Cargill Forces Lockout, Corn Markets Slide, SpaceX Goes Public

Today we start with Cargill announcing a lockout at one of its facilities, then we pivot to corn markets sliding a bit after a rally. We finish with news of SpaceX going public. 

Transcript

SPEAKER_00 0:11

Hello and welcome to Chap B DC. It's Friday, May 22nd. You've got your three articles queued up for today. We're gonna focus on Cargill's lockout of one of their facilities. Take a deeper dive at corn markets, and we're gonna finish up with Elon Musk getting richer. So let's get to it. Spokesperson for Cargill confirms the company initiated a lockout on May 20th at its Fort Morgan, Colorado beef facility following months of bargaining and an employee vote against the latest contract offer. The Fort Morgan plant has not been harvesting since April 23rd due to these ongoing labor negotiations with Teamsters Local 455 and the concern of a potential work stoppage. Beef processing involves live animals and highly coordinated operations. Cargill explains a sudden stoppage during production could create risks related to food safety, animal welfare, and could result in extensive food waste. A Cargill spokesperson said the decision was difficult and not the outcome they wanted. Lockout was initiated because continued uncertainty around potential work stoppage creates challenges for operating safety, responsibility, and reliability. The spokesperson said the company respects employees' right to vote and remained committed, remains committed to reaching a ratified agreement with the union. Cargill reports the halt in processing at Fort Morgan is not impacting its weekly harvest numbers, just shifting them around a bit. At full capacity, the Fort Morgan plant harvests 4,700 head per day. Prior to the halt, it was averaging about 4,000 head. On social media, the union leader says the number the members at Cargill have spoken loud and clear. By an overwhelming 85% vote, the company's offer was rejected. Unity and Solidarity sent a strong message that the membership deserves better. So more to come on that front. On the commodity side, we have an article from Farm Futures. In recent years, U.S. corn farmers counted on robust export demand to help soak up bumper harvests and prop up prices, which recently topped $5 a bushel. U.S. corn exports have nearly doubled since 2022-23, expanding at an annual average of 33% to a record this year. But USDA's initial 2026-27 estimates threw up a red flag. Next year's exports are seen down almost 5%. So is the export boom starting to fade. July corn futures fell a penny to 464 and 3 quarters per bushel late in overnight trading after sinking 9.5 cents Wednesday to 465 and 3 quarters, the contract's second lowest close in the past three weeks. December corn fell 1.25 cents to 488 after dropping 8.5 cents Wednesday to 489.25, down over 17 cents from a two and a half year high at $5.06.5 cents posted on May 13th. Corn technicals eroded further overnight with July futures tracking for a second consecutive close below the 50-day simple moving average around $4.68. And nearing support at the 10 at the 100-day SMA, which was $4.58.5. Prices have posted progressively lower and lower highs the past week, a sign of a marking running market running out of bullish impetus. July futures have given back about 60% of a 39 cent rally that began mid-April and took prices to a high at 487.50 on May 5th. December futures also show signs of additional downside potential as prices pushed further below the 50-day SMA of 487.80 a bushel.5 cents Wednesday to just over 425.5. Wednesday's average was about 40 and a quarter cents below July futures, narrowing from 40 and 3 quarter cents a week earlier. Corn futures extended Tuesday's declines overnight as the market joined a broad slide across the grain and oil seed complex. Tuesday's pressure was attributed in part to a sharp drop in crude oil, but a rebound in oil prices today is doing little to motivate grain buyers. Corn futures have now entirely erased gains from Monday's rally amid lack of any USDA flash sales announcements or other confirmation of new China demand. Wrapping up with financial news, the rich get richer, Elon Musk announced plans Wednesday for one of the biggest stock sales ever by taking public a space company that is currently losing billions of dollars a year. Filing shows that his SpaceX lost $2.6 billion from operations last year on $18.7 billion in revenue, and the losses kept piling up at the start of the year too. The prospectus did not put a dollar figure on the amount Musk hopes to raise, but various reports have it have put it at $75 billion or so. An offering of that size would easily surpass the current title holder, Saudi Aramco, the oil giant that went public seven years ago and raised $26 billion. SpaceX has said the money will help finance projects to put people on the moon and Mars in its quest to make humans an intergalactic species as they face existential threats that could wipe out civilization. Their words not mine. We do not want humans to have the same fate as dinosaurs, the filing states. Let's hope that that is true. Well that's all for now as always thanks for tuning in to ChatBDC. If you found this useful subscribe and share and tell all your friends I'll be back Monday with more business news across ag and financial markets. Have a great weekend everyone have a safe Memorial Day. Until then I'm Mike Opperman and goodbye for now