AM Comments 09/25/15
Friday, September 25, 2015, 7:09 AM
Submitted by: Dustin Weiner
Our markets performed well in the overnight trade, especially Nov beans which after a late-session bounce yesterday have taken out the high for the week already this morning – it will be interesting to see if they hold through the close. Commodities in general (with the exception of gold) may simply be following stocks higher this morning as the Dow is called to be up over 200 points on comments from the Fed Chairman that she expects interest rates to rise this year.
Outside of yield reports, a main topic of conversation in the cash trade still seems to be currency related, in particular the $US vs the Brazilian Real. The real has been dropping like a rock lately and to put it in perspective – the Brazilian farmer is seeing soybean prices today (with Nov futures in the mid-$8 range) that are higher than in 2012 when Nov futures skyrocketed to $18! As you can imagine, farmers down there are selling into it, and of course with prices like that - Brazilian soy acres are projected to go up (again). This situation in general makes it difficult for US beans to be competitive in the world export market and has been a bit of an anchor on soybean prices lately. Now yesterday the Brazilian gov’t announced it will step in to prop the currency up which stopped the Real’s 5-day losing streak with its biggest rally in 7 years. Time will tell if that plan will work…
Overall for today, looking at higher markets – taking cues from the financials. Could be a choppy close as some traders may take risk off ahead of the harvest weekend.
Corn 1 to 3 cents higher
Soybeans 7 to 10 cents higher
Have a great day!