Sean K. Treasure
Equity markets mirrored last week’s sell-off with a major rally, finishing the week with 3 consecutive days of higher trading. For the week, the Dow gained 3 percent, the S&P 500 rose 3.4 percent and the Nasdaq climbed 2.4 percent. Overseas equities markets also finished strong. After dropping 3.6% on Monday and Tuesday, the recovered and Nikkei finished out the week up 0.6%. The driving force was language from the Fed suggesting a not so imminent threat to raising interest rates. Crude also finished lower on the week despite a short covering rally today. WTI closed at $56.52/barrel.
Grains were largely stronger on the week as well. Nearby Chicago wheat futures finished up 25 ¾ cents, KC closed up 31 ¾ and Minneapolis spring wheat futures finished 27 ½ higher. Corn finished up 3 cents. Soybeans were the laggard closing down 16 ¾ cents for the week. Informa Economics’ 2015 acreage estimates were big for soybeans at 88.78 million acres which makes us wonder how much further downside risk there could potentially be in the beans. Think very carefully before initiating a new long position.
Yesterday’s export sales report was a non event; 476,300 MT for wheat, 693,500 MT corn and 696,000 MT of soybeans. I wouldn’t characterize these numbers as bullish or bearish. If this week’s rally is demand driven then this is one of those times where the trade is focused on uncertainty. As the grizzled veteran traders say, fear before fact.
We have heard rumors that the Russians are actually preventing loaded vessels from sailing, citing phytosanitary restrictions. Obviously this is a ruse meant to restrict grain exports in general. Still, they are protecting some of their major customers including Egypt. Remember the last time the Russians tried to halt exports? The Egyptians stiff armed them; don’t expect them to allow it this time either. Elsewhere in the global trade, Bangladesh tendered for 50,000 MT of optional origin wheat for Feb/Mar. Algeria tendered for 50,000 MT of optional origin wheat for Mar/Apr. South Korea bought 120,000 mt option origin Corn for April. South Korea bought 60,000 mt US or SA Corn for April. The Korea Feed Association (KFA) purchased 60,000 tonnes of corn which can be sourced optionally from the United States or South America in a tender which closed on Friday.
Expect trade to be relatively quiet, low volume for the balance of the calendar year.
Happy trading!
Disclaimer: Commodity trading involves substantial risk and may not be suitable for everyone. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email and basic data from which they are derived are believed to be reliable, but cannot be guaranteed due to uncertainty about future events and complexities surrounding commodity markets. Those acting on the information are responsible for their own actions.
Equity markets mirrored last week’s sell-off with a major rally, finishing the week with 3 consecutive days of higher trading. For the week, the Dow gained 3 percent, the S&P 500 rose 3.4 percent and the Nasdaq climbed 2.4 percent. Overseas equities markets also finished strong. After dropping 3.6% on Monday and Tuesday, the recovered and Nikkei finished out the week up 0.6%. The driving force was language from the Fed suggesting a not so imminent threat to raising interest rates. Crude also finished lower on the week despite a short covering rally today. WTI closed at $56.52/barrel.
Grains were largely stronger on the week as well. Nearby Chicago wheat futures finished up 25 ¾ cents, KC closed up 31 ¾ and Minneapolis spring wheat futures finished 27 ½ higher. Corn finished up 3 cents. Soybeans were the laggard closing down 16 ¾ cents for the week. Informa Economics’ 2015 acreage estimates were big for soybeans at 88.78 million acres which makes us wonder how much further downside risk there could potentially be in the beans. Think very carefully before initiating a new long position.
Yesterday’s export sales report was a non event; 476,300 MT for wheat, 693,500 MT corn and 696,000 MT of soybeans. I wouldn’t characterize these numbers as bullish or bearish. If this week’s rally is demand driven then this is one of those times where the trade is focused on uncertainty. As the grizzled veteran traders say, fear before fact.
We have heard rumors that the Russians are actually preventing loaded vessels from sailing, citing phytosanitary restrictions. Obviously this is a ruse meant to restrict grain exports in general. Still, they are protecting some of their major customers including Egypt. Remember the last time the Russians tried to halt exports? The Egyptians stiff armed them; don’t expect them to allow it this time either. Elsewhere in the global trade, Bangladesh tendered for 50,000 MT of optional origin wheat for Feb/Mar. Algeria tendered for 50,000 MT of optional origin wheat for Mar/Apr. South Korea bought 120,000 mt option origin Corn for April. South Korea bought 60,000 mt US or SA Corn for April. The Korea Feed Association (KFA) purchased 60,000 tonnes of corn which can be sourced optionally from the United States or South America in a tender which closed on Friday.
Expect trade to be relatively quiet, low volume for the balance of the calendar year.
Happy trading!
Disclaimer: Commodity trading involves substantial risk and may not be suitable for everyone. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email and basic data from which they are derived are believed to be reliable, but cannot be guaranteed due to uncertainty about future events and complexities surrounding commodity markets. Those acting on the information are responsible for their own actions.
