PM Comments 2/24/15
Tuesday, February 24, 2015, 4:02 PM
Submitted by: Eric Kist
It was a wild ride in the markets today, as both the corn and bean markets traded to their highs mid-morning, and then both retreated leading into the close. For the day, corn dropped a penny to close at 3.77 ½, while beans traded as much as 30 cents higher, before losing steam and closing at 10.16 – still a gain of nearly 17 cents on the day.
The big story for the day was news of the Brazilian truck driver strike, in which truckers are protesting government taxes on diesel fuel by actively blocking traffic on major highways – including many in large soybean-producing areas of the country. The market’s sentiment seems to be that since these blockades are restricting soybean flow to the major shipping ports, Brazil may struggle to meet its export commitments, and may cause importing nations to shift their attention elsewhere (the United States, perhaps?) to meet needs. Also, with the movement of grain being restricted, harvest itself in Brazil may be delayed, which consequently would then disrupt planting for their second corn crop, which is expected to pose strong competition to U.S. corn exports later in the crop year. Whether these truck drivers will be successful in their protest or not is up for debate, as there has already been word that the Brazilian government is expected to intervene, possibly as soon as this afternoon, in an attempt to restore order and allow for unrestricted travel.
Along the same lines, shipping ports along the west coast of the U.S. are back up and running, as dockworkers and management were finally able to come to an agreement. The total amount of damage caused by the labor strike may not yet be fully realized, however. Market analysts fear that the U.S. could possibly lose some of its market share in Asia for both beef and pork products, as Asian countries are beginning to question our ability to deliver.
Outside markets were mixed today, as the US $ was lower, stocks were higher, and crude oil was lower.
Have a good night!