AM Comments 08/18/16
Thursday, August 18, 2016, 1:08 PM
Submitted by: Dustin Weiner
If we are crediting yesterday’s rally (recap: led by the soy complex which spilled into corn) to the strength in veg oil futures (namely palm oil) then it shouldn’t be surprising that the lower trade in soybeans overnight is being credited to a weaker veg oil market. Malaysian palm oil futures have been on a tear lately which means today could just be a little profit taking, so we may not stay lower all day. Also, after putting “Malaysian palm oil” in my comments yesterday I had some of you insinuate that I was really stretching and reaching for stuff to type... While that can be true at times – FYI: palm oil these days is considered the head of the dog while soybean oil is viewed as the tail. It hasn’t always been that way but in the last couple decades they have really ramped up palm production in Malaysia & Indonesia (the futures market is based in Malaysia) and palm oil is now the most widely traded veg oil in the world. So there, don’t make fun of me for talking about Malaysian palm oil!
Moving on. The $US is continuing to slip this morning as the minutes from the July Fed meeting showed no solidarity in opinions about the interest rate. Some think it should be increased right away while others want to wait and see. Overall it does appear that an interest rate hike is coming but after skimming through the minutes, it may not be until January 2017. So the $US is weaker again for now, which should support commodities.
It’s that time of year for private crop tours to start – the Pro Farmer Tour seems to be followed the most and that starts Monday of next week. With the variability out there it sure seems that if you want to take a picture of some uglier corn or if you want to take a picture of some excellent corn – you could do so all in the same area. These crop tours are fun but they are somewhat hard to trust. We will get new (objective) data from the USDA in a month or so, until then be careful reading too much into the crop tours.
Soybeans 7 to 10 cents lower
Have a great day!
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