AM Comments 2/4/16
Thursday, February 4, 2016, 8:02 AM
Submitted by: Eric Kist
Commodities are trending higher today as the US $ continues its two-day sell-off, fueled by concerns over the US economy. Dovish comments from the President of the New York branch of the Federal Reserve suggest that the economy has tightened since the Fed raised interest rates in December, and hints that any additional rate hikes in 2016 may be unlikely. As a result, the $ Index is down nearly 2.5% in the past two days, and is currently at a 3 ½ month low.
A strong Dollar has been a thorn in the side for US grain exports thus far in the year, so one can only hope export business going forward will tick up with an easing Dollar. Export sales this week were a mixed bag, as corn sales were reported above expectations, while soybean sales were disappointing – actually being reported as a negative number as cancellations of trades are being made. Over the past month soybean export business had picked up, as China was prompted to switch some business from South America to the United States, due to long delays at South American ports. However, that brief window appears to be closing, as wait times at Brazilian ports are reported to be decreasing, and China is switching back to the South American market.
The grain markets look to open higher this morning with support from the weak $, but bearish soybean exports may take the wind out of the sails for oilseeds later in the day.
Corn: 2-3 higher
Beans: mixed to 1 higher
Have a great day!