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00:11Good morning. Welcome to the Myers Report Fast 15. It is Friday, July 10th.
00:19With us today, our Don Day, our weather explainer. He is back from his break up in,
00:26where were you, Glacier National Park, Don?
00:28Yes.
00:30I take it it was cool up there?
00:33Cool and wet. It was great.
00:36We also have Isaac Issa, who is the owner of Legacy Intermodal,
00:43which is a trucking company fleet that operates throughout the U.S.
00:48Bob Janetsky is on vacation today in Bob's absence.
00:54We have Jeremy Perlow. He is a member of the Myers Report Board of Directors.
01:01He's also CEO of Apollo Research, where we get where most of our data comes from.
01:07Jeremy is also a world-class expert commodities trader.
01:13He's been doing it. Jeremy, you've been doing this, what, 40 years?
01:16Just about, yeah. May 2nd, 1988 would be, so we're going on 38 years.
01:25That's roughly, right?
01:28No, that's exactly.
01:29Well, I've been in the business since 1981, but I've been a trader since 1988.
01:37We also have with us in our audience today, C.D. Mock, who was a national champion out of the
01:44University of North Carolina,
01:46was head coach there for a while.
01:47Wow. And, Jeremy, how many years did you wrestle, or were you in the wrestling community?
01:52I wrestled up until I was 50 years old, and I coached wrestling for 14 years.
01:58And what weight class were you wrestling in?
02:04105 to 125.
02:06Okay, so you're one of the little guys like me and C.D.
02:10Okay, Don, we are here in North Carolina, and boy, is it hot.
02:16How hot is it throughout the U.S.?
02:18Well, it's been pretty warm, and it's going to get warmer.
02:21In fact, there is going to be a pretty significant heat wave that's going to start in the west and
02:27expand into the midwest.
02:29Really, the biggest temperature anomaly is going to likely be more towards the northern part of the country, at least
02:38initially.
02:39And as you can see here in the graphic, we've got – whoops, let me pull this up.
02:44That looks like red, fiery hot.
02:47Yeah, it looks like someone spilled a can of red paint.
02:50So you can see that the core of the – what you want to look at is the more opaque,
02:56grayish-looking temperatures.
02:59Anywhere you see that, it's going to be 90 or above.
03:01And we're going to have some 100s in Montana.
03:04The Dakotas are going to bake, and that heat is going to move into the upper midwest.
03:09Notice, though, where you are, temperatures are actually not going to be as hot, but the humidities are really, really
03:17high.
03:18So we're going to see an extended period of very hot weather for the nation's midsection.
03:23This will impact the Corn Belt with not only heat, but there will be some pockets of some very dry
03:30weather developing for about five to seven days.
03:32And that's going to then go into the southern plains.
03:35So this heat dome is not going to be centered over the northeast United States, so it maybe won't make
03:42the news as much.
03:43But for folks in the middle of the country, flyover country, it's going to be very, very impactful.
03:50How's that going to affect the hog herds?
03:54That's maybe a question for Jeremy.
03:56Okay.
03:57Is it too early to forecast the hurricane season?
04:00Well, I'm glad you brought that up, Gary, because we do have a new updated forecast from Colorado State University,
04:07which is a well-respected group of atmospheric scientists there who try to track and predict the hurricane activity.
04:18And what you're seeing there on the column on the left, the middle column there with the numbers, is the
04:24new updated forecast.
04:26And they've dropped the number of tropical storms and hurricanes they think they're going to see in the Atlantic and
04:32the Gulf this year.
04:33If you look at the right side there, you see the averages.
04:36So name storms, they're predicting nine.
04:40We've already had one, which is Arthur, but we haven't had anything since.
04:44And that was a tropical storm that went across the south.
04:48This is not unexpected.
04:49We were predicting a below-average hurricane season.
04:52You can thank El Nino for this.
04:54The strengthening El Nino tends to really suppress hurricane development in the Atlantic and the Gulf.
05:01It doesn't mean there won't be.
05:03There will be some tropical storms and hurricanes.
05:05But the activity in the Atlantic and the Gulf will be down.
05:09Now, out in the Pacific, this is an opposite effect.
05:13Out in the Pacific, there will be more hurricanes and tropical storms.
05:17We've got a big one, typhoon, going to clip Taiwan and go into portions of China here over the next
05:23week.
05:24With things heating up in Iran politically, how's the weather looking over there in terms of military actions?
05:30Well, yeah.
05:31Well, the temperatures will be hot there, too, as you would expect, the middle of July in that part of
05:36the world.
05:36There's really no weather of any consequence.
05:39Storms are fronted as hot, dry weather.
05:41So the weather is not going to impact any military operations.
05:46Well, it's going to be clear skies.
05:47Yes.
05:49Okay.
05:51Isaac, Esa, how is the freight market recovery going this week?
05:56Yeah, the freight recession's over, depending on which mode of transportation we're measuring.
06:02Some of them went 40 months on the truckload side.
06:05Some of the, well, intermodal.
06:08Did you say 40 months?
06:1040 months freight recession, the longest, deepest freight recession that this industry's ever seen.
06:15A drage intermodal, imports and export containers, went 46 months officially.
06:21But it's over.
06:22It is over.
06:23Spot rates are surging right now.
06:25They're at all-time highs.
06:27They're at $3.83 a mile as of this week, which is a 23% jump from quarter four of
06:342025.
06:36And we're expecting this to continue for the next at least 12, if not 24 months, Gary.
06:42Is this going to put upward pressure on inflation?
06:45No, no, not really.
06:48The CPI for trucking, trucking rates have lagged since 2020.
06:54We're 27% negative in the CPI, so we're way behind.
06:59These are carriers and truckers just clawing back, lost margin, not necessarily driving new inflation here.
07:05Really, it's, you know, freight's been deflationary for shippers the last couple of years.
07:11This is really just a bill coming due, not new inflation, not an inflation shock necessarily.
07:18Okay, what about, what are electronic identification and enforcement initiatives?
07:24They're coming up a little bit.
07:26We're finding them on the radar.
07:27So these have been around for a while now.
07:30It's just, it hasn't been a mandatory device to put into the trucks.
07:34And essentially what it is, it's a device that goes into every truck where when we pass the scale houses,
07:39there's a radar.
07:40If you pay attention next time, about a mile before you get to scale house, you'll see it in the
07:46skies.
07:46It looks like a light post.
07:48And it scans the device and it gives the officer the full pretty much bio on the carrier safety scores,
07:56how long they've been in business for, et cetera, et cetera.
07:59What we use today is called a pre-pass device that shows all this data.
08:04Again, right now it's not mandatory.
08:06Carriers like myself who prioritize safety put them in their trucks.
08:11But yeah, it's essentially a mandatory push that the government's doing where we can mandate them across the country.
08:20And I'm all for it.
08:21A lot of carriers like myself who, again, prioritize safety are really pushing for these devices right now, Gary.
08:28Are they impacting costs at all?
08:30No, no, not at all.
08:32Not at all.
08:32If anything, the only thing that I would say, you know, kind of going back to what's, you know, circling
08:37back to, you know, the recession being over, we were thrown into a recession essentially over an influx of truck
08:44drivers, many of them illegal, many of them non-domiciled truck drivers that should have never been on the road
08:50in the first place.
08:50A lot of the big headlines we've seen over the last 12 months in trucking where we have all the,
08:56you know, again, the illegal drivers who aren't trained properly, killing people on our roads.
09:02You know, a lot of it, a lot of what's happening in our industry with the freight recession being over
09:08is really the flush out of all of this unsafe capacity.
09:12With these devices now in the trucks, this will only further accelerate that flush out in unsafe capacity.
09:19So to that point, rates will go up, but it goes right back to what I said earlier, right?
09:25This is, you know, trucking.
09:27It's a recovery.
09:30I got it.
09:30Okay.
09:31Thank you, Isaac.
09:35In discussing what's going on with the economy and high rates, it seems that it's not, it's good news on
09:42the economy.
09:43The S&P 500 and the Dow Jones Industrial Average are at near record highs, so that's not being negatively
09:52impacted.
09:57The interest rates are up a little bit, but not by much.
10:02The 10-year treasury is at 4.56, which is basically, it's a little lower than where it was at
10:11the beginning of the year before the Iranian situation.
10:15Our 30-year fixed rate mortgage, again, is also lower than it was at the beginning of the year.
10:21And at 6.49%, while that may seem high to some people, historically, those are low rates.
10:29And this is good news.
10:32At least the interest rate markets are not reacting.
10:36One of the interesting things also is the price of oil.
10:40The West Texas Intermediate is coming down.
10:43It is now, the average so far for the first several days of July is 69.99, which is a
10:53far cry from the 98.49 that we saw in April and May.
10:58And it is now within the ranges that we had forecast last November for this year, as was the beginning,
11:07as was the first, as it was for the 2, 4, 6, 8, 9 months before we had the start
11:15of the Iranian war.
11:18But now it's coming back to normal, nonetheless.
11:23It's also shown up in the price of fuel coming down.
11:28Diesel, at the beginning of May, was it more than 550?
11:32It's now down into the mid-4s.
11:37And gasoline is now dropping down as well, both for rural gasoline and urban gasoline.
11:47Jeremy, how is it looking for crops this year and commodities prices?
11:53The crop story is weather-driven, of course.
11:57I think that, in my personal opinion, we were going to have a bumper crop.
12:02It really depends on how hot the rest of this summer is.
12:08Soybeans, in particular, cannot handle these temperatures.
12:12So, if we have sustained temperatures for a long period of time, that will kill off some of the soybean
12:19crop.
12:20Corn is more resilient.
12:22The soil conditions, they've had a lot of moisture in the soil, so they're real hardy right now.
12:29The real trouble spot is wheat.
12:32We've had a reduction in winter supply and a tightening of supplies related to other crops and corn being grown
12:48over the wheat, getting a shift in production.
12:52So, the pork is in a much better supply position.
12:59The pork has been stuck in a narrow range for the last several months.
13:07Demand and supply have maintained a steady pattern.
13:13I do expect that to shift this winter and maybe demand outweighs the supply.
13:20The supply in hogs has been dropping related to disease.
13:26We talked about heat today.
13:30And, Gary, you mentioned something about pork.
13:32And Don said that's more my line of questioning.
13:38So, what I'll tell you about that is excessive heat when you're moving animals will kill these animals on the
13:45way to the slaughterhouse.
13:46So, they will die on the truck.
13:48You'll have some death loss.
13:51That is not really a big concern unless it goes on for a long period of time.
13:56Moving on to chicken.
13:58Chicken remains the value protein.
14:00Consumers are substituting chicken for expensive beef.
14:04And the production remains strong, at least right now, for chicken.
14:10Egg prices are stable.
14:11I'm seeing Packers run, I wouldn't say Packers.
14:18Grocery stores are running pork value adds this last couple of weeks, trying to push pork during the grilling season
14:28here.
14:29And the prices haven't risen that much.
14:33I would say per pound, if I were looking at ribs, at $2.99 last year versus $3.99.
14:39But that's taking into consideration that your New York strip steak is about $5 to $6 more than what it
14:49was a year ago versus $12 versus $17 to $18 now.
14:54Those prices, I quote from Costco, which I monitor on a regular basis.
14:59But I also monitor the BLS, which is the Bureau of Labor Statistics.
15:03And I watch the national average there as well.
15:07Are there any other questions you might have?
15:11So basically, do you see food costs for the average consumer pushing inflation up, or is it going to be
15:18moderate?
15:19It has already pushed food inflation up.
15:23The question is, will it come down?
15:26I don't think it gets more expensive than where we're at, as long as you get oil under control.
15:36Now, it seems like oil has been under control the last couple of weeks, and the price of oil has
15:42dropped considerably.
15:44That helps the value of those products from not increasing from long-stained effect.
15:54Now, if we go back to war and we have an oil issue again, then all bets are off.
16:01I would say then you could resume some inflation in the food pricing, just related to cost of delivery.
16:09In terms of things getting hot over there and the Strait of Hormuz driving things through the roof, I don't
16:17think so.
16:18I think that one of the problems that the Iranians have misjudged is that in putting pressure on the Strait
16:25of Hormuz,
16:26various Gulf nations have been finding alternative ways to ship their oil across,
16:33where they're now distributing and bypassing the Strait of Hormuz by pipeline,
16:38where they're now distributing by the Red Sea and also into the Mediterranean.
16:47And the Saudis have got something cooking with a pipeline through Israel,
16:52which is going to make things very interesting.
16:55The point is the Strait of Hormuz will never, when this is all over,
16:59will never be as critical as it once was.
17:03Okay, Don, Isaac, Jeremy, our question for the week is,
17:08is there a real need for the SAVE Act voter ID to be passed?
17:14Don, what's your view?
17:16Yeah, absolutely.
17:18Isaac, what's your view?
17:20Yeah, yeah, no, yes, I agree with Don, absolutely.
17:23And to add to that, it's, you know, it's kind of,
17:26I guess it's the same thing about what's happened to trucking over the last 46 months
17:29and what spun us into a freight recession.
17:31All the silliness is over.
17:33Gary, and it needs to be over.
17:37Jeremy.
17:39I would say yes.
17:41And I think it's about time that that has a better functioning system.
17:47I think the system currently in place doesn't really work that well.
17:53I agree with you guys.
17:55It must be done because the levels of voter fraud that we have seen in the country
18:00are, is quite large, quite staggering.
18:03And I will make a forecast that one of the hot issues coming up soon is going to not only
18:11be
18:11the anchor baby situation for citizenship, which is wrong and being abused.
18:17The issue is going to be how foreign governments are actively involved in it.
18:21And get this, one of the hot issues will be basically mass surrogate babies being born in this country by
18:30surrogates
18:31in order to give non-citizen families citizenship.
18:36It gets crazy.
18:38With that, guys, be well, stay safe, have a good weekend, and God bless America.
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