AM Comments 12/17/15
Thursday, December 17, 2015, 8:12 AM
Submitted by: Dustin Weiner
As many have heard, it was announced yesterday that the Fed is going to increase interest rates by 0.25%. While the $US didn’t move a whole lot yesterday after the interest rate announcement, the $US is screaming higher this morning which is applying pressure to commodities.
Soybeans are also getting pressured thanks to the Argentine government’s decision to let its currency float freely, beginning today. This will have the effect of ‘devaluing’ the Argentine Peso, which gives the Argentine farmers much higher prices for their commodities. The story is that the Argentine farmer was expecting this, and has been holding onto soybeans waiting for it. This is bearish to US prices/exports as the U.S. farmers remain somewhat reluctant sellers while the Argentine farmers are now turning into heavy sellers. In the case of Argentina may have an even larger effect on soy meal as they crush most of their beans in their soy processing plants.
Lastly - the weekly export sales report was out this morning and exports showed up at the low end of estimates, but nothing shocking. Overall – not a lot of positive news to start the day…
Corn 1 to 3 cents lower
Soybeans 5 to 8 cents lower
Have a great day!