaking Deere's prospects can be directly correlated with how farmers are doing, or how analysts think farmers will do 
• April 15, 2019:  170
• May 13 2019: 135
• July 15, 2019: 167
• behind the scenes, my hunch is that Trump-Xi are making a lot of US agricultural deals
• corn prices are going to come in really high later this year
• if I recall correctly, Trump administration blinked on biofuel quotas (but don't quote me on that)
• and, headline over at Yahoo!Finance: China's economy grows at slowest pace since 1990s (this could spur China to get serious about negotiating with Trump

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So, this morning I write this long note about Deere. Now tonight I notice that Tractor Supply Company (TSCO) is up over 3% in overnight futures. Checking a bit deeper it turns out that Tractor Supply came very close to hitting a 52-week high today, an intra-day high of $113.14, vs a 52-week high of $113.54. And now tonight, trading 3% higher, trading at $115.00. Very, very interesting. First Deere, then Tractor Supply. Dare we look at any others? Not tonight.